The past 30 days have brought interesting changes to the world of anti-corruption enforcement. Of course in the United States there was the Yates Memo, directing prosecutors to seek to indict more individuals in white-collar crimes such as the Foreign Corrupt Practices Act. At the end of the day, however, two developments in Europe may stand out further in the ongoing fight against bribery and corruption than even the Justice Department’s newly found focus on individuals and senior executives.
In the Volkswagen emissions testing scandal, the New York Times reported Monday that German prosecutors have opened a criminal investigation into the former head of VW, Martin Winterkorn. The investigation into the former CEO “is based on complaints from unidentified people asserting that Mr. Winterkorn should be held responsible for a widening scandal linked to diesel emissions.” It was also reported that VW had installed the now-infamous “defeat devices” in more than 2 million Audi cars sold in Europe, in addition to those previously noted to be sold in the United States.
Perhaps even more intriguing than the actions of the German prosecutors was that of the Swiss prosecutors last week, who raided the offices of FIFA to search for evidence around a criminal investigation of the (still) current FIFA President Sepp Blatter. This is one of the few times that the Swiss authorities have investigated the head of an organization headquartered in Switzerland and who is a Swiss citizen, around allegations of bribery and corruption.
If the Swiss authorities begin to participate in the international fight against bribery and corruption at the CEO or president level, that really is a change. It could mean that the international fight against bribery and corruption has taken on a new urgency. The Yates Memo will not only affect how prosecutors handle FCPA cases going forward; it puts pressure on corporate internal investigators to identify senior executives quickly who may have been part of a bribery scheme. The VW emissions testing scandal may take fraud on the public investigations to a new level in the C-Suite.
I think senior executives may want to call in their chief compliance officers and ask, “How are we doing?” sooner rather than later.