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Other Possible Safeguards

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Part of the Contributions to Finance and Accounting book series (CFA)

Abstract

There are a number of other factors that can result in a project not being deliberately mis-managed or becoming a victim of fraud or corruption. They are as follows:

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Notes

  1. 1.

    See FCPA blog article dated April 17, 2019: Management Can Own Honesty or Deceit. So Pick One by Richard Bistrong. Also FCPA blog article dated February 27, 2009: Pride’s Disclosure Tells the Story by Richard Cassin.

  2. 2.

    www.open-contracting.org.

  3. 3.

    www.reuters.com/article/amp/idUSKCN1RA1X7 and www.justice.gov/opa/pr/fresenius-medical-care-agrees-pay-231-million-criminal-penalties-and-disgorgement-resolve.

  4. 4.

    See FCPA blog article: At Fresenius, management owned the graft By Richard L. Cassin, dated April 4, 2019 and www.justice.gov/opa/pr/fresenius-medical-care-agrees-pay-231-million-criminal-penalties-and-disgorgement-resolve.

  5. 5.

    See the following report from BBC news (www.bbc.com):

    Panama Papers: Germany ‘pays millions’ for leaked data, 5 July 2017: Germany has paid millions of euros for the so-called Panama Papers revealing offshore tax evasion, reports say. The Federal Crime Office (BKA) said it would put the multi-million-file inventory into electronic form to allow for detailed evaluation. It did not confirm the sum, but government sources told German media 5 m euros (£4.4m; $5.7m) had been paid. The documents leaked last year exposed rich and powerful people, who had used tax havens to hide their wealth. The leaks put heads of state, businessmen and celebrities under pressure, with some resigning over the revelations… .

  6. 6.

    See the following reports from BBC news:

    Nawaz Sharif: Ex-PM leaves Pakistan for medical treatment, 19 November 2019: … Sharif was prime minister from 1990 to 1993, then again from 1997 to 1999, and finally from 2013 to 2017. He is also one of the country's richest industrialists. In 2018 - following the Panama Papers leak - he was found guilty of corruption, relating to his family's ownership of upmarket London apartments. He was given a 10-year prison sentence, but was released 2 months later when the court suspended the sentences, pending a final judgement. But in December 2018 he was jailed for corruption again, this time for seven years, in relation to his family’s ownership of steel mills in Saudi Arabia. He denies wrongdoing and accuses the military of conspiring to end his political career; and,

    Panama Papers: Voices from Iceland as PM resigns 5 April 2016: Sigmundur Gunnlaugsson has resigned as prime minister of Iceland after leaks from Panama law firm Mossack Fonseca showed he owned an offshore company with his wife. Mr Gunnlaugsson, his wife and other Icelandic ministers were named in the Panama Papers. He had said no rules had been broken but was accused of concealing millions of dollars worth of family assets.

  7. 7.

    Indeed, there are a number of reports/articles on these and related issues, including the following FCPA Blog articles: (1) Shruti Shah on the Panama Papers: A year of gains for transparency, but gaps remain, Shruti Shah on April 12, 2017; (2) Mossack Fonseca arrests reignite Panama Papers scandal, Martin Kenney on March 7, 2017; (3) Panama Papers: RBS, NatWest disclose FCA inquiry, Richard L. Cassin on May 10, 2016; (4) Shruti Shah on the U.S. response to the Panama Papers: A step in the right direction but more action is needed, Shruti Shah on May 9, 2016; (5) Shruti Shah: The Panama Papers and the United States, Shruti Shah April 15, 2016; (6) Bill Waite on the Panama Papers: It’s time for some crisis management, Bill Waite on April 14, 2016.

  8. 8.

    There was a further disclosure recently, as noted in the FCPA Blog article: Five takeaways from the Luanda Leaks by Alison Taylor on January 28, 2020 where she noted: ‘... Last week brought the latest revelatory data dump: The Luanda Leaks have provided damaging new insight into business dealings and corporate relationships of Isobel dos Santos, the daughter of Angola’s former president…’

  9. 9.

    The 2017 movie about Madoff, called The Wizard of Lies, reflects these deceptions. It is included in the list of films at Appendix A.

  10. 10.

    https://conantleadership.com/conantleadershipflywheel/.

