What Executives Can Learn From Eric Adams’ Bribery-Related Indictment

The federal indictment of New York Mayor Eric Adams on bribery-related charges triggered reminders about allegations of bribery that have been made against business leaders and organizations in the corporate world.

The headline-making indictment of the first term mayor may also have raised questions for executives how to respond if their organizations are ever confronted with bribery charges against—whether against employees or the entire company—and the steps to take to help prevent that from happening

Corporate Examples

“Bribery is a particularly dangerous charge, as the underlying facts may trigger not only criminal and civil liability, but for companies engaged in business overseas, the Foreign Corrupt Practices Act may come into play if bribes were paid to even low-level foreign government officials “Colin Ram, a civil litigation attorney, warned via email.

Walmart

In 2019, Walmart “agreed to pay $282 million to settle a seven-year bribery investigation by the US government concerning certain payments that were made to foreign officials in places like Mexico and China,” Forbes reported at the time.

Microsoft

In 2019, a wholly-owned subsidiary of Microsoft Corporation based in Hungary agreed to pay a criminal penalty of more than $8.7 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bid rigging and bribery scheme in connection with the sale of Microsoft software licenses to Hungarian government agencies,” the Justice Department announced on its website.

Rolls-Royce

In 2017, Rolls-Royce plc, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors, “agreed to pay the US nearly $170 million as part of an $800 million global resolution to investigations by the department, UK and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts,” according to a press release that was posted on the Justice Department’s website

How To Respond To Bribery Allegations

There are steps that companies can take when they become aware allegation of bribery within their organizations and about their executives.

Move Quickly

“When allegations of bribery arise, transparency and swift action are essential. Companies should immediately acknowledge the issue, initiate an independent investigation, and keep stakeholders informed throughout the process. Handling it (in) this way limits speculation, protects the company’s reputation, and demonstrates a commitment to integrity,” Adrienne Uthe, founder and strategic advisor at Kronus Communications, a public relations firm, recommended via email.

“The first few hours and days after the bribery allegations come to light are critical—companies want to avoid making haphazard comments to the public because what they say in the early days may not only prove to be inaccurate but can be used against them later. Company employees should be cautioned against feeding the rumor mill at work. An off-the-cuff remark about the bribery charges made in a private text message can create headaches for the sender down the line,” Ram, the civil ligation attorney, recommended.

Next Steps

“Investigate the allegations thoroughly and objectively. Hire outside counsel if necessary. Get to the bottom of what happened before making public statements,” attorney Judd Grenier advised.

“Disclose issues transparently while the investigation is ongoing. Express commitment to compliance and ethical conduct. Outline corrective actions, like placing executives on leave. This reassures stakeholders the company takes governance seriously,” he noted.

• “Take definitive action based on findings. If executives are cleared, reinstate them. If found guilty, terminate them immediately and cooperate fully with authorities. The company must show illegal behavior is not tolerated.”
• “Work to repair reputation damage. Issue a sincere public apology acknowledging mistakes. Highlight strengthened controls and ethical policies to rebuild trust. It takes time, but companies can recover by demonstrating real change.”

Transparency

As soon as an allegation surfaces, companies must launch an independent, thorough investigation led by a neutral third party to demonstrate a commitment to accountability and allow leadership to assess the scope of the issue before making public statements,”Amanda Orr, a public relations expert at Orr Strategy Group, advised via an email message.

“Investigate the allegations thoroughly and objectively. Hire outside counsel if necessary. Get to the bottom of what happened before making public statements,” David Grenier, a corporate law and governance attorney, advised in an email interview.

Communication

“In the court of public opinion, silence can be the right move, but in allegations of bribery, it can be perceived as guilt. Companies should communicate with stakeholders promptly, acknowledging the allegation and outlining the steps they are taking to address it. The key is to express responsibility without prematurely admitting fault,” Orr advised.

Prevention

“Demonstrating that the company is taking steps to prevent future issues is essential. This could include enhancing compliance programs, retraining staff, and working with regulators to rebuild trust. Following bribery allegations, Rolls-Royce implemented extensive internal changes, including stronger anti-corruption policies, which helped restore its credibility,” Orr concluded.

Some companies have strict bribery-related policies which other organizations could consider emulating.

Microsoft

“We prohibit corrupt payments of all kinds, including facilitating payments. “We expect our representatives to share our commitment to integrity, and if we see signs that a representative is unethical or could be engaging in corrupt conduct, we prohibit doing business with them,” Microsoft says in a statement on its website.

Rolls-Royce

On its website, Rolls-Royce said that its policy is to:

• “Do not give or receive bribes, and will report to the Ethics and Compliance team if we are asked for, or offered, bribes or facilitation payments;
• “Only offer, or accept, gifts or hospitality allowed within policy; and
• “Consult our Ethics and Compliance team about any business partners that we engage with to make sure that we are conducting the appropriate due diligence on the partner.”

Walmart

According to the retailer giant’s website, “We compete fairly and honestly everywhere we do business around the world. “We never attempt to gain a business advantage through bribery, and we do not tolerate bribery or corruption in any form.”

Of course, having anti-bribery policies is no guarantee that corporate executives will not offer or accept bribes.

But that would be a good first step in the right direction.