In January 2026, a federal jury in the U.S. District Court for the Northern District of California found competitive swimming’s international governing body, World Aquatics (AQUA), liable for orchestrating an illegal group boycott under the Sherman Act. The jury found that World Aquatics (formerly the Fédération Internationale de Natation, FINA) had used its exclusive authoritative powers to stifle the rise of a rival, the International Swimming League (ISL). The jury’s assessment of the actual financial damage inflicted on the ISL? A mere $1.00.

‍Can a $1 verdict truly change sports governance?

At first glance, this nominal payout seems more like a slap on the wrist, letting Swiss-based AQUA off the hook while denying the ISL the $41 million it sought in lost profits. However, it’s important to look beyond the monetary damages to the broader significance of this case for the structure of sports governance as a whole. In fact, this verdict, combined with a concurrent $4.6 million class action settlement with the ISL’s elite swimmers, represented a continued erosion of the legal shield that international sports governing bodies (SGBs) had hidden behind for decades: the so-called "sporting exception".

What was the sporting exception supposed to protect?

The sporting exception was a legal principle that acknowledged the unique structure of sports governance, the societal value of athletics, and the necessity of regulations that sometimes deviated from competition law in the interest of preserving athlete safety and fair play. Codified in European jurisprudence through Court of Justice of the European Union (CJEU) decisions such as Meca-Medina, and also reflected in Article 165 of the Treaty on the Functioning of the European Union (TFEU), the sporting exception recognized that rules strictly inherent to the integrity of the sport, athlete safety, or fair play could fall outside the prohibition of anticompetitive agreements.

In theory, the exception was meant to protect basic regulatory functions. Yet in practice, SGBs used the sporting exception as a way of maintaining dominance over their sport, stifling alternatives for athletes and dampening creative competition. Over the years, SGBs such as FIFA, the IOC, the International Skating Union (ISU), and World Aquatics (AQUA) claimed the exclusive prerogative not just to enforce the rules of the game, but to control broadcasting rights, cap athlete compensation, or veto any alternative leagues attempting to organize competitions.

In 2023, however, that power began to splinter at the highest levels of global sports. The legal groundwork was definitively laid in the CJEU's landmark 2023 rulings in European Super League Company, International Skating Union v. Commission, and Royal Antwerp Football Club alongside the U.S. Supreme Court’s unanimous decision in NCAA v. Alston. Together, those cases severely limited the sporting exception and established a firm judicial principle. SGBs could not wield discretionary, unconstrained sanctioning powers to protect their own commercial monopolies under the guise of "protecting the sport."

Why swimming?

Yet those court battles involved either lucrative, high-profile sports such as soccer, collegiate sports empires, or winter sports circuits. No one expected competitive swimming to become the next major legal battleground. Unlike European soccer or American basketball, competitive swimming is not a commercial goldmine. Swimmers routinely log grueling hours in the pool for minimal prize money, relying on modest national federation stipends and limited sponsorships to pursue their passion. Because the sport lacked major broadcast revenues, it was the last place anyone anticipated an antitrust showdown.

This economic reality gave AQUA an essentially unchallenged monopoly. As the self-proclaimed "sole and exclusive" authority governing six aquatic disciplines across more than 200 nations, it ran an uncontested monopsony over the athletes and national federations in its purview.

Then came the International Swimming League in 2017. Created by Ukrainian billionaire and swimming enthusiast Konstantin Grigorishin, the ISL introduced a novel concept: a mixed nation, team-based global swimming circuit offering elite swimmers guaranteed contracts and meaningful prize money. For swimmers accustomed to earning a fraction of what other professional athletes make, the ISL’s offer was irresistible.

AQUA’s initial response was not to offer better compensation, but rather to act swiftly to crush the competition. It first warned any ISL-contracted swimmers that participating in unauthorized meets would ban them from the 2019 World Championships. It also issued directives to more than 250 member federations, invoking the now-amended FINA General Rule 4 to compel a coordinated worldwide boycott of the ISL.

Rather than back down, the swimmers and the ISL took Swiss-based AQUA to court. After several years of battles, the resolution finally landed in late 2025 and early 2026. First, AQUA settled the swimmers’ class action lawsuit in October 2025 for $4.6 million. As part of the settlement, AQUA was prohibited from enacting any rules or maintaining policies that restrict the organization of alternative swimming events or limit the ability of athletes to seek compensation from these events. In January 2026, the court delivered its own unambiguous legal finding. AQUA’s coordinated boycott was determined to be an unlawful, anticompetitive move designed to protect its monopoly and commercial interests. By applying the Sherman Act to an Olympic discipline with modest commercial margins, the court demonstrated that no corner of sports governance remains immune from antitrust enforcement.

Who really bears the risk?

It is true that $1 nominal damages award highlights a continued compliance barrier. By escaping a crippling financial payout, AQUA emerged almost unscathed financially beyond the payout to the swimmers, thus preserving its dominant market position and financial reserves. For future commercial innovators in low-revenue sports, the verdict illustrated the steep cost of entry and the necessity of major financial reserves required to hold their own.

Still, the legal line in the sand has been drawn. The transformation of sports governance and the erosion of the sporting exception didn't stop with the Super League or the NCAA. The International Swimming League case proves that courts will hold governing bodies accountable, whether an industry generates significant revenue or not. Sports federations that continue to weaponize their control over athlete eligibility and their ability to authorize official events in order to protect their dominance will risk being challenged in court as opposed to preserving their regulatory powers.

Moving forward, federations need to continue to realign their sports governance standards. This includes increased transparency, a clear separation between legitimate athletic rules and commercial self-interest, and genuine cooperation with teams and athletes. With an adaptive, compliance-driven mindset, the future of sports governance looks significantly brighter.

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Many anti-corruption conversations at BriberyMatters focus either on corporate compliance or the quality of countries’ public sector institutions. Less examined are the social determinants, individual behaviors and economic incentives behind corruption. What motivates an official to demand, or a citizen or firm to pay, a bribe? To answer those questions, could we treat anti-corruption like a social science experiment, testing a hypothesis against empirical evidence? If given an opportunity in the future, could such an approach allow us to rebuild better anti-corruption programs within the international development sector?

To explore these ideas, I spoke recently with Christopher Yenkey, Associate Professor in the Sonoco International Business Department at the University of South Carolina Darla Moore School of Business, and a core faculty member of the university’s Rule of Law Collaborative. Yenkey is an economic sociologist concentrating on organizational theory, market formation in developing countries, corruption, corporate wrongdoing and social distrust, among other topics. In Yenkey’s view, the field has no lack of theories about why corruption happens, accompanied by accepted wisdom about how to design and implement anti-corruption programs. He argues that anti-corruption research needs rigorous field testing of known anti-corruption strategies, akin to the randomized field trials that support public health efforts. “Corruption is a social disease,” he explained, “so we should have a stronger focus on testing social cures.

Yenkey’s interest in this topic arose from his graduate study of nascent stock exchanges in Africa, in particular how to create an exchange in a context of low transparency and thin information. “Everyone he met," he told me, “was reading Douglass North, and understood the importance of sound institutions.” When a major fraud scandal erupted during his fieldwork at the Nairobi Securities Exchange, he studied the social factors that explained fraud victimization. The results showed a surprising pattern: clients of the same ethnic group as the corrupt stockbroker were more, not less, likely to be victimized, because these clients assumed the broker with whom they shared an ethnicity was trustworthy, and thus did less due diligence. That work led Yenkey to the study of corruption itself, including empirical analyses of when and why average citizens say no to petty bribery, when they take part, and what leads them to determine that participating is in their interests.

Yenkey sees the behavioral roots of corruption in concerns about status and dignity, as much as about money. As a result, he thinks that people can be reoriented to think differently about the public good, and thus to self-regulate as an anti-corruption strategy. However, he cautions, making that change is easier said than done.

For example, he described a recently-published paper (behind paywall) he co-authored showing that Kenyan citizens are willing to pay petty bribes that help them navigate a personal dilemma, such as getting out of a (deserved) speeding ticket, or getting a new job after being fired for poor performance. Yet at the same time, those same respondents conceded that such “self-interested” bribes are damaging to the public good – just as damaging as a bribe paid to an abusive official who demands payment for a required service. In fact, respondents reported being more likely to feel shame or embarrassment when paying such “self-interested” bribes, which means those payments are more likely to remain secret. The study also found a surprising “preaching to the choir” effect in common anti-corruption messaging: warnings that participating in corruption will harm others in society is primarily effective on those who already strive to avoid participating in bribery. This tendency thus leaves the most problematic participants in bribery unchanged.

As noted, Yenkey would like to see future anti-corruption efforts treated like vaccine trials: rather than rely on theory, the anti-corruption community needs to design interventions, test them, and collect evidence. As an example of what he has in mind, Yenkey is looking to launch an analysis of what will happen when there is an end to the war in Ukraine, once reconstruction money begins to flood in. He would like to research the motives and behaviors of the country’s procurement officers now, so that effective interventions are ready before the money arrives. As he put it, the incentive to extract is always there; the aim should be to determine what will reliably hold that incentive in check, and test and evaluate responses, and implement the needed interventions.

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On April 12, 2026, Hungarian voters ended sixteen years of Fidesz party rule in a landslide. Péter Magyar's Tisza party swept in with the largest mandate any party has received in Hungary's democratic history, and while economic stagnation and inflation drove much of the vote, corruption fatigue ran through it. Polling in the lead-up to the election consistently pointed to public frustration with graft as one of the forces pulling support away from Viktor Orbán, a leader whose government had, by the European Parliament's own description, turned Hungary into a "hybrid regime" where elections continued but democratic norms and state institutions were undermined.

In advance of the first TRACE event in Hungary – in Budapest on November 18 – this three-part series examines the EU country that now strives to move from entrenched, systemic corruption toward international anticorruption standards.  Part One explains how widespread corruption was made possible and largely kept hidden. Part Two will explain the costs to Hungary of corruption during the Orbán regime, particularly for education and health care. Part Three will look at the solutions for combatting corruption and for recovery of stolen assets.

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Systematic Corruption under Orbán

Hungary ranked as the most corrupt country in the EU during the last 4 years of the 16-year Orbán Administration, during which systemic corruption cost the Hungarian state as much as €150 billion, according to Ferenc Bíró, head of Hungary's Integrity Authority. Only since 2021 has the annual GDP of Hungary substantially exceeded €150 billion.

Readers familiar with entrenched kleptocracies elsewhere will know that figure far exceeds the $4.5 billion stolen from the Malaysian state fund 1Malaysia Development Berhad (1MDB), or the $4 billion likely stolen from the state of Congo under former dictator Mobutu Sese Seko over his three decades in power.

The more instructive question is not how much was taken, but how the system was built to make taking it possible, and to make it difficult to notice.

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Three Ways the System was Built to be Exploited

Three structural features of Hungary under Orbán, working together, created conditions where large-scale diversion of public assets could continue for years with minimal exposure.

The first was media capture. Over sixteen years, ownership of the press in Hungary was consolidated steadily into the hands of government allies, narrowing the space for independent investigative reporting that might otherwise have surfaced problems earlier. Only a few media firms, including Átlátszó and Direkt36, criticized the government by publishing evidence-based exposures of systemic corruption, cronyism, and state capture. They did so against a media landscape tilted heavily toward the government's narrative.

The second was public procurement rules that systematically favored a narrow set of bidders. Transparency International Hungary found that in 2024 alone, framework agreements worth HUF 3,219 billion (€8.25 billion) were concluded, and in more than two-thirds of those cases, the contracts were awarded in a manner that restricted competition to a single bidder.

The third, and most consequential for understanding where the largest sums went, was the use of opaque foundations and private equity structures to move public money outside the reach of ordinary public scrutiny. This is where the Hungarian National Bank's own foundations offer the clearest case study of how the mechanism worked in practice.

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A Familiar Cast of Characters

These structural conditions produced a recurring pattern of cases, not a handful of isolated incidents. Among the most cited is the “Elios case,” involving EU-funded street lighting contracts awarded to a company co-owned by Orbán’s son-in-law, István Tiborcz. Investigators at the EU’s Anti-Fraud Office (OLAF) found evidence of collusion and inflated pricing, but Hungarian prosecutors ultimately declined to pursue charges. By the end of 2024, Transparency International Hungary found that the Hungarian state had funneled HUF 1,311 billion (roughly €3.36 billion) into private equity funds with little transparency or accountability, nearly half of it managed by just two firms: one owned by Tiborcz, the other by Lőrinc Mészáros, a childhood friend of Orbán’s who rose from gas fitter to one of Hungary’s wealthiest men.

The Bertelsmann Transformation Index reached a similar conclusion in its own assessment of the country, finding that “corruption and oligarchization distort market competition” in Hungary’s economy. These cases share a structure with the MNB scandal below: public money, routed through opaque private vehicles, benefiting a small circle with direct ties to the prime minister.

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The MNB Foundations: A Case Study in Institutional Capture

In 2014, under then-governor György Matolcsy, the Hungarian National Bank established a set of foundations and transferred more than HUF 266 billion (€760 million) in central bank assets into them, later consolidated under a single entity: the Pallas Athéné Domus Meriti Foundation. Asset management passed to a company called Optima Befektetési, which then raised additional public funds from other state-linked bodies, eventually overseeing some HUF 500 billion (€1.42 billion).

What made this structure an effective means to hide the theft of state assets was its complexity. Hungary's State Audit Office reviewed the foundations' activities in 2018 and found no irregularities. It was not until years later, after the Audit Office received a formal complaint, that a fuller investigation began, and a leaked draft report told a very different story: investments channeled through a deliberately opaque, cross-border corporate network that made it nearly impossible to assess the real value of the assets involved, and transactions that appeared to benefit business interests connected to Matolcsy's own son. The Audit Office ultimately concluded the fund had suffered significant losses through what it described as poor investment decisions, made without meaningful oversight of Optima's activities until 2024, a full decade after the foundation was created.

Transparency International Hungary, in its most recent annual corruption report, called the MNB foundations scandal "the most striking example of the impunity of high-level corruption" in the country. Their assessment is direct: at least HUF 270 billion (€760 million) in public money was diverted through this structure. TI Hungary notes that the fate of a roughly equal amount (roughly HUF 270 billion) remains uncertain, and to date, no one has been held accountable.

Manipulation of state institutions undermined their ability to uncover corruption. Hungarian state auditors looked directly at these foundations in 2018 and either missed the theft of public assets or were not permitted to see it clearly. The mechanism was not hidden so much as it was built to be unreadable, layered deliberately across enough entities and jurisdictions that accountability became someone else's problem to establish.

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What Comes Next

Hungarians are only now coming to understand the scale of the theft of state assets by senior officials of the Orbán administration, and how opaque structures like the MNB foundations made that possible without scrutiny for so many years. Efforts to locate and recover stolen assets have just begun by the new Magyar administration, but the negative impacts for the Hungarian people have already become apparent.

Erosion of the country's education and healthcare systems, which were centralized, restructured, and underfunded relative to its European peers over the 16-year Orbán administration, provides the starkest understanding of the impact of government corruption in Hungary.  Part Two of this series will look at both those costs, and at what it will take to rebuild.

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Previously for BriberyMatters, I covered the first financial sanctions issued against a firm by the French Anti-Corruption Agency (AFA), in conversation with Valentina Lana, who teaches law at Sciences Po and is an in-house private sector ethics and compliance attorney. The same July week that decision was announced, the AFA also issued its 2025 Activity Report (in French), offering a broader look at its work. The release provided a useful jumping off point for a continued discussion with Lana, exploring what conclusions can be drawn from the report.

Lana characterized the AFA’s approach as increasingly robust, as expected for an agency entering a stage of maturity, following the December 2024 restructuring detailed in the report. The AFA created two “sub-directorates,” aimed, respectively, at countering corruption in the public sector, split into departments covering national and local government bodies, and in the economic sector, which encompasses both private firms and state-owned enterprises. The AFA’s control and advisory functions are distributed across those sub-directorates such that, Lana said, she hears from colleagues that the Agency is becoming more effective, sharing approaches and avoiding silos. She noted that the restructuring will advance the November 2025 National Multiannual Anti-Corruption Plan 2025-2029, setting out a whole-of-government approach to fighting corruption and closer coordination across ministries.

An element of the report that stood out was a near-tripling of whistleblower complaints submitted to the AFA, from 802 in 2024 to 2,257 in 2025. However, the report makes clear that only 11 percent of those were admissible for review. Lana told me that there is no connection here to any particular change in corruption levels, more attention to the issue of corruption in France or better data collection. Instead, she said, citizens are increasingly aware of the existence of these reporting channels (in the AFA as much as in other organizations, both public and private), and often use them to file complaints about issues that at times are not relevant to the Agency’s work or lack merit. Likewise, as the report lays out, much of the increase in recent convictions for integrity offenses are tied to the Urgo pharmaceutical case; though as explained here, that case did lead the AFA to institute stronger controls in the healthcare sector.

One sector-specific shift Lana highlighted is an increased focus on ports and airports as high-risk. As reflected in the report, the AFA was granted new powers following a June 2025 amendment to a new French law on narco-trafficking. Now all companies operating in critical activities in French port zones must have an anticorruption compliance program, whereas under Sapin II, all other firms have applicable staff size and turnover thresholds to introduce such a program. In this way, as she and I discussed, there are some parallels to the US pivoting FCPA enforcement to confront drug cartels and other transnational criminal organizations.

Another finding in the report I asked Lana about is the point that many French subsidiaries of foreign parent companies are importing their headquarters’ codes of conduct without adapting them for French realities. Here, Lana added an important nuance: such a practice is entirely legal. She told me that at one point, there had been a proposed "Sapin III" reform that would have required large French subsidiaries to maintain their own independent programs, but the provision did not survive the legislative process. Finally, I asked Lana about the report’s discussion of the AFA’s use of convention judiciaire d'intérêt public (CJIP) mechanism, the “judicial agreement in the public  interest,” akin to a deferred prosecution agreement in the US. There were four new CJIPs in 2025. Notably, in April of this year, France’s National Assembly aimed to abolish the CJIP in a vote to amend the law on social and tax fraud, a decision that did not survive reconciliation with the Senate version.

Among the reasons for this effort, according to Lana, is that some deputies viewed certain CJIPs as too lenient or granting excessive protection to the firm in question, and some believe that a CJIP is just a “behind closed doors” deal. However, she told me, an independent judge has to sign off on CJIPs (the so-called homologation process) to ensure that both the procedure of reaching agreement and the fine are sufficient. Not only is the expense of a trial avoided, she said, but what a company might pay under a CJIP – 30 percent of its average revenue from the past three years – far exceeds what might result from a trial. Thus, echoing other voices (like Transparency International-France), Lana called the CJIP indispensable internally, to France's ability to fight corruption and externally, to coordinate cross-border cases with other jurisdictions.

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BriberyMatters has regularly covered increasing risks of corruption in the United States, tied both to recent regulatory and enforcement changes, and to President Trump’s extensive business interests. One issue took the headlines on August 11, when the Financial Crimes Enforcement Network (FinCEN) made permanent the rule ending beneficial ownership reporting for all domestic entities and US persons under the Corporate Transparency Act, and announced it would delete previously reported US-person information from its database. This decision, framed as relief for small businesses, carries real corruption risks, as I previously explored.

Then that same week, on August 14, a new concern emerged: the Office of the Comptroller of the Currency (OCC) granted preliminary conditional approval for a new national trust bank, World Liberty Trust Co. (WLTC). WLTC is closely tied to President Trump, his family and his business associates. WLTC shares indirect common owners with World Liberty Financial LLC, which sits within the Trump family's network of crypto ventures. WLTC plans to issue and custody World Liberty’s stablecoin, and is expected to be chaired by Zach Witkoff, a World Liberty co-founder and son of White House special envoy Steve Witkoff. Among WLTC's passive indirect investors is DT Marks SC LLC, whose president is Eric Trump.

It is important to be clear about what the OCC has granted. Crypto companies have increasingly sought OCC national trust bank charters, particularly after Congress passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in July 2025. As lawyers have explained (for example, here and here), such charters offer crypto companies certain regulatory benefits while streamlining oversight. WLTC will not be eligible to make loans, accept deposits, or have Federal Deposit Insurance Corporation (FDIC) protection. But, as the Independent Community Bankers of America (ICBA) argues, such banks “avoid many prudential safeguards required of full-service banks.”

The OCC also made clear that to win final approval, WLTC must ensure compliance with the Bank Secrecy Act and Office of Foreign Assets Control (OFAC) requirements, and train staff in anti-money laundering. Still, the move sparked a quick response. Writing on X, Donald Sherman, President and CEO of Citizens for Responsibility and Ethics in Washington (CREW) called the approval "the most egregious example to date of the President's businesses profiting from his government job." Senator Elizabeth Warren and colleagues drafted the Ending Presidential Corruption in Banking Act, writing, “This is the most brazen act of self-dealing our financial system has ever seen.” Among other things, the Act (unlikely to advance in this Congress) seeks to “prohibit Presidents from owning or controlling banks”.  

After WLTC applied for its charter in January 2026, the OCC received public comments about the President’s conflicts of interest, as well as World Liberty Financial’s links to foreign investors, which have been scrutinized in the media. The OCC sought to address these concerns in its preliminary approval, pointing out that World Liberty Financial, Inc. itself “is not a party to this application,” and its investors "would not have an investment in, or control over, the Bank."

Yet as noted earlier, the OCC also writes that WLTC shares indirect common owners with World Liberty Financial LLC. There is an important distinction at play: that LLC is separate from World Liberty Financial, Inc. The Inc.’s structure has been documented by the Center for American Progress, while the ownership of the LLC (and the identity of those indirect common owners) is not specified by the OCC. But regardless, the OCC does record the family tie to WLTC, running through DT Marks SC LLC. Thus while the OCC is technically accurate, it is clear that the same family is invested in both WLTC and the Inc.

The OCC’s assurances notwithstanding, a perception of potential conflict remains. Pending final approval, a sitting President will oversee a regulator that in turn will oversee a bank that will issue and custody the stablecoin of his own crypto venture. Structurally, the OCC, as a bureau of the Treasury Department led by a presidential appointee, is arguably less insulated from the White House than the Federal Reserve, which oversees traditional banks. The OCC did write in its conditional approval that career staff decided the matter "consistently with their statutory duties and ethical obligations," but it will be critical to track how the OCC's conditions are met, as well as how WLTC is supervised going forward.

In the nearly 10 years since its creation, the French Anti-Corruption Agency (AFA) had never issued a financial penalty pursuant to its authority under Article 17 of the Transparency, Anti-Corruption and Economic Modernisation Act, known as Sapin II. That changed this July with a €350,000 fine against an unnamed company, and a €60,000 personal fine against its legal representative. The decision (in French) followed a 2024-2025 audit that revealed the company lacked seven of the eight required Sapin II compliance measures. The company argued that the remediation steps it took after the audit should mitigate the need for a penalty, but the AFA’s Sanctions Committee, an independent body within the Agency, disagreed. The Committee did, however, agree to allow the company to remain anonymous.

To understand the significance of this sanction, I spoke recently with Valentina Lana, an attorney who teaches law at Sciences Po, currently holds an in-house ethics and compliance role in the private sector, and works with Sapin II's principal author. I was curious in particular to know whether this decision signals that the AFA is stepping up its enforcement role.

First, Lana told me, it is not possible to know whether there was an actual, underlying act of bribery. The AFA can only audit companies to determine whether an adequate prevention program has been rolled out. A company can be referred to the Sanctions Committee if the AFA considers the program up to standard. Moreover, she explained, the AFA has two main roles: to advise companies and public bodies on building their anticorruption programs, and to audit whether those programs actually work. Given that the AFA lacks the resources to review every company subject to Article 17, it prioritizes sectors by year and selects firms to audit. The company in this case may have just happened to be on that year’s schedule, or a whistleblower may have flagged its poor compliance approach.

The previous times that the AFA deemed a prevention program insufficient and referred the case to the Sanctions Committee, the Committee declined to sanction, instead issuing a compliance injunction rather than a monetary fine. In Lana’s view, those outcomes generated a kind of risk-aversion within the Agency. But this time, she explained, the Committee’s decision was clear-cut, given the extent of the company’s compliance deficiencies. As she put it, “At first glance, when the decision says seven measures are missing, one can only think the company basically did not do much.”

Lana also flagged the key procedural moment in this instance, as noted above. In the prior cases, the Sanctions Committee had given companies extra hearings and time to build a compliance program before ruling on potential penalties. It was based on that precedent that the company wanted credit for its remediation efforts. When the Sanctions Committee took a less forgiving posture, judging the company as of the date of its control report, it said that to do otherwise would both undermine Sapin II’s deterrence power and be anti-competitive.

The fines, Lana pointed out, sit well under the Sapin II ceiling (€1 million for an entity and €200,000 for an individual, respectively). Lana considers those numbers intentional; she feels the AFA is filling its “pedagogical” function, showing that the Sanctions Committee is active while not seeking to destroy the first company it catches. Because the AFA allowed the company to remain anonymous, it will not suffer reputational damage, which might weaken the deterrent effect of stepped-up enforcement. But by the same token, such a move demonstrates that the AFA is willing to work with companies, rather than being excessively punitive, which may encourage companies to improve their compliance performance.

Moving forward, it will be worth watching whether the AFA now moves more often and more aggressively, whether low fines and anonymity remain the template, or whether a future case tests the AFA’s approach. One thing is clear, Lana indicated during our conversation: ten years after Sapin II, French companies need to know what is required of them and to show they acted on it.

Since January 2025, the federal government has seemingly stepped back from a range of good governance, transparency, and anti-corruption measures, from the February 2025 executive order pausing FCPA enforcement, to the March 2025 rule by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) exempting nearly all US companies from Corporate Transparency Act beneficial-ownership reporting, to the shifting enforcement priorities of the Foreign Agents Registration Act (FARA), including a focus on domestic groups with foreign-linked funding deemed to be engaged in “terrorism.” However, against that backdrop, there is some evidence that states may fill emerging gaps.

First, a number of states have enacted their own versions of FARA, such as Arkansas, Louisiana, Nebraska, Oklahoma and Texas, and more recently Indiana, with legislation pending elsewhere. These join Utah, which enacted its own law in 2022. It has been pointed out that these laws lack certain exemptions that are in FARA, including treating “advocating for a US subsidiary of a foreign company or other foreign-owned US entity… the same as advocating for the foreign parent or foreign owner.” Florida and Maine have taken a related but distinct approach, restricting foreign-linked political and charitable spending rather than requiring agent registration; Maine’s law has been enjoined on First Amendment grounds.

Second, the New York State Bivens Act was signed into law by Governor Kathy Hochul in May 2026 as part of the FY 2027 state budget, creating a state-law cause of action for individuals to sue federal, state, or local officers, including immigration agents, for violating their constitutional rights. The Act was supported by the New York City Bar Association, through its State Courts of Superior Jurisdiction Committee, Council on Judicial Administration, Civil Rights Committee, Immigration and Nationality Law Committee, and Rule of Law Task Force. Bivens is the 1971 decision that allows citizens to hold federal agents accountable for severe misconduct. The Association said that the New York Act responds to what it called the Supreme Court's "near-abandonment of Bivens," leaving federal officials with "functional impunity for many violations of the Constitution.”

Third, states have started to step up on artificial intelligence (AI) transparency regulation. With no comprehensive federal AI statute in place, California and Colorado have each built out disclosure-driven regimes. California’s 2025 SB 53, the Transparency in Frontier Artificial Intelligence Act, requires AI model developers to publish safety frameworks, conduct risk assessments, and report safety incidents. Colorado replaced its 2024 Consumer Protections for AI Act with SB 26-189, adding “new requirements regarding the use of automated decision-making technology in consequential decisions.” Unsurprisingly, this state-driven approach faces federal pushback: the December 2025 Executive Order, "Ensuring a National Policy Framework for Artificial Intelligence," directs federal agencies to evaluate and challenge conflicting state laws found to be inconsistent with President Trump’s January 2025 EO on “Removing Barriers to American Leadership in Artificial Intelligence.”

Taken together, these efforts suggest that where the federal government has stepped back, whether on tracking foreign influence, accountability of officials, or in the technology sector, states increasingly see themselves as backstops. Whether that amounts to a genuine substitute for federal enforcement at full strength, or simply a patchwork that invites federal challenges, remains to be seen.

As discussed previously in BriberyMatters, President Trump's apparent wide-ranging conflicts of interest have been a recurring concern of anti-corruption experts during his time in office, particularly in this second term. Now, a new concern has come into focus: paid priority access to the President’s statements on his Truth Social platform.

On July 17, Trump Media & Technology Group (TMTG) announced Truth API, a service that the company says it will roll out on August 1. TMTG describes Truth API as “a new business-to-business data feed that provides licensed, real-time access to posts from the highest-ranking Truth Social accounts.” That is, Truth API is essentially a way that firms, including traders, can pay for instant and early access to certain Truth Social accounts, including those of the President himself, his sons, who are engaged in the family’s business affairs, and other members of the Administration who can influence geopolitical events. In this way, clients who pay for the feed would theoretically be able to trade ahead of the public using posts that have moved markets around tariffs, the Iran war, and more.

There are two central issues here. First, Truth API would allow the President to monetize his office directly. As TMTG’s largest shareholder, Trump has a clear interest in boosting the company’s earnings. The more the President posts on Truth Social about market-relevant events, the more useful the service becomes for traders, thus attracting more paid users, in turn generating more revenue for TMTG. It is easy to see how Truth API could be a necessary expense for traders, and TMTG reportedly plans to price the service at $100,000/month, or $60,000/month with a three-year plan, hardly a price point accessible to average citizens who invest on the market. This is particularly salient because the company’s stock has fallen dramatically since Trump returned to office in 2025.