  11. 11.

    https://conantleadership.com/conantleadershipflywheel/.

  12. 12.

    See their website: www.trustacrossamerica.com.

  13. 13.

    www.trustacrossamericas.com/tap-into-trust.shtml. Their motto is: Trust starts with trustworthy leadership. It must be built into the culture.

  14. 14.

    https://ec.europa.eu/cefdigital/wiki/display/CEFDIGITAL/2018/09/11/Publication+of+Trust+Models+Guidance%3A+learn+what%27s+the+best+option+for+your+project.

  15. 15.

    As discussed above pp. 86–87; www.reuters.com/article/amp/idUSKCN1RA1X7 and www.justice.gov/opa/pr/fresenius-medical-care-agrees-pay-231-million-criminal-penalties-and-disgorgement-resolve.

  16. 16.

    FCPA blog article: Management can own honesty or deceit. So pick one, by Richard Bistrong, dated April 17, 2019.

  17. 17.

    ‘A look at regaining the public’s trust, once it's lost’ by Sascha Maturszak, Ethikos newsletter dated 22/10/2019. She notes that ‘Several examples of both options can be seen in recent corporate history. For instance, Swedish company Telia Co, AB is working hard to change its culture. On the other side, the repeated ethical problems surrounding consumer privacy at Facebook, despite a consent decree with the United States government and multiple public breaches, shows how a company with enough clout – and hubris – can attempt to overcome unethical behavior without truly changing anything about its business model’.

  18. 18.

    http://siteresources.worldbank.org/INTDOII/Resources/DIR.pdf.

  19. 19.

    https://www.eib.org/attachments/general/combatting_fraud_and_corruption_en.pdf.

  20. 20.

    https://docs.wfp.org/api/documents/WFP-0000038444/download/.

  21. 21.

    www.adb.org/site/integrity/reports-project-procurement-related-review.

  22. 22.

    See the descriptions of the various systems used by the MDBs including World Bank: www.worldbank.org/en/about/unit/sanctions-system; EIB: www.eib.org/en/about/accountability/anti-fraud/exclusion/index.htm; and EBRD: www.ebrd.com/ineligible-entities.html.

  23. 23.

    More details at: www.ft.com.

  24. 24.

    https://edition.cnn.com/2018/10/10/uk/uk-wealth-order-hajiyeva-intl/index.html. www.gov.uk/government/publications/circular-0032018-criminal-finances-act-unexplained-wealth-orders/circular-0032018-unexplained-wealth-orders.

  25. 25.

    https://edition.cnn.com/2018/10/10/uk/uk-wealth-order-hajiyeva-intl/index.html.

  26. 26.

    www.telegraph.co.uk/news/2019/12/12/mcmafia-orders-designed-used-against-sainsburys-rbs-heads-court/amp/.

  27. 27.

    As was discussed in the document entitled Mutual Legal Assistance in Asia and the Pacific - Experiences in 31 Jurisdictions at: www.oecd.org/corruption/ADB-OECD-Mutual-Legal-Assistance-Corruption-2017.pdf.

  28. 28.

    https://www.cps.gov.uk/publication/code-crown-prosecutors.

  29. 29.

    www.sfo.gov.uk.

  30. 30.

    www.nationalcrimeagency.gov.uk.

  31. 31.

    www.cityoflondon.police.uk.

  32. 32.

    www.legislation.gov.uk/ukpga/2010/23/contents.

  33. 33.

    www.natlawreview.com/article/house-lords-bribery-act-2010-committee-publishes-post-legislative-scrutiny.

  34. 34.

    www.sfo.gov.uk.

  35. 35.

    https://www.cps.gov.uk/publication/code-crown-prosecutors.

  36. 36.

    www.ft.com/content/553fdc32-5639-11e9-91f9-b6515a54c5b1.

  37. 37.

    www.sfo.gov.uk/publications/guidance-policy-and-protocols/corporate-self-reporting/.

  38. 38.

    Subsequently DPAs were agreed with Sarclad Ltd in 2016 and significantly with Rolls-Royce and Tesco in 2017. In 2019, a DPA was agreed with Serco Geografix Ltd.

  39. 39.

    www.sfo.gov.uk/2019/02/22/sfo-closes-glaxosmithkline-investigation-and-investigation-into-rolls-royce-individuals/.

