Some years ago I came across the details of a bank account located in a jurisdiction known for its banking secrecy. The names on the account included an Irishman with an address in a middle-class Irish suburb. The others lived abroad.
I got the Irish man’s number from directory enquiries, and called him. A reader of The Irish Times, he agreed to tell me the story behind the bank account, if I agreed not to write about it. As I had no information other than the banking details, I agreed.
The account was linked to the man’s role with a multinational with operations here that sells its products internationally. The other names on the account were of people who controlled procurement by a government department in a developing country.
If it became known that he had been speaking with the media, there was a real chance that he would be killed
The products were non-military, and their procurement would come under public welfare expenditure (I am not giving the details here because of the commitment I gave the man). The bank account was used to pay kickbacks.
The Irish executive explained to me that he had a good relationship with the people to whom he had organised the corrupt payments, up to and including family visits. However if it became known that he had been speaking with the media, there was a real chance that he would be killed.
Deferred prosecution
More recently, as part of a project to do with medical implants, The Irish Times reported on how the US multinational Johnson & Johnson (J&J) entered into a deferred prosecution agreement with the US authorities in 2011 and paid a $21.4 million fine, arising from bribery in Greece, Poland, Romania and Iraq. (There was no connection between J&J and the man I spoke to about the bank account.)
The bribery included cash payments to Greek surgeons to encourage them to use orthopaedic products produced by the J&J subsidiary DePuy (which has operations in Ireland, as has J&J). Documents published by the US authorities show the bribery operation was discussed by DePuy executives during a conference in Dublin in 2000.
The deferred prosecution agreement was negotiated under the terms of the Foreign Corrupt Practices Act, a law introduced in the US in 1977.
Last year the Oireachtas passed the Criminal Justice (Corruption Offences) Act, which similarly allows for prosecutions here, including against corporates, for acts of bribery in third countries. The new law is linked to a project being run by the Organisation for Economic Co-operation and Development (OECD), the same Paris-based operation that runs the Beps project, which is seeking to reform the way multinationals are taxed. Ireland is a member of the OECD.
The OECD’s Anti-Bribery Convention was adopted more than 20 years ago, so Ireland has not been to the forefront of global efforts to stamp out transnational bribery. Also, Ireland’s version of the law is not in compliance with the convention, as it requires that the bribery be an offence both here and in the third country.
Because of the role, relative to its size, that Ireland plays in the world economy, the drive to suppress global corruption creates a significant challenge for the State. The challenge is similar to that faced by the Data Protection Commissioner, Helen Dixon, who has to ensure that not only are domestic companies in compliance with the data-protection laws, but also that the Irish-based operations of the largest tech companies on the planet are in compliance.
A serious, well-resourced, and internationally connected capacity to investigate and prosecute foreign bribery is required
These Irish tech operations, just like their counterparts in the medical device, pharmaceutical and other sectors, are designed to fit with tax rules that are being driven by, among other factors, the Beps process. Often this leads to the Irish operations being responsible for sales not just across Europe, but also Africa, Asia, the Middle East and even South America. In other words, the Irish operations sell into some of the most corrupt markets in the world.
Globalised phenomenon
Just like multinational sales networks, corruption is a globalised phenomenon. The money associated with corruption flows around the globe, and the misery that to which corruption contributes feeds into migration flows that in turn help drive toxic political forces in the European Union and elsewhere. Transnational corruption is not a distant problem.
The Garda National Economic Crime Bureau, which has responsibility for investigating domestic and foreign corruption, faces the challenge of ensuring compliance with the new law, while also investigating a wide range of other, solely domestic, types of financial offences. Given its resources, you have to wonder at the reality of that. Ireland, which the OECD says accounts for more than 1.5 per cent of global exports, has never sanctioned a person or company for bribery abroad.
A serious, well-resourced, and internationally connected capacity to investigate and prosecute foreign bribery is required. Ireland profits hugely from the role it plays in the globalised economy. It should not shirk the responsibilities that come with that privileged position.