The second is indirect, coming amid scrutiny of the President’s stock trading, and how those trades intersect with his public statements, including on Truth Social, on markets and individual companies. Trump's 2025 financial disclosure listed more than 21,000 transactions. A CNN analysis of that disclosure against his Truth Social activity found at least 44 stock purchases across 21 companies made within a week of favorable posts about those same firms. The Trump Organization, the President’s son Eric Trump, Vice President Vance and White House spokespeople have all insisted that the President’s holdings are independently managed, and that Trump plays no role in making trades. But even so, the appearance of conflicts of interest is of great concern to ethics analysts. As TMTG interim CEO Kevin McGurn remarked, "Markets already move on Truth Social posts." From that point of view, a product that monetizes early access to the President’s posts, given his prior knowledge of, and ability to impact, material government decisions on policy or geopolitical matters, could open the door to trading strategies to leverage that market power, an issue that regulators have already probed.

While it has yet to be shown that any individual trade or Truth Social post crosses a legal line, Truth API formalizes something that has already been suggested: that the President's communications channel has become a tradable asset, potentially allowing him to profit on both sides.

AI can review 10,000 transaction data before I've finished my morning coffee. That is the good news and part of what companies aim for with the increased usage and adoption of AI. The bad? It can also help a fraudster write 10,000 convincing phishing emails with perfect grammar just as efficiently. According to the FBI’s 2025 Internet Crime Report, losses from Business Email Compromise (BEC) in 2025 alone amounted to a staggering $3.04 billion making it the second most rampant internet crime.

With the playing field evened for everyone, it really is a race between defensive AI vs offensive AI. Therefore, the need for strategic and timely intervention to disarm an attack from an opponent is now.

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Mastery of Deception - Deepfakes

Here is the ugly truth of where we are in 2026. AI has multiplied the Lokis of the world by allowing anyone with a bad intention to master the art of deception.

Traditionally, banks required thumbprint and/or physical presence to open a bank account. To keep up with the growing demands of the booming digital banking industry, AI truly became an exciting addition (or in some cases, substitute) to the traditional onboarding process. However, the emergence of deepfakes forces organizations to press the brakes and reassess their AI driven processes.

In March 2026, A 34-year old man used stolen identity documents that were collected through a fake tenancy listing to open 46 fraudulent bank accounts at Netherlands’ ABM AMRO Bank. He used deepfake technology to create images resembling the stolen IDs and managed to bypass the bank’s face recognition software, which automates the comparison between an applicant’s photo ID and selfie (a very popular measure in many payments platforms. The scheme came to light when an officer flagged an anomaly which launched an investigation.

This is an interesting case for compliance as it highlights one of the defining paradoxes of recent times: AI being leveraged to undermine the very AI driven controls designed to enhance security and efficiency.

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AI-Powered Social Engineering

Perhaps 10 years back, someone who has worked in a company for 20 years could say “I know my manager’s voice” with certainty. In today’s world, we have technology that questions our instincts.

Fraudsters are now weaponizing AI by automating social engineering attacks by leveraging human emotions and trust.

The 2024 Arup Scam in Hong Kong is a landmark case that serves as a stark reminder that lowering scepticism and vigilance can cost you a fortune. An employee in Arup was manipulated into wiring USD $25 million to fraudster. The employee first received a phishing email from the company’s CFO and was later invited to a video conference call where familiar colleagues were present authorizing the transactions, except they were digital replicas. The images, audio were all AI-generated deepfakes.

With the collapse of trust as a control mechanism, it truly drives home the point that no actions should be conducted based on “The CFO asked, and therefore I executed” but rather “What does our Zero Trust Policy say?”

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Staying Ahead of the Race

Many current deepfake laws such as the TAKE IT DOWN Act provides protection against non-consensual (authentic and computer generated) intimate imagery on online platforms, which is definitely a step forward in the right direction. However, corporations will still very much need to rely on existing fraud, cybercrime, intellectual property laws against the adversarial use of AI.

In reality, operational controls are stronger defence than legal protections as they prevent the damage in the first place.

For all high-risk checkpoint approvals, there must be a combination of one or two of the following:

• Multi-party approval
• Verifiable credentials such as digital signature backed by the CFO’s email, time stamp, and company stamp.
• Authenticated systems and audit logs indicating who logged into the system, who approved it and when, and whether a passkey was used.
• Cryptographic device, which is the use of passkeys stored on company issued devices to approve transactions.

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Find the Weakness Before Criminals Do and Stay Prepared

Penetration testing is not just a yearly procedure for ISO compliance. We should be genuinely curious about how strong our defences are.

Periodic strain tests should include simulations designed to test whether the deepfake can bypass human judgment and manipulate workflows. This exercise is to assess the baseline on how the team would respond to these simulations and how we should reinvent training.

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Leverage AI Against AI but With Human Intervention

FATF’s Horizon Scan recommends deployment of advanced ID verification tools, including advanced “liveness checks” and combining traditional investigative methods with advanced technologies such as AI powered forensic tools, deepfake detection, and blockchain analytics to combat AI enabled deepfakes. But AI alone is not sufficient. As recommended by the EU AI Act, human intervention is still key in detecting anomalies. AI should support, rather than replace, human verification integrity and anti-corruption functions.

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TLDR

AI is neither a compliance tool nor a fraud tool. A modern approach to compliance and governance will be not to discourage the adoption of AI as it is inevitable. Rather, it should reinforce the need for responsible implementation, constant vigilance and healthy scepticism.

A quick compliance pulse check will be to ask the following questions:

• Is my organization trained to handle AI driven attacks?
• Is my team trained to catch AI driven fraud?
• What are the loopholes in my new AI enabled verification process; does it break during a strain test?
• Does my organization have sufficient cyber insurance policy with extended coverage on AI enabled crimes?

Stay safe!

On July 28, FIFA confirmed a plan to create a new commercial subsidiary, FIFA Forward Enterprise, that would sell a stake of up to 20 percent in the commercial rights to the World Cup and other FIFA competitions to outside investors. The deal is being pitched at an initial equity valuation of $20 billion, with FIFA aiming to raise up to $4.2 billion this year. Thrive Eternal, a fund founded by Joshua Kushner, is expected to lead the investor group, with J.P. Morgan advising FIFA on the structure. FIFA's 211 member federations have been told they stand to receive up to $40 million each if they accept the arrangement before the September 19 deadline, against as little as $10 million if they do not, a gap large enough to function as pressure rather than a neutral incentive.

Two days later, UEFA's 55 member associations voted unanimously to boycott the World Cup and every other FIFA competition until the plan is withdrawn entirely. That is not a symbolic gesture. Poland is due to host the Women's U20 World Cup in September, the British federations are FIFA's only bidder for the 2035 Women's World Cup, and UEFA represents six of the ten top-ranked national teams in the world. A boycott by that bloc may not be dispositive, but it would be felt immediately.

The situation has moved quickly since. By Friday, Carlos Cordeiro, Infantino's senior adviser and FIFA's own representative on the White House World Cup Task Force, resigned in protest, saying he could not stand by while FIFA considered selling a stake in the World Cup and calling the plan a bad deal for football. Cordeiro, a former Goldman Sachs banker, made a point of noting that FIFA already sits on billions of dollars in reserves with no debt, and that raising $4.2 billion by selling a permanent stake in the sport's most valuable asset is hard to justify on the numbers alone. On the same day, FIFA's chief operating officer, Kevin Lamour, said staff had been deceived by Infantino's secrecy in putting the plan together and described FFE plainly as the project of one person. The Asian Football Confederation then joined UEFA and CONCACAF in opposition, calling on FIFA to undertake what it termed an urgent review of its own governance and decision-making framework.

Most of the coverage this week has focused on the money and the politics: the size of the valuation, the Kushner family's proximity to the Trump administration, whether a federation payment of up to $40 million is enough to buy consent by the September 19 deadline. Those are fair questions, and Cordeiro's resignation adds a real one to the list: if FIFA's own finances don't obviously require this raise, what is FFE actually solving for? But the detail that should matter most to anyone who has watched FIFA's compliance history is a single sentence buried in FIFA's own announcement, one that Lamour's comment about "the project of one person" now reads less like a legal formality and more like a plain description of what happened: that FIFA would retain sole control of FFE and exclusive authority over football governance, competitions, the match calendar, and all regulatory and sporting decisions.

That sentence is doing a lot of work, and it deserves more scrutiny than it has received.

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What "sole control" actually means here

FIFA is not proposing a sale in any conventional sense. It is proposing to bring in outside capital while keeping every lever of authority over the thing that capital is buying into. Investors would hold non-controlling, minority interests in the commercial subsidiary. FIFA would continue to decide who hosts, how competitions are scheduled, what the disciplinary code looks like, and how disputes are resolved. In other words, the people writing the cheques would have financial exposure to FIFA's decisions without any structural mechanism to influence, question, or check those decisions.

That arrangement inverts how most institutions think about bringing in outside capital. Ordinarily, an equity stake comes with some proportional claim on governance, whether through board seats, voting rights, or disclosure obligations. Here, FIFA has designed a structure where the capital and the governance are deliberately kept apart, and FIFA sits on both sides of that separation. It is the party inviting the investment and the party that alone decides how the underlying asset is run.

For an organization with FIFA's compliance history, that is not a neutral design choice. It is the precise arrangement that a functioning governance structure exists to prevent.

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A pattern: this organization has been here before

FIFA's reform era formally began after the 2015 indictments, when US prosecutors charged more than a dozen senior officials with racketeering, wire fraud, and money laundering tied to bribes for media and marketing rights. The scandal reached back further, to the collapse of FIFA's former marketing agency ISL in 2001 and the bribery findings that followed it. The response, at the time, was an attempt at structural reform: an independent governance committee, new ethics rules, term limits, and public commitments from incoming leadership that the old culture of concentrated, unaccountable decision-making was over.

FFE reproduces that same structural problem in a new form. FIFA is once again the party proposing an arrangement, defining the terms of oversight, and retaining final authority over how it operates, with no independent body positioned to test whether "sole control" is being exercised responsibly once the money has changed hands, even with investors holding up to a 20 percent stake in the subsidiary.

The Asian Football Confederation made close to this exact argument on Friday, when it called on FIFA to undertake an urgent review of its own governance and decision-making framework rather than simply defending the terms of the deal. That is a confederation that has generally been aligned with Infantino, not an adversary looking for a reason to break with him, which makes the substance of its objection harder to wave off as politics. It is also, notably, not a complaint about valuation or ownership percentage. It is a complaint about process, which is the same complaint the reform era of the last decade was supposed to have settled, but of course never did.

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The question FIFA has not answered

There is also a more basic question here that has received less attention than it should. Thrive Eternal is founded by Joshua Kushner, whose brother Jared Kushner is a son-in-law and former adviser to President Trump. FIFA has reportedly consulted the Trump administration on the plan, and Bloomberg has reported that the idea originated in private conversations between Infantino and Kushner well before any formal process began. Joshua Kushner himself is not reported to hold any political role or direct tie to the administration.

None of this establishes wrongdoing on anyone's part. But it does raise an obvious question that FIFA has simply not addressed: why was this arrangement worked out privately between FIFA's president and an investor with that kind of family proximity to political power, before any of FIFA's 211 members had a chance to weigh-in, and why does the answer to that question matter less to FIFA than hitting a September deadline? A deal reached that way, and then presented to members as close to a done decision with a hard deadline attached, deserves more explanation than FIFA has given it, regardless of whether anything improper actually happened. The explanation FIFA owes its members is straightforward: who was consulted and when, what the actual ownership structure behind Thrive Eternal's investor group looks like, and why the terms were set before members had any real opportunity to shape them.

As of this writing, none of that has been offered. What has been offered is a per-federation payment and a deadline.

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What would actually resolve this

If FIFA wants to demonstrate that FFE is what it claims to be, a genuine long-term investment in the game rather than a repeat of the pattern that produced the 2015 scandal, there is a straightforward way to do it. Publish full beneficial ownership information for every entity in the investor group. Commission an independent review of how the deal was originated and by whom, and release it before the September 19 deadline rather than after. Build a real structural firewall between FFE's commercial decisions and FIFA's regulatory functions, one that does not depend on FIFA's own good faith to hold. And extend to member federations something closer to the disclosure a shareholder would be entitled to, given that federations are effectively being asked to accept payment in exchange for a stake in an arrangement they have no ability to oversee.

None of that has happened yet. What has happened instead, in the space of a single week, is that UEFA, CONCACAF, and the AFC have all lined up against the same arrangement, and two of FIFA's own senior figures have said publicly that it was built in secret by one person and sold to staff and members as something closer to a finished decision than a proposal.

That is not the reaction of an organization that miscommunicated a good deal. It is the reaction of an organization whose own people and closest allies looked at the same sentence about sole control and concluded there was nothing behind it worth trusting. Given FIFA's history, that conclusion did not require much of a leap, and it is the institution's own reform era, and its own repeated assurances that the culture behind that history was over, that made the leap this short.

On 17 June, after a five-month trial, a London jury acquitted Diezani Alison-Madueke of all six bribery charges, closing an investigation that had run for more than a decade.

The prosecution honed in on the defendant’s lifestyle, informing jurors that the former Nigerian minister of petroleum resources and OPEC president, enjoyed a "life of luxury" funded by oil and gas figures seeking lucrative contracts: £100,000 in cash, private jets, chauffeured cars, and more than £2 million spent at Harrods using payment cards belonging to Kolawole Aluko and his company, Tenka Limited.

What the Crown had to prove however, was not that the benefits were lavish, but that they were intended to induce or reward improper performance of her office. Alison-Madueke's answer was that she had no real influence over contract awards, framing herself as a mere “rubber stamp”, and that the spending was reimbursed by the Nigerian state for official business, or by herself for personal expenses.

Former Nigerian President Goodluck Jonathan's written statement, read in court, supplied the institutional backing for that account. Its one quoted sentence rewards close reading: "Any properly incurred incidental or in-kind assistance from third parties would be recorded and reimbursed where applicable." Three qualifiers in fourteen words — properly incurred, would be, where applicable — describe how a system was meant to operate, without certifying that any benefit on the charge sheet passed through it.

The power of his statement was that it moved the benefits out of the category of gifts into that of authorised, reimbursable official expenses, which are lawful nearly everywhere. As the director of Accountability Lab Nigeria Odeh Friday put it to me, the defence did not need to prove the benefits were legitimate — it only needed to make that ‘innocent' reading plausible enough to leave the jury in doubt. The prosecution told jurors no reimbursement records were produced; the defence answered that the records that would have shown the payments were reimbursed had been seized from her Abuja residence in a 2015 search, and that a "gross delay" between her 2015 arrest and 2023 charge had further eroded the material establishing her innocence. Neither story could be verified.

Yet the vacuum that decided this case was not created by any gap in the law itself. Nigeria’s Code of Conduct bars a public officer from accepting benefits on account of their duties, and presumes that gifts from "commercial firms, business enterprises or persons who have contracts with the Government" are received in contravention. The ICPC Act, the country's principal anti-corruption statute, goes even further: section 60 makes evidence that gratification is "customary" inadmissible outright. As Dr Leena Koni Hoffmann — an associate fellow of Chatham House's Africa Programme and a former investigator at Nigeria's Independent Corrupt Practices Commission (ICPC) — explained it to me, gift-giving to Nigerian officials is grey in practice but black and white in law. Her point is that Nigerians are not confused about where a token becomes an inducement; the line is understood socially and stated clearly in statute. What is missing is consequence, a reflection, she argues, of scale, thin institutional capacity and political constraint, not of legal permission.

She also draws a distinction the "custom" framing tends to blur. Gift-giving does have genuine institutional roots in Nigeria — tributes and ceremonial offerings to traditional rulers, chiefs and community leaders. But Alison-Madueke was an appointed technocratic minister, not a traditional authority, and holding an honorary chieftaincy title does not transfer those customs to ministerial conduct. Nor does bureaucratic dysfunction excuse benefits where the stakes are highest: delayed budget releases may explain why a minister's travel is fronted by a third party, but that explanation weakens sharply in petroleum — the state's principal revenue source, and long the centre of its patronage networks.

Odeh Friday's framing is that gift regulation operates at three levels — prohibition, disclosure, enforcement — and that a system running on one of them stays vulnerable. A Nigerian public register, he argues, would force valuable benefits out of the realm of private explanation and into an auditable record. Had such a record existed here the jury would have had something to test the competing accounts against.

The contrast with the United States is instructive. A DOJ 2017 civil forfeiture action — brought against the assets themselves, not against her as a defendant — alleged she steered contracts to Aluko and other businessmen seeking Nigerian oil contracts, and ultimately recovered over $50 million on that theory under a civil standard of proof. Three court systems looked at the same missing record and drew opposite conclusions. Nigeria's reverse-onus provisions and the US civil standard treat absent documentation as counting against the recipient. The UK criminal standard let it count in her favour.

Companies transacting in Nigeria should not read this verdict as permission. The acquittal turned on what could be proved in a London courtroom eleven years and three Nigerian administrations after the fact. The exposure however is real; an official's assurance that a benefit is customary, authorised or reimbursable is not a control — it is the assertion a company would later have to substantiate. Where no public disclosure mechanism exists, the only record will be the one your organisation creates at the time.

A compliance officer's job is never done. Changes in political regimes, amendments to regulations, rules, and legislation regarding compliance and governance, new technologies, and geopolitical events create a maelstrom of moving targets for a compliance team to simplify and understand and then convey to colleagues how these will affect their day-to-day interactions.

Compliance officers have expanding responsibilities and must ensure that any risks for the company are known, shared, and if there are any concerns about these risks, that employees report those through the proper channels. It seems like an impossible task...how can it be done?

First: Compliance training of the past is no longer an option. Annual training that extends for hours cannot convey the constant change that is happening within the compliance sphere. And it won't hold the attention span of your leaners. If compliance is always evolving, so too should your compliance training.

Consider content that takes no more than 15 minutes to complete to ensure that people are engaged.

Second: The means by which training is offered must change. Short, bite-sized videos, interactive PDFs, and even social media posts can gain traction with an audience more readily than a typical eLearning. Using AI software and the help of your marketing team, you can create exciting banners with announcements about changes to policies that you can post on your intranet, or even a private LinkedIn page for your company.

Try your hand at a simple video that shares a new enforcement action or trend that your company should look out for. The key facts, the results of any enforcement, and the implications for the company are a great place to start.

Third: Keep it simple. Adding too much information, text, or screenshot images will be an information overload. If there is a lot to share, consider conducting a live presentation with relevant information and recording it for those who cannot attend. You can use your presentation to develop bite-sized videos to send out as a reminder later on. Trying to squeeze a lot of different areas of change and varying subjects into a 15-minute training will quickly become confusing and lose the attention of audiences.

If you are unable to conduct a live presentation, sharing interactive PDFs is helpful so that an audience can refer back to the resource as needed.

Fourth: Allow feedback from your audience. A short survey at the end of a training, or even a follow-up department-wide call with your learners can help them to convey what they learned and also assist you in areas for improvement. What did learners find confusing? Where do you need to make adjustments for better understanding? Listening to learners will allow you to meet them where they are as much as possible to ensure retention.

Tip: Keeping surveys anonymous may improve your response rate.

Fifth: Review, audit, and update! Once training has been deployed and feedback gathered, make updates! Check recent trends and news alerts in the subject for which you are training and make edits to content alongside any changing legislation that should be addressed. If you are able, adjust training based on audience feedback and be prepared to send out training again. Consider training more than once a year, through different channels (conference calling systems, local intranet, etc.).

With these 5 steps, you can ensure that you are as agile as the expanding realm of compliance and that your company is well prepared for change.

FIFA has spent years telling anyone who would listen that it changed its ways in regard to its corruption issues. Among their efforts include a new disciplinary code, “independent” judicial bodies, a governance overhaul built to bury the memory of the bribery scandals that put more than a dozen officials in the reach of U.S. prosecutors in 2015. Then, on a Sunday in July, a phone call from the President of the United States undid a good part of that work in a single news cycle.

Folarin Balogun, the United States’ leading scorer, was sent off after a VAR review for dragging his studs down the back of Bosnia and Herzegovina defender Tarik Muharemovic’s leg and onto his ankle in the round of 32. The red card carried an automatic one-match ban that would have kept him out of the round of 16 against Belgium. This is a sanction that FIFA’s own officials had said could not be appealed. Days later, FIFA’s Disciplinary Committee invoked the rarely used Article 27 of its Disciplinary Code to suspend the ban for a one-year probationary period, clearing Balogun to play. It was the first time since 1962 that FIFA had nullified the effect of a red-card suspension handed out during a World Cup.

The context of this reversal is what turned an obscure disciplinary footnote into an international story. President Donald Trump personally called FIFA President Gianni Infantino to ask that the case be reviewed. This call was first surfaced by journalists and later confirmed by Trump himself, who said from the Oval Office, “I asked for a review…[I] didn’t think it was a foul.” When the ban was suspended, Trump posted on Truth Social thanking FIFA “for doing what was right, and reversing a great injustice,” and the White House celebrated with a post reading “USA-USA-USA.” The news story wrote itself. The head of the host government picked up the phone, and days later the host nation’s best player was back on the field. These optics would raise the eyebrow of any person watching.

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The Point Compliance Officers Should Take From This

Here is the main issue with what transpired, and it is narrower than most of the outrage suggests. The scandal is not that FIFA reached the wrong result. It may well have reached a defensible one as plenty of neutrals thought the red card was harsh, and U.S. coach Mauricio Pochettino was not alone in saying so. The scandal is that FIFA’s own defense of the decision is now impossible to test. And a decision that cannot be tested is a governance failure regardless of whether it happened to be correct.

That is the part worth contemplating because it inverts how most people instinctively judge these things. The usual question is: Was the outcome fair? The compliance question is: Could an interested party ever prove the outcome was free from undue influence? After a documented call from a head of state, the honest answer for FIFA is clearly no. Infantino’s own statement makes the trap visible. He confirmed the call, then insisted that “FIFA’s judicial bodies are independent” and “operate autonomously, apply the FIFA Disciplinary Code, and decide cases based on the applicable regulations and the specific facts before them.” He added that he had merely explained “there was an ongoing legal process” and would let it run its course.

Take that defense entirely at face value. It still does not help him, because it is unable to be proven. If the committee would have suspended the ban anyway, the call was irrelevant and the timing looks damning. If the call mattered, the independence claim appears false. There is no version of the public record in which Infantino gets to prove the clean story, because he allowed the presidential call and the favorable ruling (at least favorable to the U.S.) to become permanently entangled. That entanglement is nearly impossible to come back from.

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Why the Optics Were the Whole Ballgame

Sophisticated institutions treat the appearance of independence as a substantive requirement. Courts recuse judges over relationships that never influenced a single ruling. Regulators wall off decision-makers from parties with access. Companies document external contacts and build recusal policies precisely so that, when someone later asks “who got to the decision-maker?” there is a clean answer on file. The point of all that machinery is not to prevent influence you can see, to be able to demonstrate, after the fact, that influence you cannot see did not occur.

FIFA had none of that protection here, and the reaction from the rest of the sports world shows how expensive the failure was. UEFA called the decision “unprecedented, incomprehensible and unjustifiable” and said FIFA had “crossed a red line,” warning that “when the certainty of rules is no longer guaranteed by its guardians, the integrity of the game is at stake.” The formerly embattled previous FIFA president Sepp Blatter put it more bluntly: “Red cards are not overturned by political phone calls. They are overturned by rules, evidence and independent bodies.” Jürgen Klopp said the affair “calls everything into question,” and England manager Thomas Tuchel asked the question every compliance officer eventually asks about a discretionary exception: “Who overturns this decision then and when? And on what grounds?”

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The Belgium Angle Made It Worse

Governance problems compound when the party harmed by an exception is denied a fair chance to contest it. The Royal Belgian Football Association said it was “astonished” and asked FIFA for a full explanation of why the suspension was lifted. FIFA treated that inquiry as a formal appeal, appointed a judge, and reportedly gave Belgium only a few hours to file before an early-morning deadline. It then ruled the challenge “inadmissible” because the RBFA was “not a party to the proceedings and, as such, has no standing to appeal.” So, the process was flexible enough to reconsider a settled, unappealable suspension after a call from the White House, but rigid enough to shut out the opponent it directly disadvantaged. Discretion that runs in only one direction is a major red flag (or card) for corruption issues.

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What If It Wasn’t a Soccer Field, But the HR Department?

Strip away the stadium and the argument gets uncomfortably familiar. A company disciplines an employee under a rule it has publicly called non-negotiable. A politically connected official calls the CEO. Days later, the discipline is quietly suspended, and when a harmed third party asks for the reasoning, they are given a few hours to object and then told they lack standing. Any competent compliance officer would open a file and ask the standard questions: Who participated in the review? What was communicated, and to whom? Were normal procedures followed? Has comparable relief ever been granted absent a well-placed phone call? Would the same result have occurred with no call at all?

None of those questions accuse anyone of wrongdoing. That is the point. They are the questions an institution should be able to answer cleanly by design, because it built the paper trail in advance. FIFA cannot answer these questions cleanly.

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Why FIFA, Of All Institutions

This lands harder for FIFA than it would for almost any other organization because FIFA is the textbook case. The 2015 corruption prosecutions made it a permanent fixture of anti-corruption and compliance curricula, and the central lesson of that era was specific: institutions rot when powerful individuals gain outsized, informal influence over processes that are supposed to run independently. The post-scandal reforms were sold precisely as a promise that outcomes would no longer turn on relationships, access, or a phone call to the right person.

That is why the Balogun episode is more than a bad news day. An organization whose entire rehabilitation narrative rests on “we don’t do favors for the powerful anymore” took an almost unprecedented disciplinary action within days of lobbying by a head of state, and then rejected the objection of the aggrieved party on a technicality. Skepticism was the guaranteed output of the situation FIFA created.

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The Lasting Question

The merits of the tackle will be argued and forgotten. As it happens, the reversal did not even buy the U.S. anything on the field (Belgium won 4-1 and knocked the hosts out). What will outlast the result is the governance question, and it is not “should Balogun have played?” It is whether FIFA can show that the reversal decision would have been reached if the phone had never rung.

If it can produce that record, the story fades. If it cannot, then FIFA has taught the lesson it should have known better than anyone: an institution does not lose its credibility the moment it is influenced. It loses it the moment it can no longer prove it wasn’t. As Infantino himself put it, “respect for independent institutions and the rule of law is what protects the integrity of our competitions and the credibility of FIFA.” He is right. That is exactly why taking the call, on this case, at this tournament, was the mistake.

In a previous post for BriberyMatters, I covered the so-called Flamingo Revolution protests, which erupted in Albania against the construction of two resorts, one on a stretch of formerly-protected coastline and the other on a nearby island that was formerly a military site. For this second part of the series, to better understand the underlying dynamics of the situation, I spoke with Esmeralda Ballesha, an Albanian consultant with deep experience in governance, business development, sustainability, and investment policy.

In our conversation, Ballesha noted that while international attention has focused on the involvement of high-profile foreign investors, that is not what is driving anger and internal debate about the two projects. “The central issue for many Albanians,” she told me, “is citizen engagement in decision-making processes, in turn reflecting concerns about transparency, accountability, governance and institutional effectiveness.” What particularly resonates, Ballesha told me, is the perception that opportunities for meaningful public discussion of major developments have been limited. These concerns, she said, have been developing over a number of years.

Albania’s investment governance framework, Ballesha explained, is structured around several distinct but increasingly interconnected legal regimes, each designed to advance a different public policy objective. In particular, she told me, the Strategic Investments Law (mentioned in the previous blog post) establishes mechanisms to facilitate and accelerate large-scale investments deemed strategically important for economic development, particularly in sectors such as tourism, energy, infrastructure, and agriculture. The Foreign Direct Investment Screening Framework introduces a review mechanism focused on national security and public order, an approach that Ballesha says aligns with emerging European practice. However, its scope is limited to security-related assessments and does not extend to environmental or other planning considerations. Finally, the Environmental and Protected Areas Framework governs activities within protected areas, with an emphasis on conservation and was amended (also discussed in the first piece) to allow regulated development. Given the way these frameworks interact in practice, she said, investment projects fall under a multi-layered regulatory environment in which a single project can be subject to parallel assessments.

Ballesha stressed that Albania remains broadly pro-Western, open to high-quality international investment, and continues to move along the path toward EU accession. But trust and confidence in these processes will depend on transparent procedures, consistent implementation of reforms, and clear communication around projects affecting public assets and protected areas. As the country’s institutional framework continues to evolve, balancing economic development with environmental protection to maintain public support will be the key policy challenge. Moreover, she said, a stable and predictable regulatory environment will benefit investors themselves. Overall, Ballesha emphasized that strong investment governance and attracting foreign investment must be complementary, rather than competing, objectives, as part of Albania’s continued economic development and EU integration agenda.

In late April this year, according to the outlet Reporter.al, part of the Balkan Investigative Reporting Network (BIRN), residents and environmental activists noticed construction on a beach near the coastal Albanian village of Zvërnec, close to a protected lagoon. This work was the start of a luxury resort project implemented by the firm Zvërnec South Adriatic Development. Local protests led to clashes with police and private security, and soon those protests spread across the country, sparking a significant political crisis. In this first of a two-part series, I examine the roots and implications of the movement, dubbed the Flamingo Revolution.

One reason the protests intensified and attracted global media attention is that the Zvërnec project has been linked to Jared Kushner, son-in-law of US President Donald Trump, as well as to Qatari investors and a Qatari construction firm. Zvërnec South Adriatic Development itself is reportedly owned by a Dutch offshore firm, with anonymous ultimate beneficial owners. Meanwhile, BIRN claims to have evidence of a complex network of companies and individuals involved in the project, some with allegedly questionable reputations. A late May podcast appearance by Ivanka Trump further exacerbated the situation, as she discussed plans for a second project for a resort on the nearby island of Sazan, formerly a sensitive military site.

The protests are recent, but the story is not. Trump and Kushner reportedly first visited Albania in 2021 and again in 2023. In February 2024, Parliament amended the law on environmentally protected areas to allow for more development. In December 2024, the Strategic Investment Committee, headed by Prime Minister Edi Rama, accepted a 1.4 billion Euro proposal for the Sazan project from Atlantic Incubation Partners LLC, also linked to Kushner. Atlantic Incubation Partners was given Strategic Investment status, which fast-tracks permitting. Reporter.al claims to have seen documents to transfer the island from the Ministry of Defence to the Real Estate Fund for the Support of Strategic Investments, under the Ministry of Economy, allowing for a long-term lease of a parcel of land. With respect to Zvërnec, though legal disputes around the land date back over a decade, construction permits were apparently awarded in early 2025.

