“We Want to Learn How to Launder Money”

Depressed attorneys
Depressed and Worried Attorneys

While delivering a workshop on anticorruption and anti-money laundering in SE Asia, the private sector attorneys in the audience grow increasingly quiet, and visibly nervous.  These attorneys represent the “third parties” that cause Foreign Corrupt Practices Act (“FCPA”) difficulties for U.S. and other companies.

As the topic turns to facilitation payments, the Tyco International FCPA case and multi-jurisdictional law enforcement all interaction with the participants grinds to a halt.  I am looking at the faces of troubled attorneys.

I end off the workshop for the day after several attempts to re-engage the group.  Clearly, they aren’t quite ready to discuss their troubles in this open setting.

“What’s on your mind?” I later ask a small group of them huddled over coffee in the lobby of the hotel.

“We want to talk more about how to launder money.  How is it really done?”

A cynic might assume these lawyers want to advise their clients on how to launder money without being caught.  But these attorneys have all been resistance fighters and part of efforts to liberate their country.

As part of fund raising for liberation efforts, they have been practicing law in  Macau, Singapore, Indonesia, Brazil and many other countries on behalf of their clients.  They understand something about international money movement.  But the fight for liberation is finished and now those mechanisms, which were “justified in the name of liberation,” are considered criminal under the new legal regime.

We spend the next hour discussing various money-laundering schemes they know or suspect that their clients have been engaged upon and how easy they are to detect.

More importantly, we discuss strategies to steer clients away from those activities, and the new justification – “this is pay back for our efforts during the fight for freedom.”

“This is a problem for us.  All of these things we did while fighting for our freedom – all of those things we did to protect each other and our families – they don’t just go away when we make a new government.   We must obey the law and we must repay the debt of our liberation.  We have two sets of rules.”

The conversation is one of many, similar, conversations I have with people outside the US.  These sorts of circumstances create significant difficulties for US companies during due diligence and internal investigations.  The same life debts that give rise to the contractual “pay back,” are wrapped in shrouds of secrecy that can make them very difficult to detect.

It’s something to consider when undertaking an  internal investigation for FCPA compliance.

Brian Pinkowski

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2 Replies to ““We Want to Learn How to Launder Money””

  1. This should be Lesson Learned when doing any kind of development work overseas. Particularly in countries that are in the transitioning period. From the Iraqi experience we’ve learned that achieving security and building capacity of a government is not enough. There should be constant and extended monitoring and evaluation that goes beyond the program phase. As stated by one of the locals in this article:“This is a problem for us. All of these things we did while fighting for our freedom – all of those things we did to protect each other and our families – they don’t just go away when we make a new government.”

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