Thomas Fox and Michael DeBernardis go in-depth about the bribery scandals of three big names in telecom, MTS, VimpelCom, and Telia; Ericsson’s shady deals in multiple countries, how knowing high-risk countries and the beneficiaries of companies can save you from trouble, and the importance of visibility for compliance professionals.
▶️ The Bribery Trilogy in Telecom with Thomas Fox and Michael DeBernardis
Key points discussed in the episode:
✔️ Thomas Fox gives a brief background on the VimpelCom case and points out how the company, including MTS and Telia, were all tied up with the schemes of Gulnara Karimova, the daughter of a former president in Uzbekistan.
✔️ The DOJ and the SEC are confident in tackling companies taking advantage of “shell companies” and getting involved with corrupt government officials. There was malicious intent on the companies’ sides regardless of the rank of the person involved.
✔️ Thomas Fox describes the Telia case. Michael DeBernardis points out that the difference between the outcomes of Telia, MTS, and VimpelCom’s cases was the penalties. Cooperation from Telia and Vimpelcom garnered significant reductions.
✔️ Thomas Fox lays out the MTS case. Even when violations were found in Kolorit’s purchase, MTS higher-ups presented excuses that the compliance team failed to argue. The control environment for transparency has since improved post-prosecution.
✔️ Michael DeBernardis emphasizes the risk behind unidentified beneficial owners. VimpelCom, Telia, and MTS had full knowledge of their schemes. But the story is a lot more muddied and complex to the ears of the board and compliance professionals.
✔️ Thomas Fox retells the Ericsson case, illustrating it as not just a corrupt third-party, paid-for entertainment, or donations. The depths where companies explore in weaving the most intricate schemes are only limited by the imagination. Michael DeBernardis attributes this to enterprise-wide failure.
✔️ Knowing the high-risk countries can save your company from trouble. Once you start paying bribes, you’re stuck. The receiving party already has their claws on you and will threaten to report to US authorities if you attempt to exit. Michael DeBernardis adds that despite these cases being beyond US soil, companies won’t be able to challenge it.
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the corruption files