A Recipe for Corruption

The Anti-Corruption Report
Published on:
June 18, 2020
As part of a Columbia University Center for the Advancement of Public Integrity panel last week, Kaplan Hecker & Fink LLP partner Marshall Miller discussed how the diverse impacts of the COVID-19 pandemic create "a recipe for enhanced corruption risk."
The Anti-Corruption Report published this write-up.

A Recipe for Corruption

Relatively immature controls associated with the distribution of funds from some of the federal stimulus programs, individuals who feel a lot of pressure to bring business into their companies in a difficult economy, and employees feeling alienated from their organizations and compliance functions in the remote environment are “a recipe for enhanced corruption risk,” Marshall Miller, a partner at Kaplan Hecker and a DOJ and EDNY alum, said at a recent Center for the Advancement of Public Integrity (CAPI) event.

As we have detailed in our continuing coverage of compliance during the pandemic, the elements of the “fraud triangle” are present, and specific corruption risks, such as those posed by third parties, disrupted supply chains and charitable donations, are especially heightened now. At the CAPI event, Kara Brockmeyer, a partner at Debevoise and former head of the SEC FCPA Unit, noted that whistleblower complaints are rising, and companies need to triage and process them in a way that protects reporting employees.

Miller and Brockmeyer emphasized the importance of assessing risks and, if necessary, engaging in backward-looking compliance efforts to compensate for any pandemic-related compliance lapses that may need to be explained to regulators later. Documenting and adapting efforts remain key for compliance departments – as Brockmeyer pointed out, sometimes government officials can have short memories.

Brockmeyer said she is not seeing a slowdown in the pace of investigations, even with government officials conducting interviews remotely. What has your pandemic enforcement and compliance experience been like? Do you expect a surge in enforcement actions related to pandemic-era corruption as courts re-open and in-person activities resume?

Read a write-up of the discussion from The Anti-Corruption Report here.

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