In addition to the protests, there has been some internal institutional pushback. In May, Member of Parliament Ina Zhupa introduced a bill that would restore standards for protected areas. In early June, Albania's Special Structure Against Corruption and Organised Crime (SPAK) opened an investigation into why the environmental law was amended, how the Zvërnec land was acquired, and the identity of the investor network. SPAK originally froze the bank accounts of the Qatari investors’ company, though that decision was reversed. A separate asset freeze implemented was reportedly linked to funds tied to the Zvërnec project. Further, two private security companies involved when the initial protests turned violent have lost their licenses.

Rama has vowed the projects would move forward and alleged a foreign hand behind the movement, though he has indicated willingness to work with the EU on a new Strategic Investments Law. In this fast-moving situation as of this writing, protestors have demanded the PM’s resignation, and turned their attention to another, unrelated luxury development. Neither do they back Albania’s opposition Democratic Party, decrying attempts by party leader Sali Berisha to capitalize on the movement. Berisha too has a complex past, having been banned from the US in 2021 over corruption allegations (a decision just reversed amid the protests).

In many ways, this movement mirrors other Gen Z-driven protests, centered on corruption, economic frustration and dissatisfaction with elites. In fact, the Albanian Daily News compared the Flamingo Revolution with a 2025 situation in Serbia, where another, coincidentally, Kushner-backed project stalled amid protests and corruption allegations. In sum, as the Tirana Times wrote, protestors are calling for an end to a “political class that has dominated Albania since the early 1990s… a system many Albanians view as kleptocratic, personalized and incapable of renewal.”

I am approaching this "Ask the Expert" a little differently this time around.

Instead of sharing the answer to a question, I am going to share some of my "lessons learned" as a recent AI adopter in the realm of Learning & Development.

I will start by sharing that I began this journey by asking both IT and our company DPO whether the tools I was using were within the bylaws of our company AI policy. I read our policy carefully, and for record-keeping purposes, I documented every prompt that I asked.

For those who are concerned that AI would share information that was not meant to be reproduced and could be misappropriated, record-keeping is essential!

Once I started to use AI, I would ask broad questions: "can you summarize this article?" "How does this law affect global business?" While the answers were not inaccurate, they were not meeting my need.

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Lesson #1: Specificity is KEY!

Don't be afraid to share as much information as possible with the AI tool. Instead of asking for a summary alone, ask the AI to share a summary based on your role within a company. Ask for the summary to be shared in a conversational tone, in less than 100 words. You can even ask the AI to develop the summary to cater to different authoring tools to better utilize the output more readily within course content.

As I developed my course, on the surface the content looked well organized and properly formatted. But when I finalized my draft and took the course myself as a learner, I found the content less engaging and sometimes even confusing.

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Lesson #2: SPOT CHECK!

I cannot stress enough the importance of reviewing each prompt that AI gives you within the context of a broader course. The language may suddenly shift and sound nothing like the rest of your information. Wording might be less professional and at times the passive, instead of active voice, is used. As you build with AI, make sure the content as a whole sounds clear and concise. AI may sometimes be overly complex in explanations and sentence structure.

These are my two biggest takeaways to save time and effort when attempting to use AI for the first time. But if you stick with it, I can promise that using AI tools as a part of your team, not your whole L&D team, will end up saving you time and resources.

For those of you who are hesitant to dip your toes into the AI pool, my hope is that this encourages you to give these few small steps a try!

Good luck!

While the promise of dramatic reforms following Hungary’s April elections has captured headlines, that same month saw another major anti-corruption development in Europe. On April 22, a Moldovan court sentenced former politician, oligarch and power broker Vladimir Plahotniuc to 19 years in prison for his role in the 2014 theft of $1 billion from three Moldovan banks, which had also implicated a number of other business and political leaders. Plahotniuc’s conviction is subject to appeal, but the significance of the ruling cannot be overstated in a country where President Maia Sandu made tackling corruption the focus of her 2020 election.

Since its post-Soviet independence, corruption in Moldova has taken many forms, including petty bribery, large-scale financial crime, Russian strategic influence, and state capture that frustrated the growth of the private sector. In 2016, the country ranked 123rd on the Transparency International Corruption Perceptions Index, but rose to the 78th place in the 2024 rankings. To better understand the progress that Moldova has made, I spoke recently with Dumitru Alaiba, a Member of Parliament from 2019 to 2022, and Deputy Prime Minister and Minister of Economic Development and Digitalization from 2022-2025, who worked closely on a range of reforms before returning to private life.

Alaiba highlighted his work on the state capture problem in particular. Seeking to do business more freely, he said, Moldovan entrepreneurs used to leave for Romania or elsewhere in Europe. Entrepreneurs could survive, he told me, “but always with one eye over their shoulder.” While in office, he led efforts to slash red tape, digitalize nearly all public services for businesses and cut reporting requirements for SMEs. A significant marker of success, Alaiba explained, is that Moldova has seen an unprecedented record of eight consecutive quarters of uninterrupted private investment growth. That progress has yet to show up in GDP figures, as growth was a modest 2.4% last year (2025), but fallout from the war in neighboring Ukraine looms large (the country has absorbed nearly 140,000 refugees, a larger share of its population than any other country).  

The media landscape stands out as an additional area of progress, as it was previously under the near-total control of Plahotniuc and other oligarchs. Funding opposition voices, including advertising in the wrong media outlets, invited government raids. Civil society groups had few pathways to hold their leaders accountable. Alaiba drew a direct line between media capture and corruption: "When they stole the billion,” he said, “they had the media under control, and it was a taboo subject. It wasn't on the news." But the situation has clearly evolved. As of 2026, Reporters Without Borders ranked Moldova 31st globally in its World Press Freedom Index, ahead of 10 EU member states, and the top performer among EU membership candidates.

Given how much of Moldova’s progress has been rooted in judicial reforms, with a particular focus on an anti-corruption court system, Plahotniuc’s sentencing carries not just legal, but symbolic weight. “Given previous levels of mistrust in the justice system," Alaiba said, "society expected him to walk, or to get a light sentence.” Considering the possible delicate balancing act between pursuing justice while avoiding accusations of political score-settling (an issue which came up in my discussion of Hungary in BriberyMatters), Moldova’s example is notable. As Alaiba told me, investigators relied on "a multitude of investigations and credible forensic reports of links to organized crime."

Alaiba is clear-eyed about what hasn't been fixed. Reform has moved more slowly than voters expected, and, as he noted, the country still faces “an uphill battle.” But, overall, the anti-corruption outlook for Moldova is strong. With the swearing-in of Prime Minister Alexandru Munteanu in late 2025, the country now aims to complete an ambitious set of reforms, targeting 2028 for EU accession.

In November 2025 for BriberyMatters, I examined the status of Ukraine’s ongoing fight against corruption. With the next annual Ukraine Recovery Conference taking place in several weeks in Gdansk, Poland, it is a good moment to return to the question of how to ensure transparency in the reconstruction process, and, in particular, the role of businesses in the effort. To that end, I spoke with Sofiia Sapihura, a leading Ukrainian anti-corruption researcher and consultant, who was lead author of Leveraging Integrity for Ukraine’s Reconstruction: The Role of Ethical Businesses, prepared by Accountability Lab and the Corporate Governance Professional Association of Ukraine with the support of the Denmark-funded New Democracy Fund. Our conversation covered both what Sapihura considers reasons for genuine optimism as well as the real risks that still remain.

Sapihura sees real improvement in Ukraine’s integrity landscape, which is backed up by recent data. For instance, she pointed to the OECD’s 2026 Anti-Corruption and Integrity Outlook for Ukraine, which found that the country’s “strategic framework for anti-corruption and public integrity is among the top performers compared with OECD countries.” As Ukraine’s National Agency on Corruption Prevention (NACP) points out, that review covered criteria such as anti-corruption strategies, lobbying, conflict-of-interest, political financing, public information transparency, judicial integrity mechanisms and public procurement.

Sapihura further noted a range of factors driving this performance, including the work of civil society groups and the media, as well the war, which has created a link between fighting corruption with patriotism. In particular, her work has focused on the anti-corruption role of the private sector itself, notably how local firms are grounding their operations in integrity. As she told me, “Companies that have invested in compliance systems and internal risk management frameworks are seeing positive results, and the climate supports those who want to do business the right way.” Ethical Ukrainian businesses should not be viewed as potential victims of a corrupt system or as risks to be managed, but as active partners in mitigating corruption.

Some caution can be drawn from Corruption in Ukraine 2025: Understanding, Perception, Prevalence, an annual survey of both entrepreneurs and citizens at large conducted by the firm Info Sapiens, ordered by NACP with a range of EU funders. That report notes that while 2025 saw “a break in the trend of increasing perception of corruption,” “the share of respondents who report having corruption experience in 2025 does not differ statistically significantly from the indicators of 2023–2024.” Further, the report states that “corruption for the third consecutive year remains in second place among the main problems,” facing citizens. But by the same token, among businesses, “the assessment of corruption as a ‘very serious’ problem…decreased significantly, from 76% in 2024 to 65% in 2025.”

These trends are playing out, Sapihura told me, in two sectors that are at once central to the reconstruction effort and, historically, the most corruption-prone in Ukraine: energy and construction. Here she noted a certain type of bifurcation. Energy companies tend to be sophisticated with compliance officers and risk frameworks and are increasingly integrated into EU networks. On the other hand, construction companies are largely domestic-facing with fewer integrity systems, and integrity rarely features in their priorities. Further, as we discussed, given that reconstruction needs are estimated at roughly $524 billion over ten years, and that the money will flow through multiple channels, there remain risks in Ukraine’s tender processes.

In response, Sapihura proposes a mechanism whereby business associations would be engaged as monitors, drawing on the expertise of business owners and association staff. The organizations can review bid documentation, assess the quality of bidders’ work and verify that their quoted prices are fair. Careful design would be essential: companies should assess proposals from regions other than their own to reduce collusion risk, and the mechanism would need safeguards against misuse to gain competitive advantage. The sheer scale of reconstruction actually reinforces the case for diversified, private-sector-engaged monitoring, as no single centralized government mechanism could cover everything.

Overall, as she advances her ideas, Sapihura remains optimistic for Ukraine’s anti-corruption prospects in the reconstruction process. Citizens and businesses alike, she says, want to ensure that the money is used for its intended purposes.

The recent Executive Order "Urgent National Action to Save College Sports" is now the second Executive Order that has been issued within the first 15 months of the Trump Administration attempting to fix collegiate athletics, which in itself showcases the complex realities and difficulties that face college sports today.

The Executive Order's goal of fairness for all college athletes is laudable, but the persistence of these problems makes clear that solutions are neither simple nor swift. Several competing interests lie at the heart of this debate.

The first being that colleges and universities across the U.S. offer a wide array of options for student athletes who want to continue their athletic successes beyond high school. Small, private universities offer a very different playing experience than that of large, public universities. But both could receive federal funding in some capacity that could now be in jeopardy.

Revenue streams and athlete experience vary greatly between schools due to factors like access to ticket sales for competition, playing venues and training facilities, television rights, donors/boosters, and more.  Student athletes choose a school based on their desired level of commitment to training, competition, and academic interests. Rarely do they even consider whether their school will have the money to keep their sport active for their full playing career, but rather how they will be treated as an athlete. And diverse experiences and opportunities cannot be prescribed to the same, sweeping changes.

Adding additional context to the discussion, in 2025 the House vs. NCAA settlement established a new rule for college athletics that allows top tier NCAA schools to pay players directly for the right to use their name, image, and likeness (NIL). This ruling was triggered by the 2021 NCAA rule allowing "pay to play" options for athletes. For years, the NCAA and universities profited handsomely from college athletes while those same athletes saw none of that revenue beyond a scholarship. The Supreme Court ultimately changed that, ruling that athletes could be compensated for their work.

Nevertheless, the schools continue to maintain all of the power in distributing money to athletes, with the understanding being that the athletes who generate the greatest revenue for their school will receive the most compensation: namely football and basketball players. Those competing in less popular sports, therefore, do not see more money at times, but less, coming to their sports.

For those athletes who are the most highly sought after, they look to increase their compensation. Players often transfer to multiple schools during their playing career in order to generate better NIL contracts, deeming the NIL process a "wild west" in college sports.

The Executive Orders argue that "powerhouse" sports like football and basketball are so competitive in their attempts to recruit top athletes and maintain a winning record, that selects sports are now driving athlete compensation. The result?  Top tier schools driven into debt that then harms opportunities for other athletes in non-revenue generating sports.

And that has become a very real issue among many large universities.

Now the Trump Administration is pushing Congress to take action before the beginning of the 2026-2027 academic year.

The problem - those at the table now attempting to put in place more regulations governing athletes are doing so without any current collegiate athletes in the conversation. A recent meeting at the White House to discuss reform included former Alabama football coach Nick Saban, NCAA President Charlie Baker, SEC Commissioner Greg Sankey, NBA Commissioner Adam Silver, Texas Tech billionaire booster Cody Campbell and the chief executive of the U.S. Olympic Committee, Sarah Hirshland, among others. None of these individuals is a current college athlete who can speak to the perspective of those who are directly affected by these regulations.

For athletes who choose to play at the Division I level, they want to compete and they want to win. These athletes are spending hours each day training coupled with most evenings and weekends in competition while their sport is in season. In the offseason they continue to train, early in the morning and late at night, with sore muscles and sprained and broken bones. These athletes deserve to be compensated for their dedication and hard work. If it is their future that is currently being considered in these Executive Orders and even congressional actions, then these individuals should have a seat at the table.

The universities that recruit these athletes do so for their prowess on the playing field, with the promise of developing skills that will serve them as accomplished members of society off the field. What better way to prepare these young adults for the realities of signing a contract than to ensure they are equipped with the knowledge and tools to make informed decisions as part of their commitment to a four-year university?

If these institutions are willing to make money from the work that these athletes put into their sport while they build lucrative TV and broadcasting rights, then they should also share with these athletes a seat at the table to ensure fairness for everyone involved.

A true team effort.

On April 15, 2026, Democratic Congressman Joe Morelle announced a new Anti-Corruption and Democracy Reform Task Force. Some of those advising House Democrats on the task force have framed the effort as taking a political lesson from Hungary, where Viktor Orbán's April 12 defeat was driven to great extent by popular frustration over a well-documented record of corruption. It is important to note, however, that Rep. Morelle has given the task force a broad and nonpartisan framing. His press release states that the Task Force will look at the executive branch, Congress, the courts and money in elections, to “examine corruption across all levels of government and advance reforms to strengthen transparency, accountability, and public trust.”

US political corruption and efforts to root out that corruption is neither new, nor some past relic. Just last year, former Senator Robert Menendez was sentenced to prison for bribery and related charges. But President Trump has been a particular lightning rod for the anti-corruption community. Citizens for Responsibility and Ethics in Washington catalogued conflicts of interest during the first Trump term; an effort that continues now. Since January 2025, the press has covered the FCPA enforcement pause, the issuance of pardons, the President’s cryptocurrency holdings, his business deals in the Middle East, and more. Recent oil future trades, seemingly timed with developments in the war in Iran – trades which Nobel Prize-winning economist Paul Krugman called “treason” – will be scrutinized by the Commodity Futures Trading Commission.

There is a range of critical questions for any country to consider in the light of corruption allegations. Will press or civil society reporting break through to a wider, less engaged public? Will that information shape citizens’ voting behaviors? Given political polarization, is it possible to build a shared understanding about the conduct of any current or former leader? Perhaps most importantly, what should a country do moving forward: is documenting corruption sufficient to act as a future deterrent? Should a subsequent government pursue asset recovery? Finally, there are major questions about the feasibility – or advisability – of criminal prosecution of a former leader for corruption. The track record from other countries gives a mixed picture.

As Freedom House has written, “Legal cases against former heads of state are commonplace in healthy democracies.” But the risks stemming from such cases are also clear. Researchers at Harvard and Columbia identified an "accountability dilemma" whereby prosecuting former leaders can “have the benefit of enforcing the rule of law, but also risks eroding trust in legal institutions and democratic values.” The Brennan Center argued, as Trump faced prosecution after his first term (importantly, for business-related allegations not tied to his political career), that holding past leaders accountable is critical for democracy, but “weaponized prosecutions intended to settle political scores or sideline popular leaders are a real and serious concern” and risk “undermining trust in institutions and widening societal divisions.”

In fact, both established democracies, such as France, and democracies with more complex histories, like South Korea and Argentina, have successfully prosecuted former leaders for corruption. At the same time, the results of other efforts have been less clear-cut. In Brazil, even after President Luiz Inácio "Lula" da Silva was jailed for accepting bribes, he was eventually re-elected. In South Africa, the Zondo Commission provided a detailed account of "state capture, corruption and fraud" under Jacob Zuma, but while some assets were recovered and reforms passed, very few prosecutions resulted. In Israel, Prime Minister Benjamin Netanyahu has been able to use the levers of state power to forestall his own court case for corruption allegations. In Pakistan, a court eventually overturned the corruption conviction of former Prime Minister Nawaz Sharif. A different example is offered by Ukraine, where civil society-driven revelations about the scale of corruption under Viktor Yanukovych helped in the consolidation of a national identity. Of course, Ukraine is one of multiple instances in which a corrupt leader flees and assets are eventually recovered, ostensibly to be used for critical national needs.

Overall, as these various examples show, the difficult problem is not collecting evidence of corruption, but rather what comes next. Beyond the difficult questions of whether or not to prosecute, moving the needle requires translating documented corruption into something that citizens can connect to their own lives, mobilizes them politically, shifts their sense of their relationship to the state and helps build governments that are accountable to the people.

On 22 April 2026, the Greek Parliament voted to lift the parliamentary immunity of 13 sitting MPs in connection with the “OPEKEPE scandal”- the unfolding investigation into how Greece’s payment authority for EU agricultural subsidies allegedly became, in the words of European Chief Prosecutor Laura Kövesi, an “acronym for corruption, nepotism and clientelism.”

The European Public Prosecutor’s Office (EPPO) is investigating an alleged organised fraud scheme that diverted hundreds of millions of euros over several years. The fallout has been severe: Greece has been fined €415 million, the OPEKEPE government agency (acronym for: “Payment and Control Agency for Guidance and Guarantee Community Aid” in Greek) has been dissolved, and successive waves of resignations have swept through the ranks of implicated officials and MPs since mid-2025.

For compliance practitioners, the more interesting story is what was occurring on the ground and how it managed to look entirely ordinary on paper. According to the EPPO, between 2019 and 2022, individuals with no real link to farming presented themselves as new or young farmers and drew farm aid subsidies based on false declarations of land ownership, fictitious leases, and fabricated livestock counts.  The Greek state ended up paying European money out against pastures declared on archaeological sites, olive trees inside a high-security military airport, and even a banana plantation on Mount Olympus! The head of a Greek livestock-farmers’ federation publicly stated that Greece declared 11 million to the European Union, while in fact had just over five million animals.

Modern compliance frameworks are built around procedural rigor—defined workflows, multi-level approvals, documentation requirements, and, increasingly, automated checks. These systems are designed to ensure consistency, traceability, and efficiency. On their own terms, they often perform exactly as intended. But they also share a systemic limitation: they validate information based on its conformity to expected inputs. When those inputs are inaccurate, incomplete, or deliberately constructed to meet system criteria, even well-designed controls can produce outcomes that appear entirely legitimate.

This dynamic is consistent with OECD work on data-driven integrity, which stresses that corruption and fraud risks often become visible only when information is tested across datasets, indicators, and patterns, not merely reviewed for procedural completeness. The challenge, of course, is that verifying underlying data is inherently difficult and often resource-intensive.

Any system that relies on self-declared information faces a version of the same risk. Controls can ensure that information is collected, reviewed, and approved. But they cannot, on their own, guarantee that the information reflects reality. For many compliance experts, this will feel familiar. The issue is not that the risk is unknown, but that it is often addressed within defined risk categories rather than examined as a broader system dependency.

What cases like OPEKEPE bring to the forefront is the extent to which control environments rely on inputs that can be engineered to meet their own logic. The implication is not to expand controls indiscriminately, but to interrogate more closely where processes depend on self-declared or weakly corroborated information, how easily those inputs can be constructed to satisfy requirements, and whether existing monitoring is capable of distinguishing between formal compliance and substantive reliability. In this sense, the relevant question for companies is not only whether controls are robust, but whether they are being meaningfully stress-tested with simulations against the way misconduct can actually occur. Because the vulnerability is, in many systems, not that controls can be bypassed, but that they can be convincingly satisfied.

On April 12, 2026, the world watched as Péter Magyar and his Tisza party defeated former Prime Minister Viktor Orbán’s Fidesz party, ending former Orbán’s 16 years in power. The results were widely celebrated as a victory for liberal democracy in Europe, a rebuke to an international far-right alliance, and as a chance to reverse the corruption that characterized Fidesz’s rule. An election that many thought would be close delivered an unprecedented mandate, with Tisza winning over 70% of the seats in Parliament. Magyar’s nominally conservative party built a broad coalition of the electorate from left to right, showing that almost all Hungarians wanted change. This constitutional supermajority opens the door to significant and much-needed reform, but now, as the celebrations end, the hard work begins.

To better understand Hungary’s key anti-corruption priorities, as well as risks to be navigated, I spoke recently with Jozsef Peter Martin, Executive Director of Transparency International Hungary and Andrej Nosko, the Budapest-based Co-Executive Director of Pilnet, an organization that helps nonprofits get expert legal assistance.

Both Martin and Nosko characterized the election as a regime change, from competitive authoritarianism back to constitutional democracy. Martin in particular referred to the results as “an electoral revolution.” Each said that Magyar’s top priority must be restoring the rule of law, but while performing a delicate balancing act: doing so in a way that itself upholds the rule of law. Magyar needs to act quickly to demonstrate his commitment to integrity, but he also has to avoid the perception that he is simply seeking political revenge. Thus, they emphasized the need for judicial reform first.

As Martin told me, Hungarians expect “punishments as consequences for corruption, as well as the recovery of state assets to the greatest possible extent.” That requires changing leadership positions, such as the chief prosecutors, head of the Supreme Court (Curia) and possibly constitutional judges. These loyalists of the Fidesz regime, he said, need to be replaced by independent and professionally respected figures.

Beyond the judiciary, Magyar has named the heads of other institutions he intends to remove, such as the President, and the heads of the State Audit Office and the Competition Authority. Martin argued that these moves would be legally defensible: those individuals were not serving constitutional or public interests, but rather the needs of Fidesz. He noted that Hungarians will need to demonstrate patience as corruption cases play out in court, trusting that progress is being made. Nosko described this situation as a trilemma: it is difficult to move quickly, ensure transitional justice and respect the rule of law.

Next, the “legalized” corruption that Orbán institutionalized must be challenged on its substance, not just reversed by fiat. As noted, the state will want to recover significant wealth that was systematically transferred into well-connected private and semi-private hands. One example that Nosko shared was the distribution of shares of Hungary's largest energy company to institutions that supported the regime's far-right international network. Nosko told me that though those assets need to be clawed back, they are now largely privately-held, so the process must be carefully managed. Martin told me that in the case of overpriced public procurements, state overpayments need to be documented, with a focus on the recovery of excess rents.

Further, corruption in the Orbán years was a major drain on prosperity, leaving Hungary one of the poorest countries in the EU. As Nosko explained, Magyar will be under pressure to deliver progress on health care, energy, education and infrastructure, while reforming the tax and procurements systems. This means resetting relations with Brussels. Hungary is badly in need of fiscal stimulus, and securing nearly €19 billion in frozen EU funds is a priority, which will require meeting 27 EU reform measures (“milestones” and “super-milestones”). Magyar intends to join the European Public Prosecutor's Office (which Hungary had not previously joined), which holds sway over safeguarding EU funds against fraud. He has also signaled his desire for Hungary to adopt the Euro, which will likely advance key fiscal reforms.

Both Martin and Nosko pointed out that Hungary has the technical expertise and capacity to deliver on all of these aims, as long as sufficient effort is taken to reform key state institutions. But as I discussed with Martin, the NGO sector now faces its own readjustment. Organizations like TI Hungary spent years as watchdogs, and were constantly under pressure and attacked by government offices such as the Sovereignty Protection Office. They are glad to see the end of Orbán, but will take what he termed a “constructively critical” approach under the new government, ensuring the general direction points towards the rule of law and anti-corruption. The media also has a crucial role to play, but first, as Nosko told me, Hungary must restore an independent press, given that Fidesz controlled roughly 80 percent of both state-owned and private media outlets.

Overall, civil society must manage a delicate shift from adversarial monitoring to constructive criticism, advisory and advocacy. In what Martin called an "optimal situation," there will be agreements and policy disagreements, like in a “normal country.”

Arch Manning collaborating with Warby Parker in a stylish pair of frames; Juju Watkins donning her USC jersey in a State Farm commercial. Seemingly everywhere you turn, a student athlete is partnering with big brands to market their products. There is no denying that college athletes are some of the most prolific marketing influencers in today’s world. These commercials and advertisements, though fun and often light-hearted, are the subject of an extensive and evolving framework of compliance and reputational risk if the deals are mishandled. Through NIL (Name, Image, and Likeness), these young athletes have essentially become businesses themselves, and contracting with these businesses comes with an extensive playbook.

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The Rules of the Game

The NCAA NIL Rule affords student athletes the right to earn money from their name and persona, placing the profit generated from highly televised and widely watched sporting events largely in the players’ hands. Naturally, where there is profit, there are important regulations. NIL was implemented in 2021, and since then, the rules and regulations governing how the program operates have evolved significantly.

In addition to following the NCAA NIL policy, athletes and companies that hire them must comply with the NIL laws of the state in which their school is located. If a state does not have its own specific NIL laws, schools set their own policies, subject to the NCAA’s overarching NIL policy. Several states have implemented NIL statutes that regulate compensation, for example, in ways that protect scholarships and/or restrict certain types of deals or institutional involvement. These laws often also address recruitment-related inducements, booster and collective activities, and disclosure obligations. Furthermore, the College Sports Commission (CSC) has instituted reporting requirements based on compensation amounts that subject these high-dollar deals to substantive scrutiny. Amid this evolving regulatory framework, NIL deals have become the subject of many lawsuits, and Congress has floated multiple bills aimed at federal NIL regulation, though none have yet been adopted. Given this ever‑evolving legal landscape, it is easy to see how critical compliance is for companies looking to solicit student athletes for their marketing ventures.

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Risky Business

If a company enters an NIL deal with a student athlete, it must ensure it is in compliance with all applicable regulations. If such a deal looks like an impermissible pay‑for‑play scheme or fails to cooperate with institutional reporting, it can drag the brand into investigations or public enforcement actions. In addition, the contracts underlying these deals are also major vessels for risk exposure, especially as many NIL contracts are drafted with urgency and rely on templates for other types of social media influencers. This is a risky practice, as student athletes are subject to an even wider net of specific state, school, and NCAA regulations.

Tax risks also abound in this arena. NIL payments create reporting and withholding responsibilities that can be missed if companies run deals “off the books” or through informal channels. Structures that look like income‑sharing or “advances” against future NIL earnings have already drawn comparisons to student‑finance products that regulators later re‑characterized as loans. Companies should, therefore, structure these deals carefully to ensure the transactions they agree to fit the intended form.

Given these complex issues, there is real potential for NIL violations that can turn into reputational disasters for brands if they are not in compliance. Mismanaged deals, predatory terms, or a perception that the brand is exploiting young athletes can create blowback with fans, schools, and regulators. Critically, NIL disputes now routinely play out on social media, multiplying the reputational stakes. The same high‑profile nature of a superstar student athlete that generates massive advertising power comes with the opposite but proportional risk of widespread public reputational damage if these deals are mishandled.

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How to Mitigate the Risk and Maximize the Reward

Despite the sometimes treacherous and evolving regulatory landscape surrounding NIL deals, there are steps companies and brands can take to mitigate these risks and ensure compliance with all applicable rules. Primarily, companies would be wise to treat NIL as a regulated product. NIL deals should be routed and vetted using the same level of legal and compliance review as other high‑risk third‑party engagements. Time spent developing NIL templates that ensure all requirements are met would also be a smart undertaking to minimize risk. With the right playbook in place, NIL deals can be real winners for brands and athletes alike.

In January 2026, shortly before US forces captured Venezuela’s then-President Nicolás Maduro, a new, anonymous account on the prediction market Polymarket bet on the leader’s removal from power, turning $32,000 into over $400,000 in profit. In March, more than 150 accounts bet on the timing of US strikes on Iran, with six traders together netting over $1.2 million. In April, more newly-created accounts perfectly timed bets that White House would announce a ceasefire. These winning bets were made despite the fact that the Commodity Futures Trading Commission (CFTC), which regulates US-based prediction markets, prohibits bets related to war, among other issues. However, Polymarket listed those bets on its main platform, which, though it bars US-based customers, can be accessed using a VPN.

Either these users are making great guesses, or they are trading on insider information, which is where the corruption risk arises. As Joshua Mitts of Columbia Law School and Moran Ofir of the University of Haifa wrote in their March 2026 draft paper, From Iran to Taylor Swift: Informed Trading in Prediction Markets, “approximately $143 million in aggregate anomalous profit” on Polymarket and its competitor Kalshi can be tied to bets in which “traders appear to have exploited material nonpublic information.”

A more troubling possibility is that traders may be betting on outcomes they themselves can influence. This risk was underscored by Senator Chris Murphy when he and Representative Greg Casar introduced the “Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act” in March. Similarly, Senators Merkley and Klobuchar introduced the “End Prediction Market Corruption Act,” and Senators Todd Young and Elissa Slotkin introduced the “Public Integrity in Financial Prediction Markets Act,” both proposing to ban elected and public officials from trading event contracts. Meanwhile, the Wall Street Journal reported that the White House issued a memo warning staff against betting on nonpublic information.