  40. 40.

    In an article entitled: Guilty Pleas in the United States arising from investigations into Rolls-Royce’s former Energy Division dated 8 November 2017 at: www.sfo.gov.uk/2017/11/08/guilty-pleas-united-states-arising-investigations-rolls-royces-former-energy-division/.

  41. 41.

    On November 7, 2017, a US DoJ statement entitled: Five Individuals Charged in Foreign Bribery Scheme Involving Rolls-Royce Plc and Its US Subsidiary was published on their website at: www.justice.gov/opa/pr/five-individuals-charged-foreign-bribery-scheme-involving-rolls-royce-plc-and-its-us.

  42. 42.

    www.bbc.com/news/amp/business-46468228.

  43. 43.

    Report dated 23/01/2019 in the Financial Times, www.ft.com/content/b6c2b688-1f29-11e9-b126-46fc3ad87c65.

  44. 44.

    www.sfo.gov.uk/2019/02/22/sfo-closes-glaxosmithkline-investigation-and-investigation-into-rolls-royce-individuals/.

  45. 45.

    www.wsj.com/amp/articles/u-k-closes-corruption-probes-of-glaxosmithkline-rolls-royce-individuals-11550872708.

  46. 46.

    See also FCPA Blog article: China fines GSK $490 million for bribery by Richard Cassin on September 19, 2014.

  47. 47.

    https://www.sfo.gov.uk/cases/guralp-systems-.

  48. 48.

    https://www.sfo.gov.uk/2019/12/20/three-individuals-acquitted-as-sfo-confirms-dpa-with-guralp-systems-ltd/.

  49. 49.

    See also FCPA Blog article: ‘Guralp receives UK DPA, individuals acquitted’ by Susan Hawley, dated December 23, 2019 who noted that: ‘This is the third DPA in the UK where individuals charged with the wrongdoing that formed the basis of the DPA have been acquitted by a court. The SFO is absolutely right to pursue individual prosecutions where it has entered into a DPA. However, this latest set of acquittals will raise serious questions for the SFO about whether its prosecutorial strategy is working and once again, about how effective the UK’s Deferred Prosecution Agreement regime is’.

  50. 50.

    www.interpol.int/en/Crimes/Financial-crime.

  51. 51.

    www.interpol.int/en/Crimes/Financial-crime/Our-role-in-fighting-financial-crime.

  52. 52.

    FCPA blog: Former Interpol chief admits taking $2 million in bribes By Richard L. Cassin, dated June 20, 2019.

  53. 53.

    www.europarl.europa.eu.

  54. 54.

    www.ec.europa.eu.

  55. 55.

    www.ec.europa.eu/anti-fraud/home.

  56. 56.

    https://ec.europa.eu/anti-fraud/policy/preventing-fraud_en.

  57. 57.

    www.iaca.int.

  58. 58.

    www.baselgovernance.org.

  59. 59.

    www.baselgovernance.org/asset-recovery/free-elearning-courses.

  60. 60.

    www.baselgovernance.org/asset-recovery/basel-aml-index.

  61. 61.

    Such as the one posted on the FCPA Blog: Second Mastercard-produced training video now Available to Everyone by Richard Bistrong on November 4, 2019 which notes: ‘Mastercard has followed the success of its first compliance training video with a second release, this time about the perils of getting too close and comfortable with third-party suppliers, agents, and other intermediaries. “From Beach House to Blackmail: How Silence Isn’t Golden” is real-life compliance training. It depicts actual events leading up to my own FCPA violations, eventual guilty plea, and sentencing to fourteen and a half months in federal prison...The first Mastercard-produced compliance training video, “Behind the Bribe,” won numerous industry awards and has been hugely effective. Multinationals around the world have integrated “Behind the Bribe” into their online training libraries as part of their compliance training and awareness programs’.

  62. 62.

    FCPA Blog article: ‘Takeaways from the Anti-Corruption Chapter of the USMCA’ by Collmann Griffin, Richard Mojica and Marc Alain Bohn, dated January 9, 2019.

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Smith, D. (2021). Other Possible Safeguards. In: Promoting Integrity in the Work of International Organisations . Contributions to Finance and Accounting. Springer, Cham. https://doi.org/10.1007/978-3-030-73916-4_9

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