Need to Stop Bribes? Meet the Mr. Fixits

Originally published in The Wall Street Journal on May 31, 2010
By: Paul Beckett
You are the chief executive of a large U.S. corporation. A few years ago, you heard on the golf course that India was “the next China.” Your M&A folks have found a good acquisition target and you are excited about the prospect of owning a company in a major new market when sales at home have gone down the can.
Then you get this report during due diligence: Our Indian friends have been paying bribes to local officials to the tune of $750,000 a year. If we buy this company and this carries on, you could go to jail under the Foreign Corrupt Practices Act, a U.S. law – strictly enforced by the Justice Department – that makes it a criminal offense to pay bribes abroad.
Oops.
Your next call is likely to be to someone like Ken Springer or Ashish Sonal. Mr. Springer, based in New York, is a former FBI agent and founder and chief executive of Corporate Resolutions Inc. Mr. Sonal, based in Gurgaon, is the founder and chief executive of Orkash Services Pvt. Ltd. (Orkash means “nothing is impossible” in Sanskrit, he notes.)
Both are corporate intelligence experts and part of their job is to be the Mr. Fixits in situations like this. In short, it is their job to tell the bribe recipient that the gusher of cash is being turned off.
The key, says Mr. Sonal, is to “understand the personalities and access what needs to change and how they need to be convinced.” In the case of government officials, he would carry the message – and help management carry the message – that the bribery has to cease. He also helps companies craft internal and external communications to “show a line is being drawn.”
“We minimize the risk of confrontation, clash of ego, anything like that,” Mr. Sonal says. “The market knows foreign companies have to comply with this kind of thing and the people who have received bribes come to realize this can’t happen any longer.”
The two companies sometimes work in partnership and have done this work in India five times in the last year and a half, Mr. Springer says. Orkash has done a total of about two dozen in the past 18 to 20 months, Mr. Sonal says.
As more U.S. companies look to do business in India because of its strong economy and because of the economic problems in the U.S., helping U.S. companies comply with the FCPA is a growth industry.
“What we are doing is coming in after the fact to clean it up,” says Mr. Springer in a telephone interview from his Manhattan office. “What U.S. companies are doing is realizing that they need to have better policies in place when they buy companies.”