The CFTC, which previously fined Polymarket $1.4 million, leading the company to exit the US market before it was permitted to resume limited US operations, appears ready to crack down. In March, Director of Enforcement David I. Miller offered remarks at NYU Law School naming insider trading, including in prediction markets, as the top enforcement priority. He specifically called the idea that insider trading law does not apply to prediction markets a “myth.” He drew a distinction between using one’s “own knowledge and information to make trading decisions,” for example to hedge risk, with those who use “misappropriate” information, specifically citing “the illegal use of government information to trade.”

It should be noted that these risks of betting on insider political information are playing out not only on online prediction markets. For instance, in April, trades of nearly $1 billion were placed on oil futures, timed with the ceasefire announcement. It has now been reported that the CFTC is looking into those trades, as several Senators have urged.

The Securities and Exchange Commission (SEC) is also looking more closely at prediction markets, under SEC Rule 10b-5 e, which covers insider trading. Further, the US Attorney for the Southern District of New York, Jay Clayton, said that his office is looking more closely at prosecutions tied to insider trading on prediction markets. At the same time, a federal judge blocked Arizona from prosecuting Kalshi, holding that federal jurisdiction preempts state regulation. This Congressional Research Service brief provides a good overview of the range of legal mechanisms that can be deployed by different regulators in such cases. Both Polymarket and Kalshi have introduced new restrictions prohibiting insider trading, aiming to get ahead of a legislative or regulatory crackdown. Meanwhile, firms are being advised to take measures to prevent employees from betting on insider information, similar to bans on insider stock trading.

It is clear that online prediction markets have moved far from their original roots, for example as an important informational tool to predict election results, a way to correct for gaps in polling capabilities in an increasing digital world. Platforms that allow for a wide array of bets, operate offshore, may settle in cryptocurrency, allow anonymous accounts and utilize blockchain technology have outpaced much regulation and legislators’ technical knowledge. This push to update the governing frameworks is critical, to limit corruption risks from geopolitical events.

In November 2024, South Africa became the first African country to assume the presidency of the Group of 20 (G20), a term that ran from December 1, 2024, through November 30, 2025. As part of those duties, the country chaired the G20 Anti-Corruption Working Group (ACWG), kicking off implementation of the 2025-2027 Action Plan, adopted by the G20 in Brazil in 2024. In October 2025, the ACWG released its Chair’s Statement, highlighting a range of efforts undertaken during the year to advance the following priorities:

• Strengthening the public sector by promoting transparency, integrity, and accountability;
• Increasing the efficiency of asset recovery measures, in particular the management of seized assets;
• Enhancing and mobilizing the inclusive participation of the public sector, private sector, civil society, and academia to prevent and combat corruption; and
• Enhancing whistle-blower protection mechanisms.

Several months removed from this historic G20 presidency, to learn more about how that agenda is playing out in Africa in particular, I spoke with Juliet Ibekaku-Nwagwu, Founder and Executive Director of the African Center for Governance, Asset Recovery, and Sustainable Development, Postgraduate Researcher at the University of Sussex, chair of the United Nations Convention against Corruption (UNCAC) Victims of Corruption Working Group, and formerly Special Adviser to the President of Nigeria on Justice Sector Reform and International Relations. Critically, Ibekaku-Nwagwu was the lead drafter on several G20 ACWG reports: on capacity-building for asset recovery and on whistleblower protection.

Given that much of Ibekaku-Nwagwu’s work centers on decisions to return stolen assets to, or withhold them from, their countries of origin, I was particularly curious to hear her views on asset recovery. She told me that the situation is far from ideal. She explained that in 2003, UNCAC established that asset return should be a fundamental principle of international law, but in practice, compliance has remained discretionary. She explained that often, rather than being returned directly to the origin countries, funds identified in bribery investigations are channeled through UN- or World Bank-managed trust funds. Such mechanisms were designed for money to be used to support citizens in countries with corrupt leadership. But, she explained, even when regimes do change, the funds don't always follow, or the return process can take years.

Overall, Ibekaku-Nwagwu told me, while she considers the G20 ACWG a critical tool for raising awareness, it falls short of holding countries accountable for their achievements. To increase pressure on African countries to take concrete anticorruption action, she would like to see the African Union and the African Development Bank be more vocal. That is particularly the case, she said, given that most African countries are not G20 members and often have their interests sidelined in these large multilateral fora.

I was also interested in hearing Ibekaku-Nwagwu’s views on China's growing role in Africa, and the nexus among Chinese investment, corruption and kleptocracy. Here, she deviates somewhat from what is considered “accepted wisdom” in the West. She acknowledged, “The perception is that Chinese companies don’t play by the rules,” but also said that “proving it isn’t always easy.” She told me that Nigeria has prosecuted some Chinese individuals for illegal mining and visa violations, but outright corruption cases remain few. Part of the difficulty, she noted, is structural: US and European governments have prosecuted their own companies for corruption, but whether China would pursue similar accountability for the activities of their own companies overseas is a different question.

Finally, I was curious how Ibekaku-Nwagwu sees the impact on Africa of US developments in the past year. Here too, her assessment is quite measured. In her view, the FCPA enforcement pause has been “more of a political signal rather than a practical shift.” She pointed out that US DOJ investigations into illicit activity have continued. Further, she said, “Countries in emerging markets have not let down their guard, and African anticorruption agencies have not stood down.” Constraints, she said, “arise only when they need the US to provide additional information.” Meanwhile, the UK and EU anticorruption agencies continue their own work, she noted. She told me that “countries are cooperating with each other, and the extraterritorial force the US once provided can be substituted through multilateral channels.”

In her view, the USAID withdrawal has been the more disruptive development, particularly for anticorruption NGOs, while state anticorruption bodies have been less affected. Funding gaps are being addressed, albeit to a limited extent, through the UK's FCDO, the African Union, Germany's GIZ, and the OECD. While European and UK resources don't match USAID’s resources, there are ways to leverage their expertise, and they have been able to fill development funding gaps in a number of critical areas.

FIFA Isn’t Unique

In a recent post, we discussed how FIFA structures World Cup hosting arrangements so that downside risk is borne locally while control remains centralized. Municipal tax allocation provided a clear illustration; even where taxes are legally imposed on FIFA or its subsidiaries, host cities agree by contract to absorb the resulting cost.  

That structure is sometimes treated as a FIFA-specific phenomenon. A closer look at the Olympic Games suggests otherwise. The governance framework used by the International Olympic Committee (IOC) reflects many of the same features, indicating that this approach is part of a broader model for allocating risk in global sporting events.

The Olympics therefore offer a useful comparison as they involve similar bargaining dynamics. A single global organizer, intense inter-city competition, and host governments willing to assume extraordinary commitments in exchange for prestige and perceived legacy benefits. Examining how the Olympics allocate risk helps reveal that FIFA’s approach is not exceptional, it’s symbolic.

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Why the Olympics are the Right Comparator

The IOC, like FIFA, organizes an event that is both globally singular and highly competitive among prospective hosts. Cities bid years in advance, commit to fixed timelines, and accept standards that are largely set by the organizer once hosting rights are awarded.

This dynamic shapes the legal framework governing the Games. Host City Contracts do more than coordinate logistics; they allocate responsibility for meeting requirements whose scope and cost are not always fully predictable at the time of contracting. In that respect, the Olympic hosting model closely resembles FIFA’s approach to World Cup hosting.

The relevance of the comparison lies less in the specific terms of any one contract and more in the underlying structure. The organizer defines the event and its requirements, while host governments assume responsibility for ensuring that those requirements are met.

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Host City Contracts as Risk Allocation Tools

Olympic Host City Contracts are dense, technical documents. On first read, they appear administrative, setting out timelines, responsibilities, and compliance requirements. But their underlying logic is clear; the host government guarantees delivery, financing, and legal compatibility, while the IOC preserves discretion over how the Games are staged.

These guarantees are expansive. Hosts commit to ensuring the availability of public funding, infrastructure, security, and legal compatibility with Olympic requirements. Where obligations are framed broadly or contingently, the risk of escalation remains with the host. Cost overruns, delays, or regulatory complications do not reduce the IOC’s demands; they increase the host’s exposure.

Tax treatment appears repeatedly within this framework. Hosts are typically required to ensure that the IOC and related entities are insulated from local tax burdens arising from the Games. As with FIFA, this insulation is achieved not through a single universal exemption, but through a combination of legislation, administrative relief, and contractual indemnities.

The effect is familiar, even where domestic law would ordinarily impose tax, the host undertakes to neutralize its impact.

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Tax as a Repeating Case Study

Tax obligations are particularly useful for understanding how hosting risk is allocated because they are clearly defined and legally enforceable. Unlike projections of economic benefit or legacy value, tax liabilities arise automatically under domestic law unless steps are taken to prevent or neutralize them.

Olympic hosts have repeatedly enacted event-specific tax regimes to protect the IOC and affiliated entities. These measures often include exemptions from income tax, VAT, customs duties, or withholding obligations linked to Olympic activities. Where exemptions are incomplete or uncertain, host governments step in through indemnities or refunds to ensure that the IOC does not bear the cost.

As with FIFA’s municipal tax clauses, Olympic tax arrangements separate statutory incidence from economic burden. They do not alter the basic operation of the domestic tax law, they operate alongside it, ensuring that any tax consequences associated with hosting are managed by the host rather than by the event organizer.

This is not a loophole or an oversight. It is an intentional allocation of fiscal risk designed to eliminate uncertainty for the organizer and absorb it locally.

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Entity Form vs Economic Outcome

Public discussions of mega-event taxation often highlight the legal form of the entities involved. Non-profits, foundations, and special-purpose entities are assumed to be the key to avoiding tax. Both the FIFA and the Olympic experience suggest otherwise.

The IOC operates through a range of entities across jurisdictions, including non-profit structures. FIFA has adopted similar structures in some host countries but not others. Despite this variation, host governments routinely assume responsibility for ensuring that tax exposure associated with the event does not fall on the organizer.

This convergence reinforces a central point: legal labels do not determine who bears risk; contracts and legislation do. Whether the organizer operates through a non-profit, a standard subsidiary, or another vehicle, host governments agree, explicitly or implicitly, to absorb fiscal exposure tied to the event.

Focusing on entity form therefore misses the more consequential question: what protections are built into the hosting framework, and who ultimately stands behind them?

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Risk Beyond Tax

Tax provides a clear illustration of this allocation of responsibility, but it is not the only area where similar dynamics appear.

Security costs are borne locally, even as requirements evolve in response to global threats. Infrastructure obligations sit with host governments, including long-term maintenance of venues designed for a finite event. Legal and political risk – political backlash, regulatory friction, or unforeseen disruptions – is managed by local officials accountable to voters.

In each case, uncertainty is localized. Hosting agreements assign responsibility for managing uncertainty to the host government rather than to the event organizer.

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What This Reveals About Mega-Event Governance

Viewed together, the FIFA and Olympic examples point to a consistent governance approach for large international sporting events. Organizers retain control over event design and standards, while host governments accept responsibility for ensuring that those standards are met in practice.

This structure reflects negotiated choices rather than accidental outcomes. Host governments enter these arrangements knowingly, often after extensive negotiation. Prestige, soft power, and the hope of long-term benefit remain powerful motivators. But the structure of these agreements matters, particularly when public debate focuses on headline costs rather than contingent exposure.

Understanding mega-events requires looking past stadium budgets and tourism forecasts to the legal architecture that determines who absorbs uncertainty when things do not go as planned.

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Conclusion

The Olympic Games reinforce the conclusion drawn from the World Cup context: FIFA’s approach to risk allocation is part of a broader model rather than an isolated strategy.

Tax clauses offer a particularly transparent example of how hosting risk is addressed, but they sit within a wider framework that allocates responsibility for uncertainty to host governments. This framework is rarely visible in public discussions of hosting bids, which tend to focus on projected benefits rather than contingent obligations.

If cities are expected to bear uncertainty as the price of hosting, the question is not whether that trade-off is ever worthwhile. It is whether it is properly understood, transparently debated, and matched by an appropriate degree of control.

Those questions extend well beyond sport. But global sporting events provide a clear place to start.‍

The concept that law does not keep pace with technology is decades-old, as legislators, policymakers and regulators struggle to understand complex and fast-evolving realities, and to pass and implement the necessary oversight measures. The same can also be said of corporate governance, compliance programs, and the informal norms of business standards, ethics and integrity. Moreover, the idea that the rate of technological change is exponential – Moore’s law – implies that technology will not just stay ahead, but that the gap will widen.

Given the increasingly pervasive technological nature of our economy, what does this mean for stakeholders with a vested interest in seeing best conduct in the private sector? Are we bound to face a future where “tech broligarchs” set the rules for how their companies behave and interact with society and government? From data privacy, to employment prospects, to natural resources and more, what recourse do we average citizens have?

These are the types of questions that Andrea Bonime-Blanc wrestles with in her new book, “Governing Pandora: Leading in the Age of Generative AI and Exponential Technology.” Bonime-Blanc, founder and CEO of GEC Risk Advisory, is an attorney and holds a PhD in Political Science, and has advised business, nonprofits and governments on issues of strategy, governance, ethics, compliance, leadership, corporate responsibility, stakeholder accountability and more. She frequently works with organizations on “future-proofing” their risk profiles. I recently had the chance to discuss the book with her and delve into these issues further.

Bonime-Blanc defines the attributes of what she calls "exponential technologies”: velocity, volatility, uncertainty, asymmetry, and interconnectivity. Such attributes raise the risk profile – and the need for responsible governance of – these technologies. While many technologies have these qualities, she focuses on AI and GenAI; biotechnology and synthetic biology; advanced materials; frontier computing; and autonomous systems – technologies that have opened the proverbial “Pandora’s box.” Her book covers a wide range of issues, but for BriberyMatters, we focused on risk management and business integrity.

One topic we probed is a distinction that appears to run through the book: a difference between companies that create cutting-edge technologies and those companies that deploy such technology to advance their business objectives. I asked her whether I correctly interpreted the book as implying that Fortune 100 companies, often outside of the tech sector and with more established governance and risk management cultures, tend to be more responsible in their use of technology than newer firms with a “move fast and break things” culture. Bonime-Blanc agreed, but further noted that certain technology companies, citing Microsoft and Google, have also matured and themselves developed responsible governance practices.

The distinction, she explained, often boils down to the CEO/board of directors relationship. A board must have “at least some institutional check on behavior.” In founder-led and founder-dominated companies,” she told me, governance is shakier. She cites OpenAI's well-publicized governance crisis as one example of how things can go awry. However, in her view, companies building technologies, particularly with AI, should bear greater responsibility, what she calls "first impression" responsibility: to be more accountable to users, to ensure their data is high quality, rigorously tested and not riddled with hallucinations. However, she says, these companies are too often instead focused on “winning” the AI race, no matter the cost.

Bonime-Blanc pointed to another gap in the governance structures of younger technology companies: the ethics and compliance functions are often minimal or folded into the general counsel's role, without real standing in the C-suite. She believes that general counsels need to evolve to be genuine resources for CEOs, boards, and stakeholders in an environment defined by novel and fast-moving risks. Finally, she told me, tech companies need to recruit for their boards differently, drawing in what she described as “empathic polymaths”: systems thinkers who understand technology and its societal impact, and who have the knowledge and personality to push back against their CEOs. In the book, she details the “exponential governance mindset” that companies will need to properly manage the new risk landscape.

We also discussed an interesting historical analogy. Some of today's tech leaders, she suggested, resemble business figures in the pre-FCPA era, operating with a cavalier attitude toward integrity that was prevalent in the corporate sector before that law changed their risk calculus. To that point, I asked her, absent legislative and regulatory leverage, what incentives exist to change the behavior of fast-moving tech firms. After all, internal compliance and good governance are often downstream of regulation.

Bonime-Blanc agreed, and noted that the regulatory environment under the current US administration has moved in the wrong direction. The previous administration was advancing testing standards and auditing principles through executive orders, but the current moment has stripped back oversight, dismissing even industry voices that raise concerns. States are partially filling the vacuum, with California, Colorado, and New York advancing AI-related legislation, and the European Union has introduced greater regulatory controls. She explained that litigation can chip away at the riskiest practices, but was clear that case law can be too slow and reactive. Going forward, she said, a more proactive, safety-oriented federal framework will be needed.  

Despite the scale of the challenges she describes in the book and highlighted when we spoke, Bonime-Blanc is a tech optimist. She not only believes in the transformative power of the technologies she explores in “Governing Pandora” to have a positive impact in the world, but also, she said, in the human capacity to govern that technology responsibly.

When the United States captured Venezuelan President Nicolás Maduro in January 2026 and then Vice President Delcy Rodríguez assumed the role of Acting President, Transparency International called for “restoring democracy… protect[ing] the rights of Venezuelans and address[ing] the country’s entrenched corruption crisis.” In that statement, TI-Venezuela Executive Director Mercedes de Freitas said, “we now need an honest and transparent state that is truly accountable to Venezuelans.” Following Maduro’s removal, the US has eased sanctions, restored diplomatic ties, started to sell Venezuelan oil and is exploring mineral rights. At the same time, as has been widely noted, the prior regime remains largely unchanged.

To learn more about the previous corruption landscape, the current situation in Venezuela, the prospects for truly restoring democracy and what a genuine effort to reduce corruption would entail, I spoke recently with Christi Rangel, Research Coordinator at TI-Venezuela. An economist by training, Rangel began working with TI-Venezuela in 2005, when the organization approached her university research center to collaborate on a local government transparency assessment. She eventually joined TI-Venezuela full-time. Rangel told me that her work covered fiscal transparency issues, some prominent corruption cases, state-owned enterprises – notably Petroleos de Venezuela – and Venezuela's relationships with China and Russia. She also represented TI-Venezuela for the International Budget Partnership's biennial open budget assessments, before Venezuela was excluded from the survey in 2023.

As she explained, the corruption landscape in Venezuela has spanned petty corruption, grand corruption, kleptocracy and state capture, often with a through-line of criminal and armed groups engaging in trafficking drugs, gold and people. At the petty level, she said, small bribes were routine to engage basic government services, such as obtaining a passport, crossing a border, or driving on highways. Political corruption took the form of social programs weaponized to pressure citizens to support the ruling party in a country with widespread poverty. At the level of grand corruption, she noted that Venezuela was deeply engaged in the Odebrecht case, and while the company's CEO testified that Venezuela was the second-largest recipient of its bribes after Brazil, no domestic investigation followed. She told me that 73 cases related to Petroleos de Venezuela have gone uninvestigated in Venezuela, while a further 175 cases involving nearly $73 billion in 30 other countries are linked to Venezuela, including numerous US cases under the FCPA. She described state capture that was deeply enmeshed in the justice, customs and port systems. As a result, she said, a tremendous amount of work is needed.

Rangel did tell me that she sees “a window of opportunity,” and identified several priorities. To truly tackle impunity, she told me, the justice system needs to be overhauled, with a special anti-corruption investigator, independent courts, a new attorney general and stronger oversight bodies. She pointed to needed legal reforms on anti-corruption measures, lobbying, and gifts to public officials. Budget and debt transparency will be essential, as well as introducing a merit-based system to select civil servants. She also stressed the importance of adopting open government principles to better connect citizens and government. In her view, such measures can help attract transparent Western investment while guarding against opaque Chinese and Russian capital. Above all, she told me, new parliamentary elections are needed; however, these are not yet planned. By the same token, she said, “In the last two months, many things have changed. Not as much as people wanted, but transitions take time.”

In terms of how TI-Venezuela will be able to help advance these efforts, Rangel told me that she and her colleagues are still discussing that issue. Previously they were able to operate, albeit with some difficulty, both under Hugo Chávez and Maduro, but gradually the risks increased. When one colleague was briefly detained in 2017, TI-Venezuela began taking more precautions, she shared. As the government stepped up its efforts to restrict civic space around 2020, and after the disputed presidential election of July 2024, the team began to self-censor, and ultimately TI-Venezuela began to work in exile, with the staff dispersing to other countries. Now, she says, while it might not yet be safe, she is watching the situation closely and is cautiously optimistic about the possibilities for a return.

Annual compliance training used to be conducted by sitting down at a desktop with a series of hour-long courses that you had to complete all in one sitting.

But through studies and research, we have found that this is actually an inefficient way to truly learn much of anything.

So, what is the solution? Making training like a classroom.

According to German psychologist Hermann Ebbinghaus, when studying something new to a learner, most of that information is lost within the first day of learning it.

Recall that in grade school lessons were taught in the classroom and then reinforced again with homework that evening. Often teachers would also use Mnemonic devices to help students remember details, like "Please Excuse My Dear Aunt Sally" to recall order of operations in math class, for example.

The same approach should be taken with compliance training.

Some suggestions for the best way to implement such an approach? Use a corporate compliance event, like the one available in the TRACE Compliance Event Toolkit, as a means to also complete compliance training.

Compliance should, ideally, be completed in short intervals, with spaced, repetitive reinforcement. By using a dedicated day (or two!) to speak to compliance, you can allow users to:

• Complete a short training
• Speak to colleagues about what they learned in an office-wide or department-wide discussion
• Discuss learning objectives by developing a Mnemonic device that the whole office can help create and vote on together, then display around the office space
• Complete activities in-person, or through conferencing calling applications to ensure maximum attendance

By working throughout the day to reinforce learning, with short breaks included, the entire office audience should be more focused, retaining more of what was taught, and ensuring higher overall completion by requiring each employee to participate.

So start thinking back to your classroom days, and get started!

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The TRACE team hosts webinars for our membership community throughout the year, and this time of year is always a favorite of mine.

During the first months of the year, the team works with experts in the field of compliance throughout the world to reflect on the past year's anti-corruption enforcement actions, while predicting what could happen in the year ahead.

Each region brings different areas of focus and different expectations of individuals working for an organization. But one element that remained universal throughout each discussion, regardless of location, was compliance as a culture.

Yes, legal experts agree that a robust compliance program should include a thorough risk assessment, due diligence for external parties, policies and procedures, and training on those procedures. This is the bare minimum of what is expected from regulators and enforcement agencies.

Because all of this would be meaningless if leadership does not believe in a compliant workplace.

And regulators will notice. The SFO, for example, states "a key feature of any compliance programme is that it needs to be effective and not simply a 'paper exercise.'" The U.S. DOJ states in its Evaluation of Corporate Compliance Programs that "prosecutors are instructed to probe specifically whether a compliance program is a 'paper program' or one implemented, resourced, reviewed, and revised, as appropriate, in an effective manner." The French AFA has issued guidance on Article 17 of its Sapin II law, indicating that internal controls must be in place to "monitor the implementation of the measures of the anti-corruption system and test their effectiveness." French law even allows for regulators to audit companies regardless of whether they have not committed a crime, with the understanding that an effective compliance program should already be established.

The key takeaway that I left with when each of these webinars concluded: that no matter what area of the world your company operates, compliance must be embedded into how you do business to be effective. And this starts with leadership.

Leadership needs to set an example by allocating the proper resources for a compliance program, then evaluating the program and adjusting it as business needs change. Compliance teams should be established as a part of the culture of a workplace by:

• Having leadership complete training before others in an organization and then encouraging employees to complete training as they have
• Sending language to leadership for email blasts or compliance newsletters that leaders can contribute to on a regular basis
• Leaders knowing details about reporting mechanisms and promoting a culture of speaking up if someone suspects wrongdoing at the organization
• Investing in greater resources for regions of business that are especially high-risk to ensure controls are put in place

If leadership conveys that compliance is an important aspect of the business, that example will permeate throughout the organization.

And even though we cannot always predict the future of compliance enforcement, we can continue to promote best practices for compliant and ethical business.

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In January 2026, former FIFA President Sepp Blatter joined growing calls for fans to boycott matches held in the United States during the 2026 FIFA World Cup. His support reflected broader concerns over U.S. political conduct, immigration policies, and the treatment of migrants and protesters, with critics questioning whether the United States was an appropriate host for a global event intended to unify nations.

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Blatter’s comments raise a familiar question: what role do sports boycotts actually play in global politics, and do they work?

Sport occupies a unique space in modern society. It is at once a commercial enterprise, a cultural institution, and a global spectacle. International competitions such as the World Cup and Olympic Games are among the few events that command truly worldwide audiences. They offer host nations a rare opportunity to project stability, legitimacy, and soft power on a global stage. For that reason, sport has never been entirely separate from politics. Its visibility makes it an attractive vehicle not only for national prestige, but also for protest.

Boycotts operate by targeting that visibility. They do not seek to defeat a nation militarily or economically. Instead, they attempt to undermine the symbolic legitimacy that comes with hosting or participating in global sport. The theory is straightforward: if sport confers prestige, then refusing to participate, or urging others not to, can withdraw that prestige and signal moral condemnation.

The Cold War offered the clearest example of sports boycotts used as geopolitical tools. In 1980, the United States led a boycott of the Moscow Olympics in response to the Soviet invasion of Afghanistan. More than 60 countries ultimately joined, and thousands of athletes were prevented from competing. The boycott sent a powerful symbolic message, but it failed in its primary objective: Soviet forces did not withdraw from Afghanistan as a result. Four years later, the Soviet Union and its allies retaliated by boycotting the 1984 Los Angeles Olympics. The effect was not political resolution, but escalation. The Olympic Games became yet another arena in which superpowers competed for ideological advantage.

If Cold War boycotts revealed the limits of sports as a coercive political tool, the international sporting boycott of apartheid South Africa demonstrated its potential power when combined with broader pressure. For decades, South African teams were excluded from international competitions, including the Olympics and FIFA World Cup. This isolation did not, on its own, dismantle apartheid. But it contributed to a broader regime of economic sanctions, diplomatic pressure, and cultural isolation that gradually eroded the apartheid government’s legitimacy.

Sport, in this context, became one component of a wider strategy to signal that South Africa’s

racial policies placed it outside the international community.

These historical examples reveal an important distinction. Sports boycotts rarely succeed when acting alone. They do not directly alter military realities or political leadership. But they can play a meaningful role in shaping perception, legitimacy, and international reputation—factors that often matter deeply to governments seeking global influence.

Modern sports governance has increasingly shifted from external boycotts to internal exclusion. In recent years, Russian athletes have faced sweeping bans and restrictions from international competition, including the Olympics, following state-linked doping scandals and geopolitical tensions. Rather than rival nations withdrawing in protest, governing bodies themselves imposed sanctions, forcing Russian athletes to compete under neutral flags or excluding them entirely.

This reflects an important evolution in the politics of sport. Participation is no longer treated as unconditional. Instead, it is contingent on compliance with institutional rules and international norms. Where boycotts once relied on collective protest, modern sports governance increasingly relies on centralized enforcement, with sporting bodies themselves acting as arbiters of legitimacy.

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They also raise an uncomfortable question: who actually bears the cost?

In practice, athletes are often the ones most affected. The 1980 Olympic boycott denied thousands of competitors the chance to participate at the highest level, many of whom never had another opportunity. Their careers were shaped not by performance, but by political decisions beyond their control. This tension lies at the heart of sports boycotts. They aim to influence governments, but frequently impose their most immediate consequences on individuals.

Modern sports boycotts have also evolved. Where governments once led formal withdrawals

from competition, today’s boycotts often emerge from fans, activists, and public figures. These efforts are less about preventing events from occurring and more about challenging the narratives that surround them. The goal is reputational rather than operational—to force uncomfortable scrutiny of the political and ethical context in which sporting events take place.

Blatter’s call to boycott the U.S. portion of the 2026 World Cup fits squarely within this tradition. It is unlikely, on its own, to alter the structure of the tournament or prevent matches from taking place. The World Cup is too large, too commercially entrenched, and too globally anticipated to be derailed by symbolic protest alone. But that does not mean such calls are meaningless.

Sports boycotts derive their power less from immediate outcomes than from the conversations they provoke. They challenge the notion that sport exists in a vacuum, separate from political reality. They force governing bodies, host nations, and fans to confront the broader implications of participation. In doing so, they expose a fundamental tension at the heart of global sport: its aspiration to transcend politics, and its unavoidable entanglement within it.

Ultimately, sports boycotts are neither purely effective nor entirely futile. They are limited tools, capable of shaping perception more readily than policy. They rarely compel immediate political change, but they can contribute to longer-term shifts in legitimacy and international pressure.

The calls to boycott the 2026 World Cup serve as a reminder that sport remains one of the

world’s most visible stages—not only for athletic competition, but for political expression. Whether or not such boycotts succeed in achieving their stated goals, they underscore a reality that has persisted for decades.

Sport does not exist outside politics. It reflects it, amplifies it, and, at times, becomes one of its most visible battlegrounds.

In a previous piece in conversation with Severin Wirz, ethics and compliance attorney (and former TRACE staffer) about his book Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act, I covered his telling of the pre-history of the FCPA. In this second of a two-part series, I explore how Wirz thinks the anti-corruption movement should now move forward, particularly following first the FCPA pause, and now the changes in FCPA enforcement.

Wirz is particularly interested in the role that narrative has played in the FCPA story. Wirz explained that the original champions of the law tied the FCPA to geopolitical issues of the day, including winning the Cold War, re-establishing America’s global reputation after Vietnam, and reigning in the power of multinational companies. In the 1990s, Wirz told me, the story was that “removing barriers to entry to emerging markets and fighting corruption would advance human rights, strengthen democracy and promote development.” As greater freedom took root worldwide, we entered what Wirz called an “FCPA heyday" in the early 2010s. “People thought the law was here to stay” and lost focus on long-standing efforts to dismantle the law.

Of late, Wirz pointed out, US leaders have tried to demonstrate to the American people that our interests are threatened by autocracy and kleptocracy, but there has not been an effort to tie the FCPA into that message. He told me that there is a widespread understanding that China is harming both American enterprise and our geopolitical interests, and thus we need to ask, “how can the FCPA be a counterweight?” Moving forward, Wirz said, DOJ priorities cannot be framed around simple moral arguments that “corruption is bad.” Rather, we need to “keep articulating how global corruption negatively affects American national interests.”

In that respect, Wirz told me that looking ahead, he is “bullish about the future of the FCPA as a tool in the US toolbox.” However, he noted – and as his book covers – there have also been “legitimate concerns about colonialism or hegemony” surrounding the choice of cases the US has pursued. As Wirz writes, “critics have wondered whether the United States… has sought not just to level the playing field, but rather to tilt it in its own favor.” Previously, the US could tamp down such complaints, Wirz told me, but if we are perceived to be on shaky ground ourselves, “then it’s just about naked power, and it will be very difficult for the US to moralize about what other countries should do about corruption.”

Moreover, while we need to make sure the FCPA survives, he told me, “it doesn’t need to be the world’s most copied anti-corruption law.” In a multipolar world, he says we should “take comfort in the fact that there are a lot of ways of going about this,” and we should embrace the efforts that various countries are pursuing independently. Harkening back to some of the early FCPA debates recounted in his book, and as mentioned in the previous blog in this series, Wirz told me that while criminal enforcement is one tool, there is growing recognition that “disclosure and transparency laws, and effective beneficial ownership transparency through public registries,” can also be effective.

In the meantime, Wirz told me, he would caution multinationals about making any drastic changes to their overseas conduct. “A prudent CEO,” he told me, “recognizes that there are unknowns about what the next Administration might look like, and given the statute of limitations, companies shouldn’t run around paying bribes.” In Wirz’s view, “companies want predictability, stability and order. Multinationals want to do business overseas, and bribery is still a risk.” But, Wirz said, though companies will not take the FCPA off their radar, what has been termed “FCPA Inc.,” meaning the robust anti-corruption industry of specialized lawyers and consultants that the law helped create, “is probably not coming back in the way it existed before.”

When enforcement of the Foreign Corrupt Practices Act (FCPA) was paused in February 2025, ethics and compliance attorney Severin Wirz, previously with TRACE and now at Applied Materials, was finalizing a 10-year project on the law’s history. His resulting November 2025 book, Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act, truly meets this current moment. In this first of a two-part series from our recent conversation, I examine Wirz’s recounting of the key elements of the FCPA story.

Rather than documenting nearly 40 years of FCPA cases, Wirz told me, he wanted to “set the record straight” about the roots of the law. The prevailing view, Wirz explained, was first, that the impetus for the FCPA was that the SEC uncovered widespread instances of bribery in connection with Watergate, and second, relatedly that the FCPA was a “knee-jerk reaction” to Watergate, as the body politic was consumed with what Vice President Spiro Agnew called in his resignation speech “post-Watergate morality.” But, Wirz told me, that version of events gets “the protagonists and the theory of change wrong.”

Wirz’s book shows that while the SEC did uncover many overseas bribes, the State Department and others often tried to block information from coming to light. Investigative journalists played a critical role in uncovering those stories. Thus, the FCPA’s history is better understood as “bottom-up, not top-down,” he told me. As he writes, “This top-down approach belies the FCPA’s own endogenous beginnings,” helping explain why it has proven difficult to transfer the FCPA to other countries. Additionally, Wirz shows by unearthing the slow process of passing the law, how – far from a quick reaction to Watergate – the FCPA was the product of “much longer geopolitical and anticorruption trends.”

The book explores the lengthy legislative effort that led to the FCPA. As Wirz writes, “passage of the FCPA some fifty years ago was itself without guarantees.” For example, Wirz details the various debates regarding how the law would function in practice. There was much skepticism about a model built on criminalization; many thought that forcing companies to disclose foreign bribes would be a more effective approach. Wirz told me, “No one thought you could actually bring these cases to court and backers of disclosure thought individual countries would bring their own cases in their own courts.” Wirz explained, “It took the signing of deferred prosecution agreements in the 1990s for the criminalization model to work out better than expected.”

The book also details the ways in which pushback against the FCPA began almost as soon as the law was passed, showing how voices ranging from the business community to President Reagan sought to water down the law. The common – and by now familiar – argument was that American firms were overregulated and supposedly at a competitive disadvantage overseas. The book helps the reader understand that the FCPA has always been on more tenuous ground than previously understood. While Wirz could not have known, when he began his research, just how timely his book would prove to be, he told me he had long sensed that the FCPA ground was shifting, and thus we should not have been surprised by the White House’s recent moves.

Global compliance officers today are well aware that ESG risks have been a moving target over the last few years. Global human rights guidance has shifted from jurisdiction to jurisdiction, while regulations addressing environmental and social governance issues have become more difficult to track, depending on your industry sector or business operations.

Global standards, like that of the recent ISO 37001 release, help to create a standard for governance programs across all industries, which is beneficial as a general understanding by both companies and stakeholders as to how business should be done the “right” way. And using those standards can help to better drive the focus for ESG compliance, even at a time of geopolitical uncertainty. Using guidance like that of ISO 37001 on drafting ethical policies, training on those policies, and ensuring alignment from the top of the company C-suite downward are the building blocks for a successful ESG compliance program.

Given the nature of business within the transportation and logistics sector, for example, ESG compliance risks present complexities that include customs and border checkpoints, where there is the potential for document fraud, facilitation payments, bribery demands, and the movement of goods linked to forced labor or human trafficking is significantly elevated. These high-risk environments require strict oversight, transparent procedures, and robust internal controls to ensure all parties uphold ethical standards and prevent exposure to illicit or unethical activity. And this standard should be reinforced and maintained throughout a company’s supply chain.

TRACE offers comprehensive, user-friendly training tools that, through our training platform, play a critical role in addressing ESG compliance risks by enabling organizations to easily develop and assign required courses on key compliance, HR, and ethics topics. Robust reporting and analytics help demonstrate the return on investing in training for employees, while also supporting a sustained commitment to global education and responsible business practices.

Supplementary compliance materials, including mini guides, succinct one-pager overviews, and scenario-based refresher training, can serve as helpful reminders about compliance risks in support of ongoing training efforts.

A decade-long collaboration between TRACE and JAS has led to the successful implementation of an ESG compliance program for one such global multinational organization.

TRACE is a globally recognized non-profit business association dedicated to anti-bribery, compliance, and good governance with members based in every region of the world and operating across more than a dozen industries.

JAS, a leader in the transportation and logistics industry, partnered with TRACE in developing a recurring training plan on the TRACE learning platform. The JAS team, alongside TRACE’s technical specialists, created a program to train employees once they are onboarded with the company. The training is repeated on a regular cadence to reinforce important messaging on forced labor risks, anti-bribery and corruption risks, unethical gift-giving, and more. Alexandra Addison, President and Founder of TRACE International, notes JAS’s commitment to operating with integrity:

"As a member of TRACE for almost a decade, JAS has been a proactive and committed partner in the fight against corrupt practices and in advancing a more sustainable and equitable world. We are proud to see a TRACE member whose accomplishments consistently reinforce the importance of strong governance, ethical conduct, and environmental and social responsibility as foundational standards in today’s work environment."

TRACE training supports JAS’s efforts; it complements wider actions, including policy development, supplier engagement, compliance oversight, and alignment with international standards.

These trainings form an integral part of JAS’s ESG governance framework and contributed to the company’s achievement of an EcoVadis Gold rating.

The TRACE team offers benefits to help elevate any organization within any industry to raise their compliance and governance standards, to achieve a reputation for doing the right thing, and to maintain a well-trained and knowledgeable workforce.

In December 2025, I wrote about my discussion with Daniel Haberly, an expert in illicit financial flows based at the University of Sussex Centre for the Study of Corruption (CSC), regarding how to map the networks that facilitate flows of corrupt funds around the world. In this second piece from our conversation, I drill down into his 2023 paper Corruption, Shell Companies, and Financial Secrecy: Providing an Evidence Base for Anti-Corruption Policy, which is based on Haberly’s (and others’) research. The paper was written under the Governance & Integrity Anti-Corruption Evidence (GI ACE) program, hosted by the CSC and funded by the UK’s Foreign, Commonwealth & Development Office.

Given my background in international development, including working on programs to advance anti-corruption through policy reform, I was specifically curious about one of Haberly’s findings, namely: “Good governance reforms may have the unintended consequence of increasing corrupt capital flows.” In fact, Haberly explained, there are a number of “paradoxes,” as he termed them, revealed by his work. Does this mean that donor-funded projects supporting governance reforms should be reconceived? Such programs were a major part of USAID’s portfolio; if the US were to reinvest in international development in the future, how should his findings inform the work? The important insight, Haberly shares, is that not all countries have the same track record, and so reform assistance should not be cookie-cutter.

One mechanism through which these unintended consequences play out is the formation of shell companies, particularly by actors in countries with high levels of corruption or a history of communist rule. When these countries undergo reforms towards economic liberalization, there is frequently a push to improve the rule of law first, focusing on investor protections and property rights. Paradoxically, these types of basic institutional strengthening reforms actually seem to lead to a spike in the formation of offshore companies—potentially reflecting a catch-22 of institutional reform in countries where existing institutions are weak, and thus unable to constrain insider abuse of the reform process itself. Reinforcing this idea, Haberly says, is the fact that the link between rule of law and property rights reforms and shell company formation is not observed in countries with historically lower levels of corruption and without a communist past. In such countries, reforms to the basic legal institutional framework do not seem to trigger any changes in shell company formation, as compared to its long-term baseline.

The links between state sector size and privatization reforms regarding offshore company formation also appear to be counterintuitive. As has been documented, poorly managed privatizations in former communist countries have often created opportunities for illicit wealth transfers and capital flight. However, the link between privatizations and shell company formation, in former communist countries, seems to be weaker than the impact of basic legal institutional reforms. Meanwhile, in countries with no history of communism, regardless of corruption level, a larger state sector actually seems to be associated with more shell company formation, with shell company formation seeming to decrease during privatization. This appears to reflect the fact that the size of the state sector, in countries without a communist past, is mainly linked to the share of mineral rents in the economy, rather than processes of institutional restructuring. In countries with no history of communism, the state sector seems to act as a pathway for the offshoring of mineral rents, with corruption apparently only impacting the way that this offshoring happens, which can run the gamut from anything from well-managed sovereign wealth fund investment to wholesale kleptocratic theft.

The implications for anticorruption practitioners working in developing and transition economy contexts, Haberly said, are “to be careful what you’re advocating for when you talk about good governance.” He cautions against advocating for a fixed package of reforms that do not take context into account, but instead “taking a pair of tweezers to what kinds of reform you’re advocating.” For example, he notes, basic legal and other institutional reforms, which are beneficial from a long-term standpoint, might be tied to the introduction of short-term capital controls to help stem the reform-linked offshoring of wealth, with international donor organizations such as the IMF potentially providing external capacity support, though Haberly says, such an approach does not “fit neatly into a particularly ideological framework.” Of course, when countries are going through a reform process, typically multiple bilateral and multilateral donor agencies are engaged. Donors would need to agree and coordinate which reforms to support and which to hold back, and as those who have worked in the sector know, donor coordination is extremely difficult, even in the best of circumstances.

On January 13, 2026, the Supreme Court heard oral arguments on whether Idaho and West Virginia can ban transgender athletes from women’s school sports teams. While the Court will address whether such bans discriminate based on sex in violation of Title IX and the Fourteenth Amendment, the Department of Health & Human Services (HHS) isn’t waiting for an answer. It is already enforcing Title IX as requiring such bans, threatening over $300 billion in federal grants to coerce compliance.

On the same day as the oral arguments, twelve states (New York, California, Illinois, Minnesota, Rhode Island, Oregon, Colorado, Delaware, Michigan, Nevada, Vermont, and Washington) filed suit challenging this enforcement. Their case confronts a constitutional issue broader than the one before the Supreme Court: whether any administration can deploy federal funding to compel compliance with executive policy that conflicts with state law.

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The Title IX Certification Trap

Since October 1, 2025, HHS requires anyone receiving federal grants to certify they comply with Title IX, including the requirements of Executive Order 14168. By defining sex based on reproductive biology at birth, the order effectively mandates exclusion of transgender individuals from programs and facilities aligned with their gender identity.

But the policy’s reach extends far beyond transgender athletes’ rights. The Title IX certification requirement applies not just to Title IX-related programs but to over $300 billion in annual HHS grants spanning healthcare, child welfare, scientific research, and more. If funding is frozen, many will suffer the impacts.

States with trans-inclusive policies are placed in an impossible position. They must choose to either 1) certify and violate their state laws prohibiting discrimination based on gender identity; 2) refuse to certify and immediately lose billions in federal funding; or 3) falsely certify (by maintaining transgender-inclusive policies while claiming compliance) and face the threat of False Claims Act liability and criminal prosecution for making false statements to the federal government.

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The False Claims Act Compounds the Financial Coercion

The False Claims Act, proclaimed by the DOJ as the primary weapon of its newly created Civil Rights Fraud Initiative, amplifies the financial peril facing institutions. The loss of frozen funds is exacerbated by the sums potentially payable in damages and penalties. Under the FCA, the federal government can extract damages of up to three times the value of every federal grant received. Additionally, the certification requirement applies retroactively to grants already received before the policy even took effect. When frozen funds, FCA liability, and the costs of litigation converge, institutional collapse becomes inevitable.

Worse still, the threat of bankruptcy becomes ever-present under the FCA’s qui tam provision, which allows private whistleblowers to sue on behalf of the government.[1] This provision entitles whistleblowers to receive up to 30% of the recovery, which could amount to millions in payouts. By financially incentivizing private citizens to provide continuous surveillance, the FCA allows the government to reap the benefits of enforcement without bearing its costs.

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Enforcement Continues In Spite of Court Blocks

Three federal courts have already issued temporary blocks, finding the certification requirement likely violates separation of powers (by amending a statute via executive order without congressional authorization), violates the Tenth Amendment (by using existential funding threats to compel state cooperation), and bypasses rule-making requirements (by imposing rules without notice or opportunity for comment).

Despite these rulings, HHS continues enforcement against institutions not covered by those specific court orders.

The current reality demonstrates the effectiveness of this strategy. In July 2025, the University of Pennsylvania agreed to ban transgender athletes to restore $175 million in federal funding. Education Secretary Linda McMahon, speaking on the steps of the Supreme Court while oral arguments on transgender athlete bans were heard inside, declared that UPenn’s settlement “set the tone for all other educational institutions.”  

Her remarks indicated the strategy’s enforcement power: when the financial stakes are high enough, institutions will choose compliance over litigation, regardless of the underlying legality.

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The Constitutional Stakes

The twelve-state lawsuit therefore challenges not merely the policies affecting transgender athletes, but the entire enforcement structure that would permit executive orders to govern through financial coercion rather than legislation.

If successful, the lawsuit would establish essential limits on executive power, with consequences reaching far beyond sports into every domain where federal funding might be weaponized to implement policy without congressional authorization.

But if this enforcement mechanism survives constitutional challenge, future administrations of any political orientation will possess a structure for imposing sweeping policy changes across healthcare, education, research, and civil rights through executive order alone, rendering both congressional authority and state sovereignty effectively meaningless wherever institutions depend on federal funding.

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[1] In September 2024, a Florida federal court ruled in U.S. ex rel. Zafirov v. Florida Medical Associates, LLC that the FCA’s qui tam provision is unconstitutional. This issue now appears headed to the Supreme Court.

For more than two decades, TRACE has brought compliance and risk professionals together for a two-day gathering where members hear directly from enforcement agencies, compliance experts and each other, share best practices, discuss emerging compliance challenges, benchmark with their peers, and stay on top of the latest regulatory developments and enforcement trends worldwide.

The first forum took place at the Hay Adams in 2002 in Washington, D.C. In 2017, TRACE introduced a second forum in London for members operating in the UK and Europe. In 2020, when in-person gatherings weren’t possible due to the COVID-19 pandemic, TRACE hosted its first virtual forum, to continue to provide members with insight and opportunities to connect. Over the years, TRACE Forums have featured hundreds of distinguished speakers, including senior officials from the U.S. Securities and Exchange Commission and Department of Justice, senior compliance executives, and independent anti-corruption and governance experts.

This year’s London Forum, taking place 13–14 May at the Sheraton Grand London Park Lane, will open with a keynote address by Emma Luxton, Director of Operations at the UK Serious Fraud Office (SFO), during a welcome reception on Wednesday, 13 May. The reception will be followed by a full day of sessions with leading compliance and enforcement experts, sharing timely insights and practical perspectives.

TRACE Forums are a valued TRACE multinational corporate (MNC) membership benefit. Registration is complimentary for TRACE MNC members*, and spots are limited. More details and registration information can be found here.

Interested in learning more about TRACE’s multinational corporate (MNC) membership, small medium enterprise (SME) membership, or our award-winning eLearning? Visit www.TRACEinternational.org.

* Complimentary attendance to TRACE events is one of the many benefits of TRACE Multinational Corporate (MNC) membership. Each TRACE MNC member company is initially permitted to send one representative at no charge to the TRACE Forum. Each TRACE Enterprise level corporate member is allowed two (2) corporate representatives at the Forum. One (1) additional representative may be added to our waitlist.

Training can often seem like the dreaded task to complete at the end of the year and avoid for the rest of the year.

But training can, and should, be a way to improve and move forward within an employee's lifecycle and should be seen not as a burden, but as an opportunity.

These next few paragraphs will share insights and tips in to how to create training programs that can guide learners to new skillsets and generate new ideas, making training a part of the culture and mindset within your organization.

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Training with Intention

Instead of merely "checking the box" of what is required by regulators to ensure that your organization is compliant with local laws, think about the importance of the topic that you are training on. Why would this matter to your training audience? Why is it of such importance that it is a requirement by law? Use that information to your advantage!

If training is required on human rights, for example, make sure to include information on the areas where you do business so that your training audience does not assume this is some lofty training that does not apply to their locale or department. Share real cases and stories that have affected your industry, or where your headquarters or subsidiary offices are located to convey to your learners that human rights issues can happen anywhere, and that training is done to learn how to combat human rights abuses. Make training matter more than simply meeting arbitrary criteria.

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Training for a Purpose

Training is also a way that employees learn new skills. If training is presented as a way to improve, chances are that training will be seen differently and taken more seriously. In a recent study by McKinsey & Company, only 12% of trainees have found that training offered them a new skillset. Leaders need to change that way of thinking. Technology, for example, has become a necessary part of the workplace, but has also opened up risk exposure for bad actors to use technology as a means to weaponize data. Training on cybersecurity can teach employees the most important skills to keep company data safe. Give a learner access to cybersecurity training to increase their awareness about cyber-attacks, then allow learners to expand on that subject further. Offer training or guidance on data protection laws, even AI, and a learner could grow their skillset to a proficiency in data that they could use to elevate to the next level of the business. The organization will improve with the knowledge gained by its employees.

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Training as a Collaboration

Training can be one of the few outlets that allow employees to speak directly to leadership and offer beneficial critiques and feedback. Use surveys and post-training calls and interviews with employees to hear their candid thoughts about how a course was received. Did it convey the message it should? Did the trainees learn anything new? What could have been better about the training? By compiling survey data and then doing something based on the feedback given, a level of trust is earned by the learners, and an added layer of investment in the course, knowing that they assisted in improving the content. Consider even catering surveys to employees based on their role within the company, allowing them to show their expertise and take the survey or interview more seriously.

Surveys also help to correlate areas where messaging might have failed back to training results. If every learner is answering one set of quiz questions incorrectly, it may be that the section of the content is confusing, or presented in a way that does not maximize retention. Use surveys to allow learners to share what may have been difficult subject matter in the training content and you'll be able to create more effective courses.

With all of these tools in mind, learning can become a part of an employee's remit that they want to commit to, as opposed to an obligation. Here's to trying these new concepts in the new year!

When a city is selected to host the FIFA World Cup, the announcement is framed as a civic triumph. Officials point to global visibility, tourism, and long-term economic benefits. Renderings of upgraded stadiums and revitalized neighbourhoods are flashed to the media. The message is clear: hosting is an investment; the payoff will follow.

Public debate tends to focus on the most visible costs – new venues, transit upgrades, or short-term security spending. Less attention is paid to the legal architecture that underpins the event itself – the contracts that quietly determine who will bear the financial risk when costs rise, revenues disappoint, or obligations expand beyond what was originally anticipated.

Many believe that FIFA avoids local costs through clever corporate structuring, by setting up non-profit entities in host countries that allow it to sidestep taxation. That story is appealing in its simplicity, but it turns out to be incomplete. The more consequential mechanism is not the legal form of FIFA’s local entities, but the contractual allocation of risk embedded in hosting agreements with cities and governments.

One clause in particular illustrates this dynamic with unusual clarity. Buried in the fine print of host city agreements is a provision that, in plain terms, requires host cities to absorb municipal taxes imposed in connection with the tournament; even where those taxes are legally assessed against FIFA or its subsidiaries. The result is a subtle but powerful shift: statutory liability may formally attach to FIFA-related entities, but the economic burden is transferred to the local public sector.

Tax is only one example. But it is a clean, documented case study of a broader pattern. One in which downside risk is localized, while control over the event remains centralized. Understanding that distinction is essential to understanding what cities actually agree to when they bid to host the world’s biggest sporting event.

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The Myth of the Non-Profit

Ask how FIFA avoids local costs, and the familiar explanation often comes up, that it sets up non-profit entities in host-countries, and non-profits don’t pay tax. The implication is that the financial burden of hosting is reduced through corporate form; that FIFA avoids local obligations by choosing the right legal vehicle. There is a bit of truth in this account, but it obscures more than it explains.

The absence of a uniform structure matters. If non-profit status were the primary tool for avoiding local costs, one would expect to see the same approach replicated across jurisdictions. Instead, what emerges is a patchwork of legal forms producing remarkably similar outcomes.

More importantly, non-profit status doesn’t accomplish what most people assume it does. In most jurisdictions, non-profits are not automatically exempt from all taxes. They may still be subject to income tax on certain activities, indirect taxes, payroll taxes, and other obligations depending on how they operate. The legal label alone does not determine ultimately who bears the cost.

Focusing on entity form misses the real story. The consistent feature across host countries is not how FIFA incorporates locally, but how hosting agreements allocate financial risk. To see that clearly, you have to look beyond corporate registries and into the contracts that govern the relationship between FIFA and host cities themselves.

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The Clause That Makes Cities Pay

The mechanics of risk transfer become clearest in the provisions of host city agreements dealing with taxation. These clauses do not announce themselves as extraordinary. They are framed as technical, administrative terms – easy to skim past in a document hundreds of pages long, but their effect is significant.

In essence, host cities agree that any municipal taxes arising “directly or indirectly” from the World Cup will be borne by the city itself. This applies even where those taxes are legally imposed on FIFA or its local subsidiaries. If FIFA is required to pay such a tax in the first instance, the city must reimburse it. If a tax authority seeks payment, the city must indemnify FIFA against the cost.

The distinction here is subtle but crucial. Tax law determines who is legally liable to pay a tax. Contracts determine who ultimately bears the cost. Host city agreements deliberately separate the two. While statutory liability may attach to FIFA-related entities under local law, the agreement reallocates the economic burden to the host city.

The structure is not accidental. It is an explicit allocation of risk negotiated in advance. FIFA does not need to be exempt from municipal taxation to be protected from it. The protection comes from the city’s contractual promise to absorb the cost.

Once understood in these terms, the focus on corporate form starts to look misplaced. Whether FIFA operates locally through a non-profit, a standard subsidiary, or another legal vehicle, the financial outcome at the municipal level is largely the same. The downside risk is transferred to the local public authority as part of the price of hosting.

And tax, importantly, is only the most visible example of this approach.

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Tax is a Clear Example, but Not the Only One

Municipal tax allocation is a useful place to start because it is concrete. Taxes are quantifiable, unavoidable, and documented in black & white contractual language. There is little room for interpretation.

But tax is only a case study. The same logic – allocating downside risk to the local public sector while preserving FIFA’s operational control – appears throughout the broader hosting framework.

Consider security. Host cities and national governments are typically responsible for policing, crowd control, emergency services, and public safety measures tied to the event. These costs are inherently uncertain and difficult to cap in advance. When requirements expand, as they often do, the financial exposure remains local.

Infrastructure obligations follow a similar pattern. Cities commit to delivering stadiums, transport upgrades, and surrounding facilities on FIFA’s timeline and to FIFA’s specifications. Cost overruns, construction delays, and long-term maintenance obligations sit squarely with local authorities, even though the infrastructure is built to serve a global event over which they have limited control.

Legal and political risk is also localized. Disruptions, labour disputes, public backlash, or unforeseen regulatory hurdles are managed by host governments, not FIFA. When expectations are not met, whether financial, logistical, or social, the consequences are borne by local officials accountable to voters.

Tax stands out because the mechanism is explicit and easy to trace. But it is representative of a broader design principle. Hosting agreements are structured so the most unpredictable costs, the ones that carry genuine downside risk, are absorbed by host cities and governments, while FIFA retains discretion over how the event is delivered.

Seen this way, the tax clause is not an anomaly. It is a window into how risk is distributed across the entire World Cup project.

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Risk Without Control: The Structural Imbalance

Once municipal tax allocation is understood as a form of risk transfer, a broader pattern comes into focus. The World Cup is not structured so that risk and control travel together. They are deliberately separated.

FIFA retains control over the competition’s core elements. It sets the technical requirements, determines timeliness, approves venues, and reserves broad discretion over how the event is staged. These decisions shape the scale, complexity, and cost of hosting, but they are not made by the cities that bear the financial consequences when plans change or expand.

Host cities, by contrast, assume responsibility for outcomes they do not fully control. They commit to delivering infrastructure, security, and public services to standards defined elsewhere. When costs increase, as they often do, the exposure remains local. The same goes with changing timelines, cities absorb the pressure. When projections fail to materialize, local governments answer for the shortfall.

The imbalance is not limited to finances. Political and reputational risk also sits with host governments. Public backlash over spending, displacement, or unmet promises is directed at city officials and national authorities, not at FIFA. Legal disputes, regulatory hurdles, and emergency responses are similarly managed at the local level, even though they arise from the demands of a global event.

The result is a hosting model in which cities carry the downside risk of uncertainty, while FIFA maintains centralized authority over delivery. Municipal tax indemnities are simply one of the clearest examples of that model. They show, in contractual form, how responsibility of unpredictable costs is pushed outward, away from the organization that designs the event and toward the communities that host it.

Understanding this structure matters because it reframes the questions cities should be asking. The issue is not whether hosting generates benefits in the abstract. It is whether the allocation of risk is proportionate to the degree of control cities actually retain.

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One Clause, Bigger Questions

The World Cup is celebrated as a partnership between FIFA and host cities. In practice, it is a carefully structured lop-sided allocation of responsibility.

Municipal tax indemnities offer a rare, transparent glimpse into how that allocation works. They show that FIFA does not need to be formally exempt from local taxes to be insulated from their cost. Protection comes instead from contracts that shift economic burden onto host cities as a condition of hosting.

Cities are not misled or coerced. Host governments enter these agreements knowingly, motivated by prestige, political incentives, and the hope of long-term benefit. But the trade-offs are rarely discussed in public forums. Risk is treated as an administrative detail, even though it shapes the true cost of hosting far more than headline numbers ever do.

Tax is one clause in a much larger agreement, but it raises questions that extend well beyond the World Cup. If cities are expected to absorb the downside of uncertainty, what level of control can they reasonably demand in return? What risks are reasonable to socialize, and what should remain with the organization that designs the event?

In July, federal prosecutors secured a significant appellate victory affirming their power to prosecute foreign commercial bribery worldwide. Yet when defendants Hernán Lopez and Full Play Group petitioned for Supreme Court review, the DOJ reversed course, abandoning both the case and the precedent it had just won.

The extraordinary reversal creates uncertainty not only for related FIFA corruption cases, but for the enforcement of overseas private-sector bribery more broadly.

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Honest Services Fraud Reaches Overseas

At the heart of the Lopez case lay a fundamental question: Could U.S. prosecutors charge foreign soccer executives with depriving their employers of “honest services”? The honest services wire fraud statute is typically used to prosecute U.S. government officials for accepting bribes. Lopez, however, involved private-sector employees of foreign organizations.

The Second Circuit emphatically said yes, holding that U.S. prosecutors could charge bribery anywhere in the world through the honest services fraud statute, provided that U.S. banking systems or telecommunications carried out the scheme.

The implications threatened to reshape international enforcement. Foreign banks routinely depend on U.S. correspondent banks to transfer funds; emails often route through American servers even when both parties are overseas. This technical reality gave U.S. prosecutors extraordinary extraterritorial reach over private-sector corruption.

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The DOJ’s Dismissal Raises Questions

Yet when the defendants escalated the stakes by filing for Supreme Court review, the DOJ responded unexpectedly: it asked the Court to void the Second Circuit ruling.

The DOJ perhaps feared an unfavorable ruling that would exclude overseas bribery from the statute’s scope entirely. The Supreme Court has narrowed fraud and bribery statutes in recent years, limiting honest services fraud to clear-cut bribes and kickbacks. Perhaps rather than risk dismantling the prosecutorial tool, the DOJ instead chose to sacrifice the FIFA precedent.

Regardless, the timeline raised eyebrows. On December 9, Brooklyn prosecutors filed to dismiss the charges, just four days after Trump received the inaugural FIFA Peace Prize on December 5. On December 19, Bloomberg Law revealed that Solicitor General John Sauer had directed Brooklyn chief prosecutor Joseph Nocella to file the dismissal, in spite of Nocella’s objections. Publicly, the DOJ cited the administration’s shift in enforcement priorities.

For Lopez and Full Play, the dismissal erased convictions that threatened decades in prison and millions in penalties. But the relief may ripple through other FIFA-related cases, triggering a cascade of appeals from defendants seeking to overturn their own convictions and recover millions in penalties.

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The Enforcement Gap: Implications for Private Companies Operating Overseas

The broader question remains: what happens to future cases? Will the Second Circuit’s reasoning be revived, or has this enforcement approach been abandoned?

Honest services fraud was the only federal law that could reach foreign commercial bribery based solely on an employment relationship and the use of U.S. wires. The other tools that enable the DOJ to prosecute bribery cases have significant limitations:

• The Foreign Corrupt Practices Act targets only foreign government officials, leaving purely private-sector bribery beyond its scope.
• The Travel Act demands an underlying violation of state commercial bribery law.
• Money laundering statutes require a predicate offense.
• Securities laws reach only public companies and their officers.

Where no relevant state or foreign law criminalizes commercial bribery committed by a private company’s foreign employee, the honest services fraud statute filled the gap. That prosecutorial avenue is now uncertain.

Unless Congress explicitly confirms the law’s extraterritorial reach or the DOJ reprioritizes this enforcement area, the enforcement landscape will remain murky for private companies operating internationally. Despite this uncertainty, the underlying risks and harms of foreign commercial bribery remain very real.

The bribery of soccer officials cost soccer confederations millions in lost revenue due to the lack of competition these bribes were designed to ensure. To avoid similar harms, companies need to train their employees on the complex patchwork of state and foreign, civil and criminal laws regulating commercial bribery, and ensure that their codes of conduct explicitly prohibit corrupt practices both domestically and abroad.

In surrendering the signature precedent established by Lopez, the DOJ invoked only “the interests of justice” as its justification. The irony is difficult to ignore.

If these words signal to corporate wrongdoers worldwide that foreign commercial bribery enforcement has collapsed, the cost will not be measured in legal precedents alone, but also in the millions siphoned from legitimate business competition, the erosion of trust in business relationships, and the loss of faith in the rule of law.

The International Anti-Corruption Academy (IACA) was founded in 2010 in Vienna, Austria, to provide anti-corruption education and training to professionals and practitioners, advance new research in the field, serve as a platform for dialogue and networking among specialists, and develop anti-corruption strategies and guidelines. At the end of November 2025, Drago Kos, one of IACA’s lecturers and previously Chair of the OECD’s Working Group on Bribery, was appointed as the Academy’s new Interim Dean, to follow Slagjana Taseva. Kos spoke recently with BriberyMatters about his vision for IACA’s future.

One issue that Kos would like to tackle is a lack of sufficient funding for IACA. He would like to augment the steady inflow of funds for training programs and voluntary contributions by introducing minimum fees for the 78 governments and four international organizations that make up the Academy’s membership. Kos plans a program of extensive outreach to a range of other international organizations and governments to implement this idea.

Next, Kos wants to improve IACA’s curriculum. He explained that currently IACA offers two core Master’s degrees – in anti-corruption studies and in compliance and collective action – as well as a Certificate in collective action, and runs training programs for governments’ anti-corruption agencies and private corporations. Kos would like the IACA faculty and renowned international experts to review those programs to better target current challenges, which include the risks and anti-corruption opportunities stemming from machine learning and artificial intelligence, and the new landscape for anti-corruption policy and practice driven by political changes in some countries.

As Kos explains, without the US spearheading the fight, there is a risk that other countries may backslide. He says the US provided both a positive model to follow, by encouraging ethical business conduct, and the “stick” of FCPA enforcement. As Kos puts it, “The most important link is now missing, and others need to step up, and we have to do it collectively.” He feels that over the past year, “what used to be abnormal is now considered normal.” To resist that trend, he thinks IACA can advance stronger national legal instruments, international cooperation, and rigorous enforcement. Kos has his eye on geographic expansion, and particularly on engaging more with the Gulf, Latin America, Africa and Asia. He notes that IACA already has over 7,000 alumni from around the world, but he would like to establish branches offering the same programming as in Vienna, allowing more students to participate and generating a multiplier effect.

Kos also wants to introduce at IACA, in addition to training for government officials, civil society leaders and students, a greater focus on private sector education. Kos plans to roll out ethics, integrity and anti-corruption training for CEOs and corporate boards. As he says, “We won’t make them specialists, but they will learn to center integrity in their daily work, responsibilities and duties.” In particular, Kos is eyeing the US business community, noting that the law enforcement agencies of some countries “are currently on high alert when their companies do business with US companies.” Kos feels he is well-positioned to drive this evolution of IACA’s relationship with the business community, given, as he put it, that he is “a practitioner currently serving as an academic.” While IACA will remain grounded in its academic function, he feels that “theory is not enough if it doesn’t turn into practical achievement.” Kos is already reaching out to major multinational corporations to attract these potential new types of students.

Kos closed his discussion with BriberyMatters by turning to some of the bright spots he sees, notwithstanding the current state of affairs. As he notes, “We still have the FCPA, enforcement might come back, and we also have international standards that have not changed.” He is heartened by the new joint British, French and Swiss International Anti-Corruption Prosecutorial Taskforce. He notes that many countries have extended their jurisdictional reach on anti-corruption, which could provide avenues to deal with cases in which a US official or company is implicated in bribery allegations, if the US is unwilling to act. He is glad to see governments in Asia, Africa and the Gulf expressing more interest in fighting corruption and closing the gap with the West. In his view, IACA, with its focus on practical training, can play an important role in that process. “We can’t afford to lose anything more in the anti-corruption fight,” Kos says. “There is always a time for academics, but the important time for expert practitioners is now.”

Estimating the global volume of illicit financial flows stemming from tax evasion, money laundering, terrorist financing, financial fraud, and corruption is an inexact science. The UN once estimated that 2-5% of global GDP, or $800 billion - $2 trillion is laundered annually; in 2018, the IMF offered a range of $1.6-4 trillion; in January 2024, Nasdaq gave an estimate of $3.1 trillion. There are experts hard at work on this question, critically mapping how exactly the funds move, and through which channels, countries and banks.  

One such expert is Daniel Haberly, an Associate Professor in Human Geography at the School of Global Studies at the University of Sussex and affiliated with the university’s Centre for the Study of Corruption (CSC). With a background in economic geography, his study of the world’s financial architecture led to an interest in gaps in financial regulation, offshore banking, and then money laundering, financial crime and corruption. In this two-part series, I cover our recent conversation about some of the key anti-corruption dimensions of Haberly’s work.

In his 2025 paper From London to Dubai-Kong: Mapping Geographic Shifts in US Sanctioned Global Financial Networks, 1980-2024, Haberly details how geopolitics and sanctions, notably against Russia and Iran, has not decreased illicit financial flows, but has moved the nexus of that activity. After the 2006 UN Security Council and subsequent US secondary sanctions, Iran pivoted away from Europe – in particular, London – as its main international business hub outside the Middle East, towards Hong Kong, while also remaining rooted in Dubai, long one of Iran’s main regional centers. Russia followed suit after sanctions stemming from the 2014 invasion and annexation of Crimea. At the same time, as Haberly wrote in his 2024 paper A New World Map of 30 Years of Financial Secrecy and Anti-Money Laundering Reforms, covering the AML and financial secrecy landscape detailed in the Regulation of Illicit Financial Flows (RIFF) dataset, funds from corruption not linked to geopolitical factors have “shown no apparent tendency to abandon Western financial centers.”

Haberly told me that his next project is to build on his 2024 paper on foreign direct investment (FDI). Haberly described FDI as a “black box,” with “two-thirds going in and out of offshore destinations with no apparent connection to its country of origin.” Haberly thinks there is a “massive amount of round tripping, in both developed and developing countries,” and that the “US might be the second largest foreign investor in itself.” Inside that black box, he thinks, is likely large amounts of tax avoidance and other forms of arbitrage, but to understand whether that can be separated from corrupt or other criminal flows, he says, “You really have to go through it company by company.”

To that end, Haberly told me, the most important tool for countering illicit flows, including those connected to corruption, is beneficial ownership transparency (BOT). He says that the UK’s registry illustrates the importance of public BOT, calling it “the most open, easy to use, and Google-integrated.” He notes, “The openness of data at least partially compensates for poor government verification of data,” allowing civil society organizations, journalists, and bloggers to identify suspicious financial flows.

From that point of view, I asked Haberly his view of weakened BOT transparency in the US. He says that those recent changes will “reinforce the tendency for the US to be one of the most opaque remaining secrecy jurisdictions.” Haberly told me that in terms of setting up companies to shelter money acquired through corrupt means, inasmuch as that money is not tied to geopolitical rivals or subject to sanctions, the US is one of the world's leading jurisdictions, pointing to states such as Delaware, Florida, South Dakota, Wyoming and Nevada. He called the US the “last remaining developed country without a beneficial ownership framework.”

Those challenges for the US go broader still. In From Secrecy to Scrutiny: A New Map of Illicit Global Financial Networks and Regulation, written with Georgia Garrod and Robert Barrington, Haberly notes that the US “has also refused to adopt the Common Reporting Standard, a global framework for exchanging financial account information between countries to combat tax evasion that has been adopted by all other major developed economies. That paper also covers a dataset on the impact of the FCPA on the movement of illicit funds and reveals that corruption-linked banking seems to be moving from Switzerland to the US. How recent changes in FCPA enforcement might impact that apparent trend remains to be seen.

It is cliche to say that artificial intelligence will impact nearly every industry, bringing changes both predictable and not. The question of how AI is affecting the anticorruption space has been covered by BriberyMatters, including these pieces on learning; these on the opportunities and risks of using AI in compliance programs; and several of my own touching on how AI intersects with procurement reform and the importance of data reliability. To continue this theme, I wanted to explore the role that AI can play in large-scale corruption investigations. Can AI be a reliable tool for investigators? How can AI be mobilized without sacrificing human judgement and expertise? What are the best applications of AI in such investigations?

To explore these questions, I spoke recently with Elisar Nurmagambet, an entrepreneur with deep AI expertise and professional experience tackling issues such as AML, financial crimes, KYC and counterparty risk for banks, sanctions evasion, shell company formation, databases and registries, the misuse of COVID-19 PPP loans, and more. One of the platforms his team designed was used by the UN to train international financial intelligence units to investigate corruption. Now, Nurmagambet runs Tesari, a company that aims to tap into the capabilities of AI to supercharge anticorruption investigations while still centering human judgment and expertise.

In Nurmagambet’s view, the appropriate role for AI is to be a “copilot, not an autopilot,” an approach known as “human in the loop.” He believes that AI should be a tool to augment, not replace, skilled and experienced human corruption investigators, journalists, expert witnesses, regulators and due diligence specialists. He explains that AI can significantly accelerate raw data collection, scraping thousands of databases, entity information, articles and other types of Open Source Intelligence (OSINT) in hours to find information about companies or individuals – work that would take a human weeks or months. This data creates a map or starting point that an investigator must then analyze and research more deeply. As Nurmagambet says, the investigator retains “control of every link.”

Nurmagambet also shared his perspective about why traditional corruption investigators need to embrace AI. As he put it, the current decade has given rise to the “most complex threat landscape in history,” with a polarized media landscape, disinformation and propaganda. Adversarial, corrupt and criminal actors, including sovereign states, he says, are taking advantage of those circumstances to augment their efforts to evade financial controls and sanctions. They are also weaponizing AI through deepfakes, impersonation attacks, social engineering and more. These AI-enabled threats can be undetectable for most users. Only the investigator trained to use those same tools can make better sense of the information, for example to judge whether a purported source is propaganda or disinformation.

Nurmagambet also shared his skepticism about one way in which AI is being marketed in the anticorruption space: what he terms “one-click comprehensive investigative reports” as a form of due diligence. The sales pitch is often made to corporate managers, based on cost savings, staff reductions and efficiency, rather than to legal departments. He feels such tools put clients at risk, particularly if they lack deep anticorruption investigative experience. Those risks, he says, “don’t outweigh the cost savings,” explaining that “decisions made based on faulty information do not stand up to evidentiary standards.” Comprehensive screening, he stresses, cannot be fully automated, as automated screens can generate false positives or miss pertinent information.

In sum, even as an AI expert himself, Nurmagambet has a deep respect for human instincts, judgement, integrity, decision making, and the power of the human analytical mind, particularly in the realm of countering corruption and financial crime. Even when AI reaches the level of “superintelligence,” he says, it cannot replace humans who “live and breathe” these issues, who understand concepts like chain of custody and evidentiary standards, and can interpret data and set aside bias to “follow the truth where it leads.” Given the wide range of threats posed by corruption in the global economy and political system, he says, “these investigators have the most important profession in the world today.”

Eight weeks out from the Milan-Cortina Winter Olympics and six months from North America hosting the FIFA World Cup, we’ll be discussing sports governance issues at the highest levels of sport—from diversity and inclusion to match-fixing, doping and corruption. For today’s post, I’m indulging in a little hometown pride in the city's embrace of the newest franchise in the Professional Women’s Hockey League, the Vancouver Goldeneyes.

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Women’s Hockey Has Stopped Waiting for Permission

Try explaining to the 14,958 people at Vancouver’s Pacific Coliseum on November 21st that women’s sports “don’t draw crowds.” Skeptics insist women’s leagues cannot sustain interest, but Vancouver’s sold-out, victorious debut for the Goldeneyes marked the largest crowd ever for a PWHL game at a team’s primary home venue. More than a milestone, this was the death knell for the durable myth that women’s sports lack commercial value.

In the league’s first arena where a PWHL team is the primary tenant, everything signaled that the women’s team was no longer an afterthought—from the logo at center ice to the upgraded video board to rally towels on every seat. For too long, women athletes have operated with shared locker rooms, limited access, or facilities purpose-built for their male counterparts. As longtime women’s hockey standout Sarah Nurse stated, “We’ve never, ever been a priority before.”

Vancouver’s sellout game wasn’t a one-off—it was a reflection of sustained growth. Across the league, total attendance jumped 53% from 483,530 fans in Season One to 737,455 last season. Merchandise sales doubled, social engagement surged by 68%, and fans now tune in from over 100 countries. More than half of women’s sports fans claim to have only begun watching in the past three years, demonstrating that the audience for women’s sports is accelerating rather than static.

Enthusiastic fans packed the rink kitted out in Goldeneyes gear and touting homemade signs. Women’s hockey of this caliber has been sought for decades and Vancouver has begged for a team of its own since the launch of the PWHL two seasons ago. The game itself more than justified the enthusiasm: clean puck movement, stand-up goaltending and, to the surprise only of the uninitiated, a great deal of physicality. (Of course, the Goldeneyes have fared less well since this inaugural game, but this is the home of the Canucks where faithful fans are undeterred by defeat!)

And where fans go, brands usually follow, ending the traditional narrative that women’s sports have a “marketability” problem. Research by Parity—an organization advancing women athletes through sponsorship equity—finds 32% of fans are more likely to buy from brands supporting women’s teams and 2.8 times more likely to purchase products recommended by women athletes. This consumer behavior isn’t charity, and brands are noticing: the PWHL’s sponsorship portfolio grew roughly 50% last season, attracting names from Barbie to Scotiabank to EA Sports. These partnerships are investing in a new sports culture curated with visibility, representation, and opportunity as marketing pillars.

The Goldeneyes’ first win won’t resolve every outdated trope overnight, but their debut was a reminder that fans respond to quality, regardless of gender.

FIFA’s decision to award its brand new “Peace Prize” to Donald Trump seemed less like a gesture toward global peace and unity and more a brazen exercise in pandering. The inaugural prize, which was created quietly, apparently without nominees, criteria, or any visible process, was handed out during the 2026 World Cup draw, with FIFA President Gianni Infantino hailing Trump for “extraordinary” actions for peace. It felt like Roman tribute.

It was not the pageantry, but the hypocrisy, that makes the moment remarkable. For years, FIFA has defended its most controversial decisions, awarding tournaments to countries with criminalized homosexuality, muzzled press, or appalling migrant-worker conditions, by insisting it must “stay out of politics.” Asking host nations to meet basic human rights standards, we're told, would be to foray into the political. Expecting progress on women's rights, or protection for LGBTQ fans or journalists would be political. Yet somehow, manufacturing a peace prize and handing it to a sitting head of state during a globally televised event is apolitical?

According to The Athletic, even FIFA’s own leadership structures were excluded. The 37-member Council, including all eight vice presidents, was not consulted about the creation of the award. The 211-member Congress did not vote on the prize, its rules, or the winner. Infantino and a smaller inner circle appear to have conceived of, approved, and presented the award entirely on their own; a governance black box inside an organization already known for its opacity. “Bestowed on behalf of all football-loving people from around the world,” FIFA said, although none of those people, nor their representatives within FIFA, was asked.

This selective engagement with politics is not new. When Brazil’s stadia alcohol laws undermined Budweiser’s World Cup sponsorship, FIFA successfully pushed the government to change its legislation. So much for principled neutrality. Political pressure is unacceptable when it involves human rights, but entirely acceptable when it involves beer.

We are reposting an article as part of the debate about the value of the ISO anti-bribery compliance standard. This was first published when the ISO standard was released, but we believe it remains a relevant part of the debate today.

The issue of universal standards has recently come to the forefront of the compliance world. We have just seen the release of a new and highly-anticipated document from the International Organization for Standardization: ISO 37001 - "Anti-bribery management systems." The document (available for purchase online) aims to define a standard for corporate anti-bribery compliance programs, both as an aid to implementation and as a reference point for certifying auditors.

Standards, of course, serve various purposes. On the one hand, they can help assure baseline quality in the interest of public welfare. On the other hand, they can establish compatibility and interoperability among separate systems. Both of these functions can be seen in the Great Baltimore Fire of 1904. When firefighting crews from New York and Philadelphia came to the city’s assistance, they discovered their hoses didn't fit the local hydrants. That experience led to the national standardization of firehose couplings—a classic example of the “compatibility” type of standard. It also led the city to adopt a building code requiring the use of fireproof materials—a good illustration of standards as “baselines.”

ISO 37001 is essentially a baseline-type standard. As such, it can serve a helpful purpose: articulating familiar principles from a formally neutral standpoint, not bound to the authority of any particular jurisdiction. What it doesn't do is respond to the need for consistency. Because there is no perfect anti-bribery system, it is important for companies to know that their programs are in line with industry and regional best practices, reflecting the actual risks each company faces. (A supermajor operating in Angola and a pharma company operating in China face very different challenges.) This can’t be captured in a single document. It requires ongoing development, communication, refinement, and response among companies and their compliance professionals.

By sharing and improving their anti-bribery strategies, practices, and techniques, companies can help elevate the standards of corporate ethics and integrity and send an increasingly consistent message that corruption will not be tolerated. At TRACE, we aim to support companies in their efforts to meet international standards that are based on a shared understanding of best practices and reasonableness.

In preparation for an upcoming onslaught of exciting sports events during the 2026 Winter Olympics, athletes spend almost every hour of their day in training. They train their bodies as well as their minds, to maintain a level of competition that few are ever likely to experience.

They monitor their eating habits, their sleep, their breathing, and their mindset. They ski, skate, run, jump, and push their bodies to the limit of what is possible. But what about their ideals? How do elite athletes build up an ethical regimen?

These athletes are often praised for their hard work. They are the best of the best in their field. They win rivalry games, they win medals, they carry a badge of honor for their country, their team and most importantly, themselves.

How, then, do we reconcile the unethical who may be among the "best of the best"? While many athletes use their elite status to set a moral example, there are those who, in achieving a certain stature, believe the rules then no longer apply to them. The same rules that they learned to when working to become "the best of the best." The same rules that delineate "best" from "great" from "maybe next time." And to a certain extent, they are allowed the free pass to behave badly.

Take, for example, the recent acquittal of five Canadian hockey players accused of sexual assault in 2018. The case itself was delayed, stalled, excused because of the talent that these young athletes possessed—their potential to continue to win glory for Canadian hockey.

Hockey Canada, once informed that a complaint had been filed against their athletes, reached out to a law firm for an investigation, but did not require the players to participate. The police investigation ended with no charges filed. Almost every player from the team went on to play in the NHL without issue.

In 2016, a Stanford swimmer, Brock Turner, was looking at jail time of up to 6 years for sexual assault of an unconscious woman on the school's campus. He instead received 6 months. His father called the criminal event "20 minutes of action."

In 2014, Olympian Michael Phelps was let off with a warning when pleading guilty for drunk driving twice within a 10-year span, an offense that was initially supposed to land him a year in prison. His coach later stated that even with the DUI arrest, "he was in much better shape" than his initial return to the pool after the 2012 Olympics. He went on to win 5 more gold medals and one silver for the U.S. in the 2016 Summer Olympics.

The behavior of these athletes in these situations is inexcusable. If nothing else, their judgement off the field, out of the pool, and away from the ice should have people asking about their ability to determine what is "right" from what is "wrong."

Yet those who are their leaders—their coaches, their teammates, their schools, the judges and juries who hand down verdicts, and even their parents, continuously reinforced the message that acting corruptly is ok. As "the best if the best" the standard rules of ethics no longer apply. After following the rules of the game to get where they are, they're given a "get out of jail free" card to operate outside the rules of ethical behavior.

Instead of holding these "elite" athletes to the standards they must meet (or even in most cases exceed) while in training to become the best -we suddenly expect - no, permit! - less of them on an ethical level once they achieve the highest level of athletic excellence.

And so the question must be asked: does being "the best" perpetuate the value of ethics? Or denigrate it?

For the past two decades, compliance has been defined by scale. Robust programs, multilayered policies, and sophisticated monitoring tools are all hallmarks of a well-managed compliance program. Yet, as this series revealed, resiliency is not a result of size but rather a product of connection. Small and medium-sized enterprises (SMEs), which form the backbone of many economies, can leverage their small size into an advantage. These SMEs will shape the future of compliance.

The networks these SMEs have created will be vital to the future of compliance. SMEs have natural networks comprising regulators, multinational corporations, and civil society organizations, all of which work towards shared, transparent, and accountable compliance systems. SMEs will continue to play a crucial role in these networks, especially as traditional compliance systems face strain under the complexity and speed of global risk. SMEs have a built-in advantage that offers a unique solution: agility, deep local relationships, and connection to on-the-ground dynamics and changes.

Operating so close to the ground and real-world dynamics means that SMEs are the first to recognize change. They are the first to see changes in corruption schemes, gaps in procurement practices, and shifts in local norms. Their proximity allows them to understand what integrity looks like, not just on paper but in practice. Often, SMEs are viewed as compliance risks rather than compliance partners. Traditional systems that focus solely on compliance fail under stress. But systems built on collaboration can adapt and endure. Sectoral collaboration, technology, and professional associations are all tools that allow SMEs to enhance their impact on the next chapter of compliance. Using these tools, SMEs have built a ready-made ecosystem that allows the experiences and insights of one to strengthen others.

These shared experiences are what enable SMEs to transition from vulnerability to resilience. A single SME navigating compliance alone may struggle with capacity and costs. But within a trusted network, they become a force that can shape local policy, influence industry standards, and demand accountability. In doing so, SMEs become both the beneficiaries and architects of integrity.

For compliance professionals, this demands a change in mindset. As global risks evolve, success will depend on seeing compliance as a shared strengthening, not as individual obligations. In the next chapter, compliance professionals will need to consider SME realities and co-design compliance systems that allow for two-way visibility and maximize SME advantages.

Compliance and integrity rules are not going away; however, the risks they were developed to address are evolving rapidly. In this fast-paced environment, SMEs connected by technology, shared values, and mutual accountability will have an advantage they can use to form the new backbone of global integrity. The next chapter of compliance will be defined by collaboration. The most resilient organizations will not be those that go it alone, but those SMEs that use their agility, ingenuity, and trust to build the future together.

In this second of a two-part series with anticorruption leader and Ukraine expert Matthew Murray about the status of, and risks to, Ukraine’s anticorruption agenda, I explore where he thinks there are opportunities and resources to move that agenda forward.

In particular, given Murray’s past experience working at USAID, I was curious where he thinks the West’s engagement stands now that USAID has been dismantled. He told me that the  World Bank, IMF, European Union, individual European governments, and other international bodies have all been stepping up their efforts and increasing support for Ukraine’s anticorruption institutions. Thus, he says, even without USAID, those institutions still have the benefit of mentoring, technical assistance, and funding, not to mention what Murray termed “continued moral support.” In fact, Murray told me, he still works with the National Agency for Corruption Prevention as an advisor on a pro bono basis. “It’s not that USAID is not missed,” Murray explained, “but the Ukrainians are busy adapting, becoming more self-reliant.”

Murray told me that he has been invited to make recommendations on how to continue strengthening the country’s anticorruption architecture. “Following the Revolution of Dignity, six different institutions were created,” he explained, “and they have somewhat overlapping missions.” The challenge is that these agencies need to avoid duplication, and be more coordinated, streamlined and efficient. This requires “change management” working with what he termed the “best practices and tools of collective leadership.” What is needed, Murray said, is an “inter-institutional strategy and a whole-of-government approach.”

Next, Murray said, a whole-of-government, Ukraine needs to improve its strategic communications with respect to the fight against corruption. He feels that “the facts about progress being made are not being communicated in a coordinated manner, according to agreed metrics.” While concrete steps taken under individual technical assistance programs to meet various milestones are being reported, the story needs to be told in what he terms “a more strategic and compelling way,” that emphasizes not just the positive progress, but also the missteps.

Murray and I closed by talking about the critical role of the private sector in the Ukrainian reform, reconstruction and anticorruption effort. The US, he explained, is working in partnership with the Zelensky government, led by Prime Minister Yulia Svyrydenko, to execute what Murray calls “a new form of economic statecraft designed to enable more strategic US investment in Ukraine,” including in critical minerals, oil and gas, and infrastructure. Examples of that partnership include the US-Ukraine Reconstruction Investment Fund, signed in April, in which the US International Development Finance Corporation (DFC) is making a seed equity investment. The US and Ukrainian governments, Murray told me “share a vision of the private sector as a change agent.”

From that point of view, Murray believes that if the fight against corruption is successful, Ukraine is positioned to become “a start-up nation.” He believes that foreign investors can help the country rebuild quickly with new industries, smart cities, renewable energy, smart transport, modernized agriculture, and more, while the local private sector can lessen the country’s reliance on foreign aid for economic growth. By the same token, citing new forms of collective action that are  emerging, he told me that Ukrainian entrepreneurs are working with donors and foreign investors to "advance an economic model that rejects oligarchic capitalism.” Working together, honest foreign and Ukrainian entrepreneurs can continue to reduce corruption, helping Ukraine “defend its sovereignty and rebuild."

In late July of this year, the Ukrainian government’s commitment to rooting out corruption appeared in serious doubt. On July 21, the Security Service of Ukraine (SBU) searched the National Anti-Corruption Bureau (NABU), leading to the arrest of individuals who were alleged to be linked to Russia. Transparency International-Ukraine was among the civil society organizations that condemned the raid, asserting that the search was part of a government effort to “to undermine the independence of Ukraine’s post-Revolution of Dignity anti-corruption institutions.” The local press later disputed the allegations that touched off the raid.

On July 22, President Volodymyr Zelensky signed a bill that had been amended to include provisions restricting the independence of NABU and of the Specialized Anti-Corruption Prosecutor's Office (SAPO), moving them under the Prosecutor General. Following the raid, Zelensky claimed these bodies needed to be shielded from “Russian influence.” Protests broke out, Ukraine’s Western partners raised concerns, and the EU froze $1.7 billion in aid. On July 24, Zelensky reversed his decision, submitting a new bill to Parliament, which he claimed would safeguard the independence of NABU and SAPO while also protecting them from Russian meddling. The Verkhovna Rada approved that bill on July 31.

Against that backdrop, a parallel crisis was brewing. Under the IMF’s Extended Fund Facility program review, Ukraine was due to appoint a new head of another anticorruption body, the Bureau of Economic Security (ESBU or BEB). That deadline was first moved from the end of February to July, due to procedural delays. In June, the international commission charged with vetting candidates and making a nomination to the government put forward Oleksandr Tsyvinsky, a former NABU investigator. It was known that Tsyvinsky had family ties to Russia, but that was not considered an issue at the time. However, citing additional materials provided by the security services, the Cabinet of Ministers rejected his candidacy in early July and asked the commission for a new candidate. The commission held the line and renominated Tsyvinsky with the support of Ukrainian civil society groups, but his candidacy was rejected a second time. It was not until early August that Tsyvinsky was finally approved to head the BEB.

To assess whether Ukraine’s anticorruption efforts are truly back on track, I spoke recently with Matthew Murray. This piece is the first of a two-part series covering our conversation. Murray is a fixture in the global anticorruption movement, and is very well-placed in Ukraine, having been appointed in 2023 by Ukraine’s Cabinet of Ministers to the selection commission for the new chair of the National Agency for Corruption Prevention (NACP). Murray is an attorney, adjunct professor at Columbia University’s School of International & Public Affairs and holds board positions in the private sector. He previously served as Deputy Assistant Secretary of Commerce for Europe, the Middle East and Africa and as a Senior Advisor on Rule of Law and Governance at USAID during the Obama Administration.

In that same critical period this summer, Murray attended the Ukraine Recovery Conference in Rome, where he said concerns about NABU, SAPO and the BEB were at the forefront of Ukrainian civil society meetings. As this important event for Ukraine’s future kicked off, Murray said there were signs that the government was seeking to “undermine or dilute the independence of these young and still fragile institutions.” In response, Ukrainian NGOs with whom he was meeting immediately began developing legal strategies to push back on the government and to raise the issue with representatives of the G7 and international donors at the conference.

Murray described the civil society response as “dynamic, creative, and assertive,” showing what he called “zero tolerance” for any backtracking on anti-corruption commitments. Murray said that Ukrainian government leaders “miscalculated about how their actions against NABU and SAPO would be perceived” and that they “should be grateful to civil society for holding them accountable and keeping them on track.” At root, he feels it is unclear what motivated the Ukrainian leaders’ decisions, but rather than speculating, Murray said he “prefers to highlight how quickly they decided to reverse themselves.” Further, Murray underlined (as he has written) that fighting corruption strengthens Ukraine’s national security. He noted that Putin cited Ukraine’s anticorruption push in his attempt to justify the full-scale invasion in 2022. Murray said that Putin “is threatened by the strength of Ukrainian civil society” and by any challenges to his “ability to use strategic corruption and malign actors to upset the country’s progress.”

The problems, however, that garnered public attention in the summer have not completely subsided. In late October, the SBU once again carried out searches of the homes of relatives of a NABU detective. In its analysis of that event, the Kyiv Independent wrote, “only Russia” stands to benefit from this open hostility between the President’s circle and Ukraine’s independent anticorruption agencies.

Among the thousands of professionals displaced when USAID was dismantled were numerous lawyers whose work had undergirded the agency’s programs worldwide, designing grant agreements and contracts, ensuring compliance, conducting due diligence to vet implementing partners and more. To explore how some of those experts now plan to deploy their skills, I spoke recently with Jonathan Ng, one such former USAID lawyer.

Ng emphasized the importance he places on maintaining the work he had previously done at the agency. As he told me, those efforts were too important to stop, because international development “feels more like a calling than a job.” However, Ng recognizes that the work was not without its challenges. He told me that advancing anti-corruption in the development sector sometimes engendered criticism or pushback at the local level, either from implementers, their partners or host country governments eager for things to move faster or disinclined to take outside advice on reforms.

In particular, I was curious about Ng’s views, in this post-USAID context, about the future of governance and rule of law programs, such as training for ministries, supporting civil society, and the like, which USAID funded so extensively. This is the type of proactive work that improves the business climate and the flow of deals that can help countries become less reliant on foreign aid by building a thriving private sector. Ng noted that other bilateral and multilateral agencies have long supported such projects, but those donors will need to step up to fill the void, given the high priority of such efforts.

Following the dissolution of USAID, Ng, in collaboration with a team of other attorneys, launched a law firm, Mission Driven Counsel LLP, to support other organizations in the international development and humanitarian assistance space – such as foundations, impact investors, multilaterals and non-profits, as well as corporations doing business in emerging and frontier markets.

From the standpoint of working with commercial clients in particular, rather than on USAID projects, Ng anticipates that his approach will have to adapt. Helping companies protect their investments is different than protecting US taxpayers’ funds. He is eager to tackle this paradigm shift, making the rationale for compliance about the benefits to a firm, such as safeguarding its resources and earnings. Taking an economic approach to advising firms on risk management is different from a more strictly ethical and values-based approach to anti-corruption common within an international development context.

Along those lines, I was also curious how Ng sees the weakened FCPA, now several months along, affecting international business transactions. To his mind, it is important to work around that challenge, and to ensure that clients understand, notwithstanding the policy changes, that the substance of the law is still critical. At root, Ng said, the legal guidance is: “Don’t do business with bad actors.” Companies must continue to ensure compliance, keep their anti-corruption policies up-to-date and train their staff. The FCPA was the means to achieve that end, but the end remains. In his view, a greater risk is that some developing countries now, as he put it, “take their foot off the gas” without US influence, and could “default to the lowest common denominator.”

Ng told me he understands that companies might think that a trade-off between doing business ethically and getting the deal done is worth the risk – that they can afford the cost of some bribes if the profits are worth it. Thus, he thinks it is important also to quantify the costs of corruption in terms of intangibles, such as reputational damage or the risk of getting entangled in long-term corrupt relationships. Drawing on his long experience in emerging markets, Ng emphasized, “They may think that the trade-off might work, until it doesn’t.”

Question: As 2025 winds down and compliance priorities continue to evolve, how can teams adapt to meet organizational needs in a changing landscape?

Answer:

Thankfully, technology can help with many of these pivots in compliance plans—keeping you on track and efficient—allowing time to still focus on pressing compliance concerns throughout the year.

• Training: If you are planning to launch training, there are features within most LMS systems that allow for recurring enrollments, so that you are not stuck with the administrative task of enrolling learners into training each time a course is needed. The TRACE LMS is a great option to set up semi-annual training on a number of compliance topics.
• Outreach and Communication: Using your internal intranet or email platforms, you can also create compliance communications in advance, and set them up for delivery throughout the year. If there is an important compliance message that should be addressed, you can use Outlook’s “delay delivery” option to send out a compliance alert at a given date and time, Always remember to check for holidays and large company deadlines!
• For real time pivots in compliance, use your conference calling system to schedule an in-person town hall meeting with colleagues, sharing updates and compliance insights. Record the session and send it to anyone who was unable to attend the meeting live.‍
• Auditing: If you need to check that your messaging and training is driving your compliance goals, use data analytics tools like Google Analytics to help you see results of your initiatives quickly and easily.
• Set up Google Analytics for your LMS, for example, to see how often people are entering the site  to learn the best times to train, and times when people tend not to be online.

With the technology available to us in our day-to-day workplace, it makes the transition in compliance directives much easier to develop and implement. Think outside of the box and even ask other departments about their strategies, you may learn something new! Good luck!

The Open Government Partnership (OGP) was created in 2011 to bring governments and civil society leaders together to “promote transparent, participatory, inclusive and accountable governance,” through advancing national and local level policy reforms. Since then, the issues impacting transparency and good governance have expanded dramatically. To understand how the OGP and its members (currently 74 countries and 150 local governments) are approaching new challenges, I spoke with Joseph Foti, Principal Advisor of Emerging Issues. Foti described his work as pushing the field forward, focusing on the intersection of anti-corruption and governance with technology, energy, climate, new forms of finance and more.

One issue we touched on was artificial intelligence, which Foti sees as a potential tool for compliance. Even without machine learning, he says, we knew of particular suspicious payment patterns demanding further scrutiny. Now, machine learning is being used by major companies to flag such financial flows, and the data systems that companies maintain will allow them to use AI, as he put it, “to supercharge internal compliance mechanisms.” However, he stressed, “AI isn’t a substitute for good judgment,” and will not obviate the need for ethics and compliance training, as well as professional internal fraud monitoring.

By the same token, for governments to mobilize AI to combat corruption, they need to understand that the results will only be as good as the incoming data, and many governments, particularly in emerging markets, lack the data quality needed. To address this issue, the sector needs much more open, public, reliable data on procurement, ownership structures, and political finance, among other areas, and the data sets need to be, as he put it, “machine-readable, interoperable, verifiable, and validated.” The well-known tendency of AI to hallucinate heightens the need for verified data. From this point of view, he expressed concern about the recent US Department of Justice decision to delete existing beneficial ownership data.

We also touched on supply chain transparency for critical minerals needed for the green energy transition. In Foti’s view, different approaches are needed depending on the mineral and its source. It is relatively easy to examine US and Australian copper supplies, while cobalt, sourced elsewhere, has been linked to child slavery, civil conflict and wildcat mining. In many countries, he noted, it is difficult to have public scrutiny or to deploy open governance measures at the point of production, so it is easier to engage with the companies or purchasing governments that buy those resources. He cited efforts to engage with purchasers of Indonesia nickel seeking EU and US market access. In short, he said, there are various points in the supply chain where measures such as community consent, licensing transparency, and subsidy or tax transparency can be deployed.

Finally, I asked Foti whether he is concerned by the apparent US retreat from the transparency and good governance agenda. He pointed out that while the US was a founding member of OGP, the organization does not receive US government funds, and in his view, the US has as much to learn from other countries as it does to share. He cited some reforms that the US has adopted from others, such as participatory budgeting, open contracting innovations, and certain access to justice practices. In highlighting other countries’ achievements, he pointed out that past innovations have come from countries such as Ghana, Morocco, Côte d’Ivoire, Senegal and others. Even when there might be governance challenges in those countries, a certain ministry or agency can serve as a unique island of leadership. Moving forward, he noted that Brazil is the incoming OGP chair and that he also believes that the UK can step up in its good governance leadership.

Overall, given the complexity of new issues confronting the good governance community, he would like to move away from a “government vs. civil society” binary and be creative in finding leverage points to advance transparency. He is not confident in industry “self-regulation,” however. Even as traditional models of governance have weakened, governments still have a role to play. Foti thinks that the right infrastructure for transparency will be what he calls “nested institutions” with multiple tools and layers, mixing industry standard-setting, government standard-setting, clear regulation, third-party certification, and multi-stakeholder dialogue and oversight by civil society and labor.

Question: I am developing new content for my compliance team’s annual training, and we noticed from feedback on last year’s training that a quiz is no longer an effective way to test knowledge at the end of a module. Recent learning trends also emphasize short courses without a knowledge check. Would you recommend removing it? If so, how can we determine whether learners actually gained any knowledge?

Answer:

This is a great question, and one that I think can address multiple challenges in compliance training, which is often dreaded within the workplace.

Studies have shown that microlearning improves retention of information, so you're right to stick with shorter modules. Shorter, repeated lessons help learners to better understand and retain what they are learning.

What can replace your typical multiple-choice quizzes at the end of the module can continue that trend of reinforcement and retention, too.

Consider the below options as ways to ensure that your training was completed and the compliance message was received.

• Utilize gamification: instead of a quiz, develop a short game to increase interest and engagement with the course. Often learners will go back to a course with a fun game to take it again and even improve scores within the game. Simple yet effective games include a word search or crossword puzzle.
• Develop a virtual forum: instead of quizzing the group, ask them to join a virtual forum to discuss the content. Speaking to the subject will help retain the information long after the module is done, and by teaching others what was learned, the learners will reinforce their own knowledge.
• Ask for feedback: Your audience will appreciate being included in a personalized feedback survey and seeing that you listened to them already by removing the quiz questions, since that seemed to be what was addressed last year. Show them again that you listen to their ideas and ask for their thoughts on improvement! They will be more inclined to take in what the course addressed so that they could share their thoughts.

Using these tools, your audience will engage more with your content. Having a virtual forum, or creating a survey will help you to see and hear what the audience got out of a course so that you can continue to improve year after year.

Happy training!

In past decades, there have been a number of protest movements driven to a large extent by public anger about corruption and poor economic governance which brought down governments, including Georgia’s Rose Revolution, Ukraine’s EuroMaidan and the Tunisian Revolution. Recent years have seen mass protest movements in Asia in particular connected to economic grievances, such as the 2022 Aragalaya in Sri Lanka that toppled Gotabaya Rajapaksa and the July Revolution in Bangladesh that brought down Sheikh Hasina.

Nepal’s September 2025 Gen Z protests fit these trends, led by young people tired of a sclerotic and corrupt political class, nepotism and lavish spending by the children of the elite, poor public service delivery, and a lack of opportunity. Touched off by the government’s ham-handed attempt to shut down social media, the protests, at first peaceful, quickly turned violent, and eventually forced Prime Minister K. P. Sharma Oli to resign. As a result, Sushila Karki was appointed interim Prime Minister, becoming the first woman to lead Nepal. New elections are set for March 2026.

One question about all of these movements is the degree to which they are capable of truly breaking deeply entrenched patterns of corruption, poor governance and economic mismanagement. The track record is not particularly good. Georgia has seen significant democratic backsliding and Tunisia has turned authoritarian anew. August 2025 protests in Indonesia, while they did not bring down the government, led to a promise to cut perks for parliamentarians, a pledge that now appears to be walked back. Meanwhile, there is reportedly mounting dissatisfaction in Bangladesh a year after the revolution, and one month on, frustration in Nepal that the interim government is not tackling corruption quickly enough.

To better understand what is happening in Nepal in particular, I spoke recently with the head of a local economic, governance and democracy think tank who requested not to be named for this blog. He raised several points that are concerning if the aim is to bring about lasting change. First, he noted, the protestors brought rather diverse and, in some cases, vague demands to the protests and lacked a unifying political center. Additionally, he told me, the violent turn that the protests took appears to have been driven by opportunists, who in turn provoked the government’s overreaction. He explained that the anger with corruption and nepotism that drove the protests is a multi-layered problem without clear solutions – from petty bribes to secure basic public services, to mid-level graft impacting small and medium-sized businesses, to grand corruption and kleptocracy that have allowed those in power to live extravagantly.

He also explained that Nepal’s experience is different from other cases in key ways. After centuries of monarchy, Nepal became a democracy in 2008, and since then, at least on paper, has exhibited a quite robust and competitive political system. The country didn’t fit the model of one leader or political party dominating the country, growing rich, and eventually sparking the anger of young people. However, he noted, corruption had also become “democratized.” The ashes of millions of dollars and rupees were found in the burned houses of political leaders across the spectrum, from the center-right Congress Party to the Maoist Party, he noted. By the same token, he credited that democratic instinct for opening the information space that touched off the protests, and paradoxically he has some optimism now that all of the parties have been discredited.

As we concluded our conversation, I asked, after a long career working in civil society, including with many Western donors, how he now feels about the results of the numerous anti-corruption and governance programs implemented in Nepal. His view is rather bleak: that much of the work was for naught, that the bureaucrats who participated in those programs were happy to spend someone else’s money, and that they were more accountable to the donors than to Nepal’s citizens. He explained that there had been a revolving door between the government and the various aid agencies’ implementing partners, while few benefits accrued to Nepal’s people. Citizens, he said, saw the impact of public health and nutrition programs, but he now wonders whether good governance and anti-corruption can ever be externally funded.

Question: With the current geopolitical climate, developing a compliance training program is difficult, as compliance topics at the forefront continue to shift and evolve. How do I prepare for the coming year?

Answer:

Thanks for this question, which is a great one to be thinking ahead about as the summer is in full swing and the end of year approaches.

While it can be hard to predict what the future will hold in terms of regulations and laws, several things remain unwavering when training on compliance: the need for ethical business practices, sharing those practices in your policies, and the need for employees AND third parties alike to speak up should they see something that may violate company codes and policies. Even when dealing with enforcement agencies, many provide guidance on the training that you need to share with your colleagues and that guidance remains constant.  

Take, for example, the 7 essential elements of an effective corporate compliance program. Meaningful training is one such element and includes touching on internal policies.

When creating a training plan each year, it is important to highlight your company code of conduct and other policies, and what it means to do ethical business for your organization. Consider some of the following topics when addressing your audience:

• Accurate record-keeping and data protection
• Avoiding gifts, travel, or hospitality that is outside of the thresholds authorized by company policies
• Reviewing past ethical issues as helpful benchmarking/real-life examples of what not to do
• Conflicts of interest awareness and avoidance

If someone feels that a policy is being violated, they should also know who to contact/where to report. Add details like a dial-in number, chat support or an email address for the compliance team in which individuals can share their concerns.

Including these important details with training each year will ensure that every individual will know your internal policies, regardless of outside factors, and that they will know how to report any possible wrongdoing.

A CEO’s words on ethics and integrity matter. The CEO sets the tone, signals the company’s integrity priorities, and determines how employees understand the company’s culture. A CEO’s public speeches, online statements, and inspiring declarations signal leadership’s commitment to integrity. While CEOs are essential, they do not exist in a vacuum, they are one part of an integrity system.

For compliance officers, this is where a stress test comes in. Compliance teams should test a CEO’s words against established policies, procedures, and employees’ firsthand experiences.  Misalignment here is a red flag. A CEO who emphasizes growth without discussing integrity and ethics sends a clear message, just as a CEO who emphasizes integrity and ethics but withholds resources for integrity initiatives.

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Run the Stress Test

Running a stress test on your CEO will give compliance teams information about the effectiveness of integrity systems. As a compliance team, this stress test should ask:

• Understanding the Risks: Does the CEO address the organization’s most significant risks?
• Employee Experience: Can employees identify the policies, procedures, and tools that support them? Or are employees confused about the priorities of integrity?  
• Hotline Data: Is the company’s hotline checked regularly? Are there reports that contradict the picture leadership paints? Are hotlines used as a basis for identifying emerging risks?
• Resource Allocation & Accountability: Do reports contradict the leadership’s perspective? Are there resources and tools that support integrity programs?

Answers to these questions will highlight gaps that require attention and focus.

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Pass the Stress Test

Regulators use effectiveness as the standard. They will look for evidence that the CEO’s words align with the organization’s policies, procedures, and resources. Compliance officers must be willing to ask hard questions and use the answers to those questions to improve and strengthen integrity.

Words alone will not protect a company from scrutiny. But when words and policy align, integrity is more than messaging. It is part of a company’s culture, and this is what will pass the stress test.

In the Vulnerability to Resilience series, we have explored how small and medium enterprises (SMEs) use their vulnerabilities to create. SMEs possess the agility that enables them to identify risks early and maintain community and business relationships, which SMES can leverage to prioritize integrity and open new markets. Cooperation allows SMEs to raise their ethical standards in the market. In this next segment, we examine another SME advantage: the power to innovate.

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Innovation Matters

Multinationals and larger corporations use complex and resource-intensive compliance programs. SMEs operate with limited budgets and small teams. They must find creative ways to meet the exact same expectations. This constraint is not a weakness; in fact, it often leads to solutions that are leaner, faster, and effective. The bottom line is that SMEs can also engage in compliance.

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How SMEs Innovate Compliance

SMEs are leading the way on innovative compliance solutions. Some of the most effective tools and approaches include:

• Access to Digital Tools
• Affordable, subscription-based platforms provide SMEs with access to systems that were once too expensive and complex. SMEs can now monitor risk, complete third-party due diligence, and attend online training sessions at a fraction of the cost. Digital tools enable SMEs to engage in meaningful and scalable compliance.
• Free Technology
• In emerging markets, entrepreneurs utilize WhatsApp groups to discuss ethical dilemmas and solutions in real-time. Free online tools allow SMEs to communicate easily and share resources with ease, proving that innovation does not require software.
• Process Innovation
• The most powerful tool available to SMEs comes from their ability to weave ethics into daily operations. Compliance becomes integrated as SMEs train every employee to spot ethics and compliance red flags. They develop a culture of shared responsibility that reduces costs and strengthens integrity.

SMEs can turn limited resources into a strategic advantage. They utilize powerful tools that ensure compliance is transparent, affordable, and practical. In this way, SMEs can match or even outperform their larger counterparts.

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Integrity Using Innovation

SMEs demonstrate that integrity does not depend on the size of a compliance department; it’s about designing solutions that work in the real world and making ethics central to operations. By harnessing their agility, local connections, and collective action, SMEs can turn their vulnerabilities into an advantage.

For small and medium enterprises (SMEs), compliance feels like a lonely climb up a steep mountain. Costs are high, rules are constantly evolving, and there is pressure to cut corners to keep pace. Standing alone, an ethical SME can lose when competing with actors who ignore the rules.

SMEs do not struggle because they lack integrity. They struggle because they must compete with unethical competitors. Doing business, the right way may mean losing business. However, when SMEs come together to address unethical actors, the dynamic changes. Collective action is an SME superpower. It enables SMEs to shift the market towards fairness, establish industry standards, and remove barriers to growth.

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The Pathways to Collective Action

Collective action can take many forms, both formal and informal. Some of the most effective include:

• Industry Associations
• Associations provide SMEs with a powerful platform to share resources, create targeted training, and agree on sector-specific standards. Where an association does not exist, SMEs can collaborate to build one. This from-the-ground-up approach ensures that integrity is at the center of the association’s priorities from the start.
• Chambers of Commerce
• Chambers can link SMEs across industries and serve as trusted advocates. Chambers are also able to amplify the voice of ethical businesses with local governments and international regulators, making it harder for corner-cutters to dominate the conversation.
• Collective Action Initiatives
• SMEs can also come together around integrity pledges or transparency drives. These initiatives establish visible standards and signal to the market that ethical businesses stand united.

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The Payoff

Collective action delivers results. Cost sharing lowers costs. Industry standards prevent a “race to the bottom” while increasing credibility with customers, regulators, and investors. Collective action is a strategy that centers and rewards integrity.

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Integrity as a Shared Asset

SMEs can build resilience through collective action. By making integrity a shared asset that gives an advantage to all SMEs, SMEs can ensure unethical actors no longer have an advantage. There is power in numbers, and by collectively committing to protecting integrity, SMEs can create ecosystems of integrity that reward, rather than discourage, ethical actors.

Question: What are the best topics to discuss when training on compliance and governance as we see new enforcement actions and guidance on the FCPA?

Answer:

With the halt to the FCPA earlier this year, a lot of compliance teams reached out with questions on what compliance topics remain relevant and top-of-mind with shifting policies.

The shift in enforcement announced by the DOJ in June and the latest declination for FCPA violations announced in August conveyed that there are tried and true compliance topics that should continue to be enforced each and every year, throughout the year. And these should always be top-of-mind.

As we see from the declination against Liberty Mutual, and from nearly all FCPA enforcement throughout the years, third parties were involved in a bribery scheme to influence government-owned banks in India.

When the bribery was discovered, Liberty Mutual went to the DOJ to share the wrongdoing and take proactive steps to eradicate the issue.

These are two very important topics that any good compliance training program should cover: third party risk and speaking up against wrongdoing.

Third parties pose the biggest risk for organizations in that they often resort to corrupt practices in order to win business. Employees must understand the risks when working with an outside entity, and understand that this trickles all the way through an organization's supply chain. Important red flags to know and understand when working with third parties is always an evergreen training topic.

Going hand-in-hand with that very topic is speaking up. If an employee sees wrongdoing, or even suspects it, they must be trained on who to report to with their concerns, and how to report.

No matter the geopolitical situation, the organizational shifts, or the changes in government leadership, these two topics remain steadfast in compliance. While risks may evolve and change, these subjects have always been a part of the nature of doing business.

To ensure that your organization remains ethical and is practicing good governance, train early and often on third party risks and speaking up against unethical behavior!

Several months ago on this blog, I examined the role that impact investors can play in advancing the fight against corruption in conversation with Ambassador John Simon of Total Impact Capital. To explore this important question in further detail, I spoke recently with Huma Yusuf, Director, Business Integrity, and Varun Sharma of British International Investment (BII) and Chara de Lacey, Head of Business Integrity at Transparency International UK (TI-UK).

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BII and TI-UK have collaborated on two important guidebooks in this space: 2022’s Investing with Integrity: The Benefits and Challenges of Integrating High Business Integrity Standards in Impact Investments, and 2024’s follow-up, Investing with Integrity II: How Corruption Undermines Environmental and Social Outcomes. The first of these two tools offers a series of recommendations for asset owners, impact investors, companies that receive such investment, and the employees, suppliers and other stakeholders of such companies, about why and how the impact investment community should make business integrity “central to their development mandate,” rather than solely a question of compliance, among other points. The second takes a practical look at particular steps impact investors working in high-corruption markets can take to identify and mitigate risks that can undermine social and environmental outcomes.

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As Yusuf explains, the collaboration was born of BII’s position at the time as the only development finance institution with a dedicated business integrity department. BII makes investments in particularly high-risk environments, and with investees that often have nascent risk management frameworks and internal controls, including in markets with weak regulation. The aim was to explore what BII could do, beyond the counterparty screen, to “help investees build systems to manage integrity risks”; and to convince the broader development finance community of the need to prioritize business integrity, corporate governance and strong internal controls.

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BII and TI-UK consider impact investors to have a special role in upholding integrity, and that managing integrity risks in the impact sector is distinct from the way in which traditional investors approach emerging markets. Yusuf stresses that investors who seek “impact can't be blind to the broader risks to development outcomes in the ecosystem.” De Lacey adds that while various investors will prioritize different types of issues, for impact investors, it is critical to maintain the highest business integrity standards. BII and TI-UK recognized that for impact investors, advancing the rule of law and fighting corruption – which is covered by SDG 16 – were the least addressed outcomes, compared with issues such as employment generation and positive environmental outcomes. Development finance institutions (DFIs) and impact investors need to mitigate execution risks like all investors, but also cannot ignore the fact that corruption erodes other sought-after development aims.

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Expanding on that point, de Lacey notes that business integrity should be a consideration throughout the investment cycle, for both investors and investees. These guides, by engaging impact investors in particular, bring a new dimension to the conversation, emphasizing that business integrity is part and parcel of the development mandate. She explains that for impact investors, environmental and in some cases social or human rights due diligence was already built into the equation, but there was no specific attention being paid to the underlying, root cause issues that can impact a firm’s success when the investor is “setting out to do good.” From that point of view, these guides embody a response to the investor who might say that because of the focus on impact, they “know” that their investees are “good” companies that don’t engage in corruption.

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De Lacey says that it is important to focus realistically on “what happens next, after due diligence and the investment,” because it only takes one incident to upend impact. Yusuf notes that while impact investors already tended to carry out more detailed due diligence in order to identify the right partners (in terms of alignment and track record) with whom to achieve development aims, one finding of the first report was that putting all the effort on pre-investment due diligence did not account for challenges through the investment lifecycle. In terms of next steps in this collaboration, a third guide in this series, scheduled for autumn 2025, will address that issue in more detail. According to de Lacey, the new guide will look more deeply at the post-investment stage, providing guidance on how impact investors can monitor business integrity red flags and related operational risks in their portfolios, including monitoring the effective implementation of business integrity risk management approaches, thereby improving portfolio resilience and performance from both a financial and development impact perspective.

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Yusuf points out a number of concrete outcomes from this effort to date. For example, many European DFIs have created dedicated business integrity functions, the African Venture Capital Association has launched a business integrity resource hub, and private equity and venture capital associations across South Asia are paying more attention to business integrity and corporate governance practices. As Yusuf and de Lacey say, the impact community is recognizing that an enhanced focus on business integrity preserves value, prevents losses, mitigates the negative development impact of corruption, and helps deliver social and environmental outcomes.

In Part One of this series, we explored how the investigation into Representative Alexandria Ocasio-Cortez’s appearance at the 2021 Met Gala unfolded, and what it revealed about the burdens, inconsistencies, and reputational risks of regulatory reviews. While the ultimate outcome was limited to additional payments, the years-long process underscored the steep costs of even minor compliance missteps.

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In this second part, we shift focus from the investigation itself to the underlying dynamics that created risk in the first place. These lessons highlight how conflicting interests, unclear controls, weak oversight, and poor recordkeeping can compound exposure – and how organizations can avoid similar pitfalls.

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Forced marriages and conflicting interests carry additional danger

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While Ocasio-Cortez wanted to minimize costs, her designer had a competing incentive to maximize visibility. Since the value of that publicity would far outweigh the cost of any labor or materials, the Ethics Committee concluded that the Congresswoman should have known her designer might ignore instructions about cost control:

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“Given the inherent value gained from the exposure of a sitting congresswoman wearing their designs to the Met Gala,” the report said, “it is not surprising that [the designer] did not seek the congresswoman’s ‘authorization’ for the gift they provided.”

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The simple way to manage this conflict would have been to use an off-the-rack dress, or pick a different designer. But at the tightly controlled Met Gala, organizers largely dictate who dresses whom.

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For companies dealing with local set-asides or mandated partners, this scenario is a familiar one – as are the needed control elements: communication, documentation, and boundaries.

The importance of setting control parameters

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This was perhaps most apparent when it came to determining the rental value of the dress. There is no simple way to gauge the rental value of a bespoke dress, especially since designers of Met Gala dresses usually provide them to celebrities for free. Nevertheless, Ocasio-Cortez’s lawyers used market data and other public information to estimate that value, and the Ethics Committee ultimately endorsed that approach. But a key portion of that approach depends on the actual cost of making that dress, and there appeared to be little planning for how that cost would be calculated.

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The truth is that there is considerable room for interpretation in calculating the cost of a creative product. For instance, should time spent browsing websites for preliminary lookbook ideas count toward the cost of the final dress? How about a trip to a fabric store where several samples were looked at, in the context of multiple projects? What about general marketing and other overhead costs?

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To get a sense of just how malleable the accounting can be, consider the movie business, where studios are notorious for finding extra “costs” for a production. When an actor’s pay is based on a percentage of net profits, even blockbusters like Forrest Gump and Return of the Jedi are somehow financial flops.

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In concluding that the dress actually cost about $6,300 to make, the Ethics Committee relied on a document compiled by the dress designer’s accountant. While that document was purportedly made soon after the gala, its existence was unknown to Ocasio-Cortez, her lawyers, and even the designer’s own lawyers (who were also tasked with figuring out how much money the representative owed in connection with the apparel) until years later.

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It’s not clear whether these figures are beyond dispute. Given that she faced no formal finding of wrongdoing, Ocasio-Cortez may have chosen not to challenge those numbers out of a practical desire to move on.

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The need for oversight and recordkeeping

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To state the obvious, lawyers are experts in the law, and not fashion industry accounting.

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Hindsight suggests that Ocasio-Cortez’s lawyers should have come to a clearer understanding with the designer and her accountant as to how the cost of the dress would be managed and calculated. Perhaps even more importantly, her staff should have been made more aware of such arrangements, and effectively briefed on the importance of following them.

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Instead, the investigations revealed that there were some back-and-forth exchanges between the Congresswoman’s staff and a publicist for the designer as to how to set the rental value of the dress. These exchanges did not appear to track the methodology that Ocasio-Cortez’s lawyer had devised to determine that rental figure. Coupled with delayed payments and the staffer’s dropped communications with vendors, this may have painted an unfavorable picture for the Ethics Committee’s reviewers.

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Practitioners should be aware that it is often not enough to simply give risk advice – they need to help design and execute strategies for making sure that the advice gets followed, including a paper trail to document the actions. Often, this means understanding an industry or a transaction well enough to know where execution might fail, and designing proper controls to address this risk.

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What could have been done instead?

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In the end, Representative Ocasio-Cortez may be wishing that she had never attended the event, not just from the exhausted tone in her attorney’s letters, but also because it was poorly received by many progressives. When risky but potentially lucrative opportunities arise, organizations should not only ask whether they have properly considered the risks, but also whether they have properly measured the benefits. Ocasio-Cortez and her team could have taken some of the additional control steps mentioned above, but they may have been served even better by simply declining the invitation.

This summer, the bipartisan House Ethics Committee wrapped up a long-running investigation into Representative Alexandria Ocasio-Cortez’s appearance at the Met Gala in September of 2021, concluding that she did not pay enough for a custom-made dress she rented for the event – thereby making it a prohibited gift.

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“While the committee did not find that Representative Ocasio-Cortez’s violations were knowing and willful, she nonetheless received impermissible gifts and must bear responsibility,” the 31-page report said. The Committee ordered Ocasio-Cortez to make additional payments, but did not reprove or otherwise censure her.

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These missteps took place even though Ocasio-Cortez had engaged a partner at a well-known political law firm to guide her on how to properly accept the invitation, including personally paying for goods and services connected to attending. That a member of Congress and an established lawyer could try to abide by relevant rules but still fall short shows just how difficult ethics-related compliance can be, and reveals important lessons to risk and business leaders.

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We explore some of these lessons in a two-part series. Part One discusses lessons to be gleaned from the investigation itself; Part Two considers key actions leaders can take to assess and mitigate risk.

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The investigation is often worse than its outcome

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In its final report, the Committee found that Ocasio-Cortez’s free attendance at the Met Gala was allowed, but concluded that she impermissibly accepted gifts and provided inadequate oversight of her staff in its handling of her attendance.  No formal sanction was issued, and the Committee merely sought an additional payment of about $3,000 to reflect the fair market value of the gifts. The underpayment was based on a misunderstanding about how much it cost to make the dress that Ocasio-Cortez wore to the event.

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But the investigation itself was a considerably more taxing affair, starting with a preliminary inquiry by the Office of Congressional Conduct (then called the Office of Congressional Ethics) in early 2022, and extending into this report in 2025. Along the way, there were multiple witness interviews, document productions totaling more than 12,000 pages, and shifting inquiries and conclusions. Near the end of the investigation, the Congresswoman’s counsel complained that her extensive cooperation with the Ethics Committee only seemed to have “increased the scrutiny” she received.

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As an example of this, the lawyer cited what appears to be a frame-by-frame review of social media posts about Ocasio-Cortez’s outfit at the gala, which led to a line of inquiries about the costs of a paper flower pinned to her dress. (It turned out to be about $35, which the Committee also asked her to reimburse.)

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Understandably, Ocasio-Cortez’s counsel argued that “the Committee appears to have spent significant staff time both rechecking OCE’s work, and searching for additional things that the Congresswoman would need to pay for” (emphasis original).

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Similarly, Foreign Corrupt Practices Act investigations can drag on and branch out, at substantial cost to companies. This has been a point of criticism for many years to little avail – despite repeated assurances from regulators that they will speed up their reviews. It is also why practitioners should craft their advice not just on landing on the right side of the law, but also on how to avoid an investigation in the first place.

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The goalposts will appear to move

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Similarly, it’s not uncommon for regulators to shift tactics during these reviews, as was the case for Ocasio-Cortez. When the (then) Office of Congressional Ethics published its findings in June of 2022, it did not dispute the rental price of the dress. It also explicitly agreed that it was permissible for her partner to attend the gala as a spouse despite not being legally married.

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But after referring the case to the Ethics Commission for further review, the latter not only took issue with the cost of the dress, but also contradicted the OCE and concluded that Ocasio-Cortez’s partner should not have been treated as a spouse who is thereby eligible for free attendance. Weirdly, the Ethics Commission then changed their position on spouses and guests just three months later, and announced that “any kind of guest” was eligible – but not retroactively to Ocasio-Cortez.

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While seemingly unfair or illogical, this approach is not unusual during anticorruption reviews – as practitioners learn early in law school, reasonable minds can differ when it comes to interpreting rules.

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Wrong public impressions

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The Committee seemed determined to include gratuitous zingers that mischaracterized the analysis that Ocasio-Cortez’s team applied. Notably, when discussing how Ocasio-Cortez’s team calculated the rental value of the dress, the report chided that “the comparison of a one-of-a-kind, custom-made designer gown to those sold commercially and rented to numerous individuals on Rent the Runway is simply inapposite.”

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While this gives the impression that Ocasio-Cortez’s staff underpaid by equating Rent the Runway prices with the rental value of the bespoke dress, the reality is more complex. Instead, data points (including prices from Rent the Runway) were used to create a formula that converted retail sale prices to one-time rental prices. If the retail price is high, so is the rental price. Media reports at the time suggested that at least some Met Gala dresses – including those worn by Emma Watson and Gisele Bündchen – had retail prices similar to the retail price attributed to Ocasio-Cortez’s dress by her team.

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This formula apparently passed muster, as the Committee also used it to determine the fair market value of the dress rental. Nevertheless, as the New York Times couldn’t resist picking up, the Committee quipped that “Representative Ocasio-Cortez’s attempt to apply a retail rental cost to a handmade couture gown was unrealistic.”

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To curry public opinion in their favor, regulators often include colorful details in describing or executing their enforcement actions, be they salacious, extravagant, or simply bizarre. Inevitably this will mean that companies subject to enforcement actions will feel that some facts are exaggerated or taken out of context, and will impact reputational risk accordingly.

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Taken together, these lessons from the AOC investigation show how unpredictable, burdensome, and reputation-sensitive an ethics review can be. But understanding the investigation is only half the story. In Part Two, we turn to the issues – conflicting incentives, control failures, and oversight gaps – that created the risk in the first place.

In several previous pieces for BriberyMatters, I have examined the links between beneficial ownership transparency (BOT) and anti-corruption, such as safeguarding government procurement, limiting business’ third-party risks, and protecting economies against the investment of ill-gotten gains. To continue this theme, I spoke with the Executive Director of the UK-based non-profit Open Ownership (OO), Thom Townsend. Our conversation was timely, coinciding with the August release of the organization’s new five-year strategy. We focused on the evolution of BOT, particularly in light of new thinking around data privacy, and what those changes mean for the fight against corruption.

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OO’s origins date to the 2016 London Anti-Corruption Summit, hosted by then-UK Prime Minister David Cameron. Townsend’s involvement in the Summit stemmed from his work as the UK Government’s Head of Data Policy, building in turn on the UK’s 2013 commitment to create a beneficial ownership registry. Following the Summit, OO was formed with the aim of creating a universal data standard for beneficial ownership, as well as to build a global registry to collect standardized ownership data; Townsend joined several years later.

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Since then, OO has had “an interesting journey,” Townsend says. “It has become evident,” he explains, “that the march of transparency isn't inevitable and, despite leadership on this from a number of countries, most notably the UK, attitudes on public access to this data has shifted.” He cites the 2022 judgement of the Court of Justice of the European Union, which as he puts it, “essentially says we don't believe public access to BOT information is aligned with the push for privacy.” But Townsend also stresses that the Court acknowledged a legitimate right to access for the media and civil society. Thus, he says, the EU is seeking a sensible balance in its access regime, citing the 2024 EU anti-money laundering directive, to be implemented in 2027.

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Such reassessment has also played out in OO’s work. Townsend says that OO no longer runs its global registry, instead seeking to make ownership data “universally adoptable yet flexible for different countries.” OO also wants to improve governments’ ability to implement BOT by engaging the actual users of information. Going forward, he thinks the BOT movement needs to shift from an access/privacy binary to a greater focus on who those information users are, what they need to access and why, as well as how the data is used in practice, and then work backwards to craft appropriate regulations. Understanding those use cases will allow governments to achieve transparency goals while ensuring data privacy, Townsend says.

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Therefore, Townsend says, OO’s new strategy will focus on five “core priorities”: 1) supporting user-centred, impactful reforms; 2) making beneficial ownership data accessible, usable, and connected; 3) embedding beneficial ownership data in key areas of public finance; 4) building the evidence base; and 5) driving global standards and cooperation. He emphasizes this point about cooperation, noting, “it is difficult for governments and civil society to tackle corruption blindfolded.” But since large-scale multilateral cooperation is challenging in the current global political climate, OO wants to focus on smaller initiatives that are more achievable.

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One case where these various themes come together is OO’s support for the Africa Beneficial Ownership Transparency Network (AfBOT), a peer-to-peer group that brings together various government officials from over a dozen African countries working on issues related to corporate registries. By focusing on domestic resource mobilization through tax receipts – which had been on the upswing prior to the pandemic – governments can not only stem outflows tied to corruption and crime, but also start to replace lost foreign assistance inflows. AfBOT can help address the challenge that while banks can see suspicious flows, they can only report to one country; the network makes information-sharing more feasible. He also offers the example of OO’s work on fishing rights in Ghana; regulations require that only Ghanaian entities can fish local waters, but BOT revealed that most Chinese-owned companies dominated the industry.

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Moving forward, Townsend has concerns that following enforcement changes in the US Corporate Transparency Act, other countries might feel less pressure to advance BOT. To that end, he has his eyes on the current and upcoming round of Financial Action Task Force (FATF) assessments. Townsend says that staying off the FATF gray list is a major motivator for countries to have some beneficial ownership disclosure regime. In particular, Townsend says, he will watch how “effective and robust” their BOT implementation processes are judged to be.

“Miami rice” — that’s what the Haitians called it: cheap, stateside-subsidized grain whose large-scale importation nearly killed the crop’s domestic cultivation. The plan — as established by the Caribbean Basin Initiative in the early 1980s — was to promote diversification of Haiti’s economy, comparable to the“structural adjustments” demanded globally by the World Bank during the next decade. Among the specific interventions in Haiti was a drastic reduction of import tariffs on rice, from a pre-initiative rate of 150% down to an eventual 3%.

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The CBI’s execution was helmed by Lawrence H. Theriot, an official at the U.S. Department of Commerce. Theriot would later go on to work for American Rice, Inc., one of the largest rice dealers in the United States. The company was originally formed as an agricultural cooperative in the late 1960s, helping to market, mill, and sell rice grown by more than 1500 member farms. In 1986, American joined forces with Comet Rice, one of the country’s oldest and largest millers, to boost sales in the face of increased competition from east Asia. It also opened a new $30 million milling and storage facility in Freeport, Texas, facilitating shipments abroad.

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American Rice’s eventual incorporation and merger with Comet provided a hedge against dependency on the middle-eastern market (its Abu Bint brand at one point accounted for 70% of the rice sold in Saudi Arabia). Nevertheless, legal and distributional problems caused significant losses by the end of 1997, leading to a Chapter 11 reorganization in October 1999. The in-between period was when company leaders — among them president Douglas Murphy and VP of Caribbean operations David Kay, along with Theriot acting as Caribbean operations consultant — arranged to evade Haiti’s already-low import taxes by underreporting the volume of rice shipments, paying customs officials to look the other way. Supposed competition with rice smugglers provided a convenient rationalization, as well as an obvious foil for the company’s public relations efforts.

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The bribery scheme would come to light during American Rice’s bankruptcy reorganization, and charges would be brought against Theriot, Murphy, and Kay. Theriot would agree to a permanent injunction and an $11,000 fine, while the other two would challenge their indictment, arguing that reducing import taxes shouldn’t count as an attempt to “obtain or retain business” under the FCPA. The appeals court, as we all know, did not agree.

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This post is part of "The FCPA Files" series, examining key enforcement cases under the Foreign Corrupt Practices Act and the lessons they offer for modern compliance.

A two-part series offered by the World Bank Group (WBG) Sanctions Board Secretariat. Part One introduces the WBG Sanctions System, outlining its call to action to protect development funds, uphold integrity, and promote good governance. Part Two addresses the WBG Sanctions Board decision-making process and the role that Multilateral Development Banks (MDBs) play in the fight against corruption.

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Part 2: Sanctions Board Decisions Reinforcing Transparency through Integrity & Global Cooperation

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Sanctions Board decisions are a hallmark of the World Bank Group’s sanctions system. Each decision offers a detailed narrative of the case, from initial allegations to the parties’ arguments. Each decision also clarifies the burden and standard of proof and explains how contextual factors influenced the final sanction.

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As a fully independent body composed of external judges, the Sanctions Board operates without direction or influence from Bank management. Its sole focus is to reach a fair determination based on the evidence – even if that means finding no liability.

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Recent decisions illustrate this transparency and impartiality:

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• In Decision 144, the Board concluded that liability for a corrupt scheme could not be extended to a corporate respondent.
• In Decision 145, the respondent’s defense was deemed sufficiently persuasive to overcome the investigators’ accusations.

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Importantly, findings of non-liability are not exonerations but often conclusions of insufficient evidence on certain key points – demonstrating that the system functions as intended. Sanctions for fraud, corruption, or other misconduct are grounded in evidence, argument, and the impartial judgment of independent decision-makers.

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The impact and value of Sanctions Board decisions is underscored by their public nature, a reflection of transparency that resonates throughout the sanctions system. Other MDBs similarly often publish their decisions or outcomes relating to sanctions, as well as the rules that govern the decisionmakers’ conduct. By publishing both the governing policies and the outcomes of individual cases, development institutions foster deterrence and build public trust.

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This transparency of process has also played a significant role in the evolution of anti-corruption standards across international institutions because it has created opportunities for mutual learning and alignment. By openly sharing investigative best practices, enforcement approaches, and sanctioning frameworks,[1] MDBs are better positioned to harmonize standards and collectively promote integrity in development financing. A key example is the agreement among five major MDBs, now in its 15th year, which allows the institutions to mutually recognize each other’s debarment actions.[2] Since signature, this Cross-Debarment Agreement has increased the scope of debarments for more than 1500 entities and individuals found liable for misconduct. At the same time, the institutions have engaged in meaningful dialogue of what defines a good business partner in development and the types of integrity compliance standards that may mitigate the risk of sanctionable practices. In 2023, the same five multilateral institutions endorsed the MDB General Principles for Business Integrity Programmes. This document is also public. These kinds of processes and standards of transparency described above continue to add value by reducing fragmentation and strengthening collective impact.

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The challenge of corruption remains a persistent global issue, but the bold and visionary stance taken by James Wolfensohn in 1996 ignited a wave of reform and innovation that continues to shape the integrity landscape of international development finance. Wolfensohn’s words not only broke a long-standing silence but galvanized a generation of professionals and institutions to build systems rooted in transparency, accountability, and justice.

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Jodi T. Glasow

Executive Secretary, The World Bank Group Sanctions Board Secretariat

Eugenia Pyntikova

Senior Counsel, The World Bank Group Sanctions Board Secretariat

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[1] See, for example, Uniform Framework for Preventing and Combating Fraud and Corruption (2006).

[2] Agreement for Mutual Enforcement of Debarment Decisions (2010)

A two-part series offered by the World Bank Group (WBG) Sanctions Board Secretariat. Part One introduces the WBG Sanctions System, outlining its call to action to protect development funds, uphold integrity, and promote good governance. Part Two addresses the WBG Sanctions Board decision-making process and the role that Multilateral Development Banks (MDBs) play in the fight against corruption.

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Part 1: A Call to Action: From Wolfensohn’s Speech to MDB Reform

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“And let's not mince words: we need to deal with the cancer of corruption.”— Former World Bank Group President James Wolfensohn, October 1996

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Since James Wolfensohn’s landmark speech in 1996, the World Bank Group (WBG) and other international financial institutions have undergone a profound transformation. By openly addressing corruption – once considered a taboo topic – Wolfensohn catalyzed a movement that continues to shape development finance today. Nearly three decades later, where do these institutions stand? Join us for a closer look at the evolution, structure, and impact of the WBG’s sanctions system.

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Wolfensohn’s “cancer of corruption” speech marked more than a turning point – it was a powerful call to action that spurred a wave of reforms across development institutions. These reforms included strengthening investigative functions, building anti-corruption capacity in partner countries, establishing institutional sanctions systems, and launching initiatives to recover stolen assets.

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Multilateral development banks (MDBs), such as the World Bank, provide financial and technical support to many countries in the pursuit of sustainable economic development. Consistent with their missions and responsibilities, the World Bank and other MDBs adopted practices such as blacklisting or “debarment” of corrupt actors who misuse development financing. These practices have historically allowed the MDBs to shield projects – and their beneficiaries – from the damaging effects of bribery. However, in their early stages, these determinations were institutional decisions of management, not subject to a formal internal system characterized by independence, due process, and transparency.

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A 2002 report by Dick Thornburgh, commissioned by the World Bank itself, emphasized the value of more formal, rule-based debarment systems. Thornburgh’s recommendations aimed to:

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• Ensure the independence and efficiency of decision-makers,
• Protect the rights of accused parties to present a meaningful defense, and
• Enhance the deterrent effect of sanctions through transparency.

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Today, the WBG has not only implemented these reforms but has also continued to refine its sanctions system into a sophisticated, balanced, and agile quasi-adjudicative mechanism.

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The WBG’s current sanctions system is designed to ensure that development funds are used as intended. It operates under a transparent framework of publicly available policies and procedures, making the system predictable and open to scrutiny.

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These policies define sanctionable misconduct, assign responsibility for investigations and decisions, and – especially in complex cases reviewed by the independent Sanctions Board – require public decisions that explain the rationale behind each outcome.

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Each case follows a lifecycle from investigation to final decision.  When misconduct is found, sanctions typically include a rehabilitation requirement before the sanctioned party can resume eligibility for Bank-financed projects.

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Up next in Part Two, we’ll explore the WBG Sanctions Board decision-making process and the role that MDBs play in the fight against corruption.

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Jodi T. Glasow

Executive Secretary, The World Bank Group Sanctions Board Secretariat

Eugenia Pyntikova

Senior Counsel, The World Bank Group Sanctions Board Secretariat

Surveys are a tool that allows compliance and ethics professionals to understand the effectiveness of an integrity program. They provide insights on how comfortable employees feel speaking up, how they view integrity successes, and identify emerging challenges. They are a way to signal that your company operates with integrity and is less of a risk for potential partners and collaborators. Paired with other monitoring tools, their insights are both powerful and essential. The information that surveys provide is vital; however, meaningful surveys must dig deep, move beyond negative feels and turn information into action.

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Surveys Can Do More Than Check a Box

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In dysfunctional compliance systems, survey results are used to meet regulatory requirements, filed and forgotten. Even worse, they are used to justify the status quo without critical analysis. Carefully examining survey results can allow compliance teams to find areas of breakdown.

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• Use Focus Groups: Conduct focus groups to ensure you have context for survey results.
• Dig Into Gaps: Look for gaps between management perceptions and team ratings to identify areas of breakdown.
• Engage in Cross-Functional Collaboration: collaborate with HR and legal teams to pinpoint root causes, develop solutions, and communicate changes.

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Fully Engage with Negative Feedback

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Engaging with all types of feedback is vital for building an effective, successful compliance system. Positive feedback should be shared and highlighted to ensure everyone knows what is working well. Negative feedback can be more challenging for everyone; it can trigger defensiveness. Ensuring that management teams respond well to negative feedback requires tamping down defensiveness and embracing transparency. Management teams may find this difficult at first, but there are steps you can take to empower managers to help give survey results meaning:

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• Filter Out Noise: Negative feedback provides context for managers; by filtering out the noise, managers can understand compliance challenges and help develop innovative responses.
• Build Trust: Use negative feedback to create new solutions that create transparency and build trus
• Empower Managers: provide support through compliance, legal, and HR teams to navigate negative feedback related to compliance.

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Shift to Action

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Once you have conducted a deep dive into survey results and empowered management teams to address negative feedback, it is time to act. Enhance survey results with meaningful change and action. Change and action build trust in compliance systems and demonstrate to an organization that integrity is valued. Action includes communicating results, updating policies and procedures, researching emerging risks, and ensuring clear communication from leadership.

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By providing a basis for action, surveys become more than a way to check a box. They provide leadership and compliance teams with information that can build trust and strengthen compliance programs.

Strategic litigation, the practice of bringing a lawsuit to catalyze some larger systemic objective, is not a new tool in the anti-corruption and anti-kleptocracy arsenal, but for a variety of reasons, it has been comparatively less utilized. However, given the decision by US Attorney General Pam Bondi to disband the Department of Justice’s “Task Force KleptoCapture, the Department’s Kleptocracy Team, and the Kleptocracy Asset Recovery Initiative,” detailed in the February 5, 2025, Memorandum “Total Elimination of Cartels and Transnational Criminal Organizations,” it is worth asking whether strategic litigation could help fill the gap the US Government is vacating.

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In its 2023 article, “Strategic litigation and its untapped potential for anti-corruption,” the U4 Anti-Corruption Resource Centre notes that while strategic litigation has been used more widely in the human rights and climate spaces, anti-corruption cases date back to 2007. A case that took nearly a decade was initiated by a complaint filed by the French NGO Sherpa that came to be known as the “Biens Mal Acquis affair.” This has been followed by instances in countries as widespread as Argentina, Nigeria, Switzerland (for corruption allegations in the Democratic Republic of Congo), Sri Lanka and more. The World Wildlife Fund and U4 have also looked at efforts at the intersection of anti-corruption and climate.

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The Basel Institute offers this guide to how NGOs seeking to engage in asset recovery might proceed. However, there are challenges facing NGOs taking this route. This piece from the UNCAC Coalition, covering a panel from the 2024 International Anti-Corruption Conference, focused on some of those. First, because the basic idea of strategic litigation for anti-corruption cases is that recovered assets can be restored to the citizens of countries that have had assets stolen, NGOs often struggle to establish legal standing, and thus cases may founder from the start. Collecting evidence in such cases may depend on the cooperation of officials in the country that was subject to asset-stripping, meaning that absent a change in government (such as a democratic transition), they may be particularly hard to pursue. Further, NGOs have to file in jurisdictions with favorable asset restitution legislation, cases can take decades, outcomes are undercertain, and the lawsuits are expensive, and donors do not often fund them.

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This is where the idea of using another tool, third-party litigation funding (TPLF), comes in. TPLF refers to when a lawsuit in which “a funder who is not a party to the lawsuit agrees to help fund it. Funders may get a pay off on their investment if the suit is successful.” As detailed in this 2021 piece from Transparency International-France, “the emergence of newly established private litigation funders dedicating all or part of their practice to sovereign asset recovery suggests that the use of private litigation funding is being actively promoted to states and is a likely growth area.” However, the author cautions that “asset recovery is not immune from the type of abuses of private litigation funding that have emerged in the international arbitration field.” Generally, TPLF is not without controversy, as it is differently regulated globally, and is oft-criticized by the business community and legal community.

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Given current political realities and enforcement priorities in the US, as Alexis Loeb of Farella Braun + Martel writes in Axing DOJ’s Kleptocracy Team Is a Boon for Foreign Bribe Takers, with respect to anti-kleptocracy and asset recovery efforts, US officials even outside the Department of Justice are unlikely to “prioritize such cases, or have the resources to do such involved investigations,” and “allies may see US law enforcement as a less dependable partner.” One person with whom I spoke for this piece noted that these changes may make governments that experience a democratic opening and are looking to recover stolen assets may feel they are on their own, without US support from regulators, diplomats, investigators and courts. By the same token, strategic litigation remains a vital tool, and in countries undergoing democratic transition, asset recovery lawsuits could potentially help bridge the funding gap left by cuts to foreign aid, allowing recovered assets to meet immediate needs and long-term development goals.

Question: My company's HR team has been given some recent directives and have come to the compliance team for help, as their goals are similar to that of the compliance team. How can we align our department directives to ensure that we are not overstepping, but also that we are not doubling our workload.

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Answer:

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What a great question! It is becomingly increasingly clear that compliance obligations are expanding and thus aligning with the obligations of other departments more often. Suddenly, risks regarding working with third parties becomes a data security risk, a contracts risk, and a compliance risk all at one time. So, what can be done to help all of your departments to synchronize your efforts?

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Start by meeting with each of these departments to determine procedures. There are likely processes within other teams that can embed compliance processes as well. For example:

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• Onboarding questionnaires - add in questions that can align with compliance obligations to reduce the number of questionnaires required
• Policies and attestations - consider using one system, like an LMS for example, for employees or third parties to read policies and attest to all at once, in one place, so that HR and other teams can reduce the time chasing for documentation
• Align training timelines - it might make sense to create a "training week" at your company. Develop a theme for the week to launch all eLearning together. Build out a fun activity when training is completed and hand out snacks. For remote workers, send coffee shop e-gift cards when training has been completed. Hand out prizes for "top scorers" and/or mention them in a company newsletter. This could help to make training fun and more engaging, and ensure that all training goals are met at one time, avoiding overlapping with busy times for the financial team, sales team, etc.

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Simple steps can help all of your compliance goals to align with other departments and reduce the time spent on administrative tasks, allowing all teams to focus on more important and pressing matters.

Leveraging SMES compliance and integrity advantages is both strategic and necessary for MNCs. MNCs have large and uniform integrity programs that drive compliance. However, Home Office compliance teams may be slower to respond to emerging risks. SMEs can help MNCs improve their knowledge and response time to emerging risks as they have agility, a local perspective, and can serve as an early warning system for MNC integrity systems.

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Reciprocal Relationships MNCs and SMEs

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The relationship between MNCs and SMEs can yield powerful results when the relationship is reciprocal. SMEs need MNCs and MNCs need SMEs. MNCs can build a web of relationships that provides both an in-depth understanding of local dynamics while building credibility with local authorities and regulators. SMEs can access established integrity systems, formalized polices, and the reputational boost that comes with being a part of a company with strong integrity systems. In this relationship, MNCs are the “backbone” that lower risk and set system standards, while SMEs serve as the system’s “eyes and ears.”

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Making this relationship work requires a shift in mindset. Global business often sees SMEs as a compliance risk, rather than a compliance partner. While there is always a risk in collaborating with a partner, there is also value. Shifting to a mindset that balances the risk and value allows SMEs to become compliance champions capable of enhancing and multiplying ethics and compliance standards. In the SME-MNC compliance dynamic MNCs can enhance SME advantages by committing to building SME capacity. This commitment can result in a dynamic integrity system that is both practical and sustainable over time.

Here are simple ways to build SME capacity:

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• Deliver practical, locally relevant compliance training that addresses potential risks that SMEs face.
• Create simple and accessible reporting and feedback channels that allow SMEs to flag changes in the local environment or raise concerns.
• Act quickly on SME insights and communicate outcomes to help reinforce the MNC-SME relationship.
• Share Resources and ensure SMEs have access to compliance templates and tools.
• Publicly acknowledge SME partners who exceed compliance expectations.

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In complex global markets, MNCs need SME partners who can deliver consistent and reliable responses to evolving compliance risks. SMEs have unique tools and networks that enable them to meet this need. Viewing SMEs as a compliance advantage and building SME capacity will allow MNCs to lower risks, build compliance partners, and extend ethical business practices throughout their supply chain.

The compliance field often positions small and medium enterprises (SMEs) as too small for compliance. MNCs may view SMEs as high risk and the weakest link in a compliance program. This series will challenge that perspective by building off discussions on how SMEs can build imperfect integrity programs and thrive while building integrity into their operations with fewer resources. And will take an in-depth look at how SMEs engage in effective compliance and build meaningful integrity programs.

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SME Advantages: Agility, Visible Leadership & Local Connections

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The truth is that SMEs may lack resources to have integrity programs that are comparable to those supported by MNCs, but they have built-in compliance advantages. They are agile, leadership is visible, and they have deep local connections. That make SMEs uniquely qualified to develop/engage in compliance programs that reflect their actual risks and values. These advantages are easy to miss if you are striving for a perfect compliance program or assume that only large multinational-style systems are “real” compliance.

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• Ability to Act & Adjust
• SMEs can move quickly. They can create new policies, processes, and adapt training without the delays that can slow down larger companies. Their agility creates space for innovation and iteration, and allows SMEs to adjust if something is not working quickly.
• Visible Integrity Leadership
• SME leadership is often more visible and closer to the daily work. Their visibility and proximity to the work means that they have a deeper understanding of integrity challenges. It also means that SME leadership can demonstrate their commitment and dedication to ethics/integrity, which is visible, personal, and most importantly, consistent. SMEs’ leadership can reinforce an integrity culture and communicate expectations in informal and formal contexts.
• Awareness of Local Risk & Norms
• SMEs are also deeply connected to their local communities. They are often part of the fabric of a community where they operate, and their reputation matters. Their deep connections and knowledge of their communities allow them to quickly identify emerging risks, navigate relationships, and pick up on nuances that a headquarters compliance team may miss.
• Freedom to Design Practical Policies
• SMES do not need to overdesign programs. They can develop clear rules, reporting pathways, and publicly commit to being a responsible business, which align with their values, behavior, and business priorities.

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Focusing on SMEs’ compliance advantages allows us to recognize that SMEs are essential and powerful partners in corporate integrity systems. The remainder of this series will challenge the assumption that SMEs’ compliance is only for large companies and highlight the compliance and integrity advantages built into SMEs.

Strong corporate governance, business ethics and robust compliance, underpinned by clear laws and effective enforcement, are critical to combat corruption. However, in its seminal 2008 Fighting Corruption through Collective Action: A Guide for Business, the World Bank Institute documented “a third area”: tools “that allow companies to come together collectively and voluntarily to raise practice standards and to reduce corruption,” including “integrity pacts… codes of conduct and collective public policy initiatives.” By uniting its efforts, the private sector can increase the effectiveness of companies’ internal practices and the regulatory framework.

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Since 2008, approaches have grown more sophisticated, thanks to players such as the UN Global Compact, the Basel Institute on Governance and its B20 Collective Action Hub, and the Anti-Corruption Collective Action Impact Centre at the International Anti-Corruption Academy. As the field matures, it is important to consider, as the Basel Institute asks in its March 2025 paper Anti-Corruption Collective Action: A Typology for a New Era, “how these commitments can be translated into practice” and avoid collective action “becoming a tick-box exercise”.

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In light of the new FCPA enforcement landscape and reduced foreign aid, I wanted to explore whether collective action can help fill the anti-corruption gap. To that end, I spoke with Brook Horowitz, CEO of IBLF Global, an NGO that engages with governments, multinationals and SMEs worldwide to raise standards and create a culture of private sector integrity. In 2013, as a knowledge partner of the B20 Anticorruption Task Force, IBLF Global co-authored with the Basel Institute the study “Design and Enforcement of Voluntary Anti Corruption Agreements in the Private Sector,” advocating for collective action approaches, and has since advanced collective action initiatives in emerging markets.  

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Horowitz does believe that collective action is an effective way for the private sector to counter corruption, having seen the impact even in challenging markets. “While in highly corrupt environments, these efforts may not fundamentally change the overall landscape,” he says, “in certain circumstances, they can provide a minimum standard by which companies agree to operate and cooperate.” Even in Russia and China from 2010-2013, Horowitz says, companies could engage with one other and the public sector to advance responsible business practices.

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He offers the example of his work in the healthcare sector in Russia in 2010, when IBLF Global convened the leading diagnostic equipment manufacturers  to develop a sectoral code of conduct. Additionally, in Vietnam from 2015-2019, IBLF Global supported the Vietnam Chamber of Commerce and the government’s anticorruption watchdog in a dialogue between SMEs and public officials, which eventually became a recognized government/business integrity initiative. But by the same token, Horowitz points out that collective action is not a panacea. The "strength in numbers” approach might ease concerns of companies about taking a public position, but officials may still target individual firms. Further, political dynamics can swiftly alter the landscape, as was demonstrated in Russia and China after 2013, and in Vietnam after 2019.

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Now, despite pressures to the contrary, many companies are still seeking to promote ethical and sustainable ways of doing business. Even as the term “ESG” falls out of favor, he notes, companies recognize that without the “G,” their investments risk becoming ineffective