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and understand the political environment. "They know the right people, that's why you need them. That's what makes them dangerous. How are they getting you that meeting with a minister?" Rooney says "getting out there and training your people, including your agents, is where the real smart money is." It means making sure your contracts and policies with agents make it clear your company does not condone bribes. Pettie says her firm has a supplier code of conduct for vendors and agents that sets out "what they are expected to do," and there are standard clauses in contracts that require them to comply with anti-corruption laws. She also receives regular reports about things like political donations. If an agent or vendor is making a big payment on behalf of the company, "you need to make sure you know what the money is going to be spent on." Pettie encourages general counsel to build "due diligence defences that will protect your company" if it is charged, which includes proper monitoring, audits, and the ability to track who has been trained. A recent U.S. case involving a Morgan Stanley employee charged under the U.S. FCPA with conspiring to evade the company's internal accounting controls in order to enrich himself and a Chinese public official stresses the importance of a proper compliance program. The Department of Justice declined to charge Morgan Stanley, which voluntarily disclosed the incident upon learning about it. The firm was able to show that it regularly updated its anti-corruption policies, had trained the employee seven times and reminded him 35 times about FCPA, and had regular monitoring and auditing. McCain's Wessel warns, "It doesn't matter how tight your compliance is, a rogue employee who wants to participate in corruption will find a way. The key is for you to find out about it and stop it." Lawyers say anti-corruption compliance programs are necessary not only to avoid charges, but because the lack of one could impact future business deals. Anticorruption audits are becoming standard fare in the due diligence process during mergers and acquisitions Keefe says successor liability for the past transgressions means suitors want to know a company is complying with anti-corruption laws. Lack of a program will hold up deals or even prevent a bank from financing an acquisition. "One of these little time bombs inside your organization" can kill a deal, he says. Even with proper programs in place lawyers still worry. Wessel says "what keeps me awake at night is always questioning whether we are responding appropriately to concerns that have been raised. Corporations have many ways that things get flagged or are drawn to management's attention. It's rarely black and white. Initial information is always limited. So you have to make a decision what you do with that information. You have to ask, have we assessed the risk appropriately?" Lendon adds, "What keeps me awake is making sure that people understand what corruption is. It's not simple. In a lot of situations that come up, it is not immediately evident that it could be an offensive situation. It is sometimes hard to recognize and that's why training is important." IH When it really matters. Appeals Opinions and Risk Management Mergers & Acquisitions Claims against Professionals and Fiduciaries Directors' and Officers' Duties and Liabilities Class Actions Toronto: 416 867 3076 London: 519 672 4510 w w w. c a n a d i a n law y er m a g . c o m / i n h o u s E ntitled-3 1 www.lerners.ca october 2013 • 31 13-08-27 2:37 PM

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