Richard Bistrong (Front-Line Anti-Bribery) : “Corruption harms societies, human rights, economic development and social welfare”

Richard Bistrong was targeted in 2007 for having paid bribes to foreign public officials. After five years collaborating with US and UK authorities in assisting them in understanding how FCPA and other bribery and export violations occurred in international sales, he went to prison for fourteen months, returning home in December 2013. He now travels the world to share his experience and knowledge and to promote anticorruption compliance.

Richard Bistrong was targeted in 2007 for having paid bribes to foreign public officials. After five years collaborating with US and UK authorities in assisting them in understanding how FCPA and other bribery and export violations occurred in international sales, he went to prison for fourteen months, returning home in December 2013. He now travels the world to share his experience and knowledge and to promote anticorruption compliance.


Leaders League. What are some of the anti-corruption and compliance trends?

Richard Bistrong. If you look at how many compliance programs were formed, they came from the legal department with a focus on criminal conduct and protecting the multinational. Companies wanted to be ready to demonstrate to the regulator that they have a good program and maybe negotiate a lower fine or a lower penalty. Today the focus is now evolving into more about how you build a program that inspires the workforce, and that is a partner to commercial success. People behave in certain ways, and we all harbor rationalizations and assumptions in our work about “what the company wants”. So today, we see much more of a discussion, including my own work, on how to inspire individuals to have their own ethical awareness to do the right thing. I see a trend towards helping people to realize that anticorruption is not just a set of rules and policies, but that corruption harms societies, human rights, economic development, and social welfare etc. For example, it results in defense products getting into the wrong hands, or patients getting the wrong medications.

 

Do company leaders take corruption more seriously nowadays than ten years ago?

Anticorruption compliance is the responsibility of the business leaders and business leadership, the people who are talking to the workforce every day, to drive home the messages of ethics and integrity. You may have commercial objectives and incentives and want to achieve them. But sometimes, those objectives might appear to conflict with the rules in certain part of the world. Now, we are starting to see a workplace where business leadership is more involved in communicating the importance of compliance, ethics and integrity with the workforce. If they do that in a way which is open to conflict, where there is tension between objectives and compliance, then people can talk about it together and not take those decisions into our own hands. I used to think of success and compliance as a zero-sum game, and I could not achieve both.  I would ask myself “What does the company really want?” I would ponder, “Does it want anti-bribery compliance or does it want sales?” Why? Because working in some of these high risk and low integrity regions, I did not think I could conduct both. Now, unfortunately for me, I did not share my decisions with anyone and acted on them myself.

 

“We are starting to see a workplace where business leadership is more involved in communicating the importance of compliance, ethics and integrity with the workforce”

What were you thinking about when you first confronted corruption?

To start with, when you talk about corruption, you never use the word “bribes.” You say: “paying tolls,” “making someone happy” or “taking care of someone.” I certainly thought that if I did not do it, someone else would.  When I would meet my competitors or peers, maybe we would bump into each other at trade symposiums, and tell each other war stories, comparing who’s doing what and where. We exchanged information about “who knew how to get things done.” To me, my objectives and my incentives were very clear: they were financial and measurable. So when I first starting to confront corruption, I starting thinking, this is only a red-flag if I make it one.

 

Did you realize there was a chance you’d get caught?

I was not thinking I was in an earshot of law enforcement and I was not thinking I was near my company’s compliance leaders as these discussions were occurring in remote regions, where I worked unsupervised, and there were no witnesses to these conversations other than me and my business partners.  It’s called “optimism bias,” where you think the chance of you being caught are less than the chances of everyone else getting caught, and the danger is that the longer you’re not caught, the longer you think you will never get caught. I never indexed these issues of risk and criminal deterrence, they were very abstract. In this period of 1997 to 2007, international anticorruption laws were not a big issue, so I did not really have much awareness of them to begin with, but I knew what the law meant before I took my first flight as an international sales executive.

 

Did you think you were harming anyone, were you losing any sleep over what you were doing?

I’m well educated, and was certainly a family man. When engaging in corruption, I was not thinking of the unintended consequences of my conduct, on society, good governance, human rights. The quality of the products was always excellent so I started thinking “who’s getting hurt in this situation?” The company might even have to hire additional employers to manufacture the orders I was generating. I meet my objectives, my quotas, my forecast and the intermediary (business partner) moves on to the next transaction. In many parts of the world, particularly in procurement, public officials are paid by what we might consider as property wages, so they get a little something to make ends meet. To me, I was ethically numb to the consequences of my conduct. I wasn’t thinking about my former employer, society, or my family. To me it looked like a “win-win situation” and those who I thought I was helping, those were the parties to whom I harmed the most.

 

“You think the chance of you being caught are less than the chances of everyone else getting caught”

What prompted you to violate the FCPA?

When I would wake up in the morning, I didn’t think “today I’m going to violate US federal law.” What I was thinking about was executing on my commercial objectives. So what prompted me to violate the law, is what a lot of people think about: success. This is however not an excuse. I was not pressured, but the pressure comes from within. Cheating was a choice and no one forced me to pay a bribe. But I don’t think my thinking was that unique. I therefore ask compliance leaders today if their programs address behavioral risk. When companies set their objectives and their incentives, is that inherent risk taken into account in their planning? Are they evaluating how much risk a country presents to them, and are they taking it into account in their business model, so that they pointing people towards dangerous decision making, especially where commercial objectives might run afoul from reality, and a long term sustainable (and ethical) business model.

 

Do many companies have zero tolerance of corruption?

Yes, but that’s the easy part as that’s easy to say. If you are looking at all the companies that have been charged for violating international anti-corruption law, they all say they have a zero tolerance. A good example is GSK, a pharmaceutical company. They ran into trouble in China and the Middle East. Eventually they realized, as their Chief Medical Officer shared, that they may have to roll their business practices back a little to roll ethics and compliance going forward. They re-engineered their entire system of incentives and compensation practices. Now, their employees are rewarded and incentivized based on the knowledge of the product, on customer satisfaction, on coming up with good healthcare solutions for people. It is not a black and white financial goal. It is more about, as the Chief Compliance Officer of Novartis stated, making sure that individuals get the right medicine at the right place at the right time.  

 

What led you to cooperate with the US and UK authorities?

If you are the target of an investigation by the United States Department of Justice, you have two choices, bearing in mind you are innocent until proven guilty. In the first case, you go to court and the government has the burden to prove its case to a jury. In the second one, you plead guilty. The main reason I pleaded guilty was very emotional for me. It’s hard to describe, but getting caught was the best thing that happened to me. It really got me to think about how I was leading my life and to realize I was no longer the family oriented and values person I once was. I wanted that person back, but knew I had to face the consequences of my actions. I knew I would have to pay the price for what I did and that cooperating with the government could potentially mitigate some of those consequences. I was ready to reveal what happened and come clean. At the time I did that, it was not clear that there would be benefits to my liberty as well in doing that, as there are no guarantees.  But when the judge sentenced me, he said had had I not pleaded guilty and cooperated that he would have given me between eight and eleven years in prison. Instead he sentenced me to eighteen months, of which I served fourteen as a result of good conduct while I was in prison.

 

“There is 100 Million dollars of corrupt transactions occurring daily”

How has corruption changed since you were prosecuted?

I think the supply side of corruption has changed and the awareness of corruption has certainly changed for the better.  But I don’t think the demand side is changing.  The estimate based on World Bank figures is that there is 100 Million dollars of corrupt transactions occurring daily. Places like Africa have real reputation for corruption as an example, and in many places it is still tolerated and not prosecuted. In some regions where it is illegal they still may not even have the resources to combat it.  So the demand is still there. Now we have countries that are changing. For example, Brazil has just recently gone through a huge corruption scandal, so while corruption might still be there, it is now significantly different as there is no more local impunity. But you still don’t see this sort of significant shift, generally speaking, in Africa, in the Middle East or in Central Asia. That’s why the corporate challenge is still there, as multinationals still have the challenge of doing business in these regions in a way that’s ethical and sustainable.

 

You launched your own blog in 2014. Why?

I saw well-educated practitioners giving very good counsel on foreign bribery issues, but I did not see anybody talking about it from the business perspective. That’s why I ended up calling it “Front-Line Anti-Bribery” because it is from a “front-line” perspective. It’s about the “what actually happens” on the front-lines of international business, and it addresses behavioral and third party risk that you don’t find in a code of conduct.

 

What are the current challenges facing global anticorruption efforts?

The challenges are still the same. They are how you inspire a workforce to think about anticorruption as a partner to business success, and how you get the conversation going. People rationalize behaviors all the time in their personal and professional life. So the challenge is how you got people to talk to one another so they unpack those challenges together, as a team, and reduce the chances that these rationalizations lead to dangerous decision making? That way, people don’t think they must make these decisions on their own, and they realize they can talk to their supervisors and share their issues and dilemmas.

 

How can compliance officers help their companies?

They are a few ways. First, help to educate the workforce on intended and unintended victims of corruption. People need to understand that even accepting a small bribe makes them part of a criminal ecosystem. Ask “do you want to think yourself as a criminal?” Probably not. Compliance officers need to inspire teams to see compliance from the ethical perspective, as more than just the rules, policies and procedures. We all want to live up to our ethical standards for ourselves, personally and professionally. How do we do it? Don’t give them a rule book, but talk about it. Corruption in some parts of the world is going to be inevitable, so help people to understand that risk, and how to engage, before they are in the middle of it.

 

Interview by Margaux Savarit-Cornali

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Accenture's CEO and CFO interview by Leaders League Group

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