PLI: How can cultural differences outside the United States affect the
conduct of internal investigations under the Foreign Corrupt Practices
PATRICK M. NORTON: When conducting investigations in foreign countries, it is important to bear in mind that local employees may have different cultural attitudes towards allegations of corruption and the related investigation. In many countries, simply insinuating that someone has been involved in corrupt activities is perceived as a serious insult to his or her integrity and character. Most employees in foreign offices, moreover, will typically find adversarial questioning by U.S. lawyers unfamiliar and intimidating, and their natural instinct may be to be as unresponsive and non-committal as possible, even when they themselves are innocent of wrong-doing.
Particular challenges may arise when the allegations involve foreign
nationals who head the company's local offices. Such individuals can be
expected to be particularly sensitive to any suggestion to their
employees that they are suspected by the home office of personal
involvement in improper activities. If the allegations turn out to be
unfounded, the local managers' prestige and authority can nevertheless
be seriously damaged by the investigative process. Effective local
managers may also be important to a company's business in a country,
and this kind of damage to the authority of the managers, based solely
on unfounded allegations, may seriously injure the company's commercial
interests as well.
At the same time, it is always possible that any allegations concerning the local managers are well founded, and counsel will, in any event, be obligated to pursue evidentiary leads. This can pose significant practical problems for the investigation. The cooperation of local managers may be integral to the success of the investigation as they typically have the greatest access to information and may be best positioned to ensure the cooperation of their staff. Indeed, if the local managers are uncooperative, it may be extremely difficult to conduct an effective investigation at all.
Investigators must take these factors into account in approaching local offices to gather documents and interview witnesses. Before initiating local interviews, counsel should therefore seek the help of the company's management and human resources personnel in laying the groundwork for the interviews. Given the nature of the process and the inevitable cultural gaps, this may not be a simple task.
The conduct of interviews in other jurisdictions also poses particular challenges. Language is an obvious barrier. Even employees fluent in English may understandably wish to use their own language when being questioned about potentially criminal matters. Conversely, only fully bilingual counsel will wish to take interviews in the local language without at least the assistance of a local translator. Behavior in interviews also varies considerably among cultures, and it will generally be advisable to have local counsel involved in important interviews to be certain that the "real" responses are fully understood.
Where it is especially difficult to obtain participation from local employees, counsel may want to consider establishing a corporate amnesty program as Siemens reportedly did to encourage employees with pertinent information to come forward. It is reported that Siemens' policy of corporate amnesty was instrumental in obtaining the cooperation of employees who had useful information but were afraid to come forward because they themselves had been involved in improper payments at the orders of their superiors. Siemens told its employees that, while it could not guarantee amnesty from local law enforcement, it would make known to enforcement authorities the cooperation of employees who came forward with information within a certain period of time, and apparently this was persuasive enough to convince many who were initially reticent to participate.
Conduct that violates the FCPA will almost invariably violate local anti-corruption laws as well. Local counsel will need to advise on the applicability of the local anti-corruption and anti-money-laundering laws, as well as local laws and regulations on facilitating payments. As other countries become more aggressive in enforcing their own laws, a company may need to consider carefully whether local disclosure is necessary or advisable and, if so, what impact such disclosure may have on any U.S. investigation.
Counsel also need to bear in mind the "blow-back" effect of a U.S. investigation. Any FCPA matter that is brought to the attention of U.S. authorities may be resolved by U.S. court proceedings that will be prominently reported first in the United States, then in the international, press. Local law enforcement authorities may be displeased to learn for the first time of apparent violations of their laws in their territory from foreign press reports.
Local law may also affect whether and how witnesses may be interviewed, what documents may be removed from the country, and local disclosure issues. Local laws may also affect the rights and remedies of those under investigation, particularly in the employment context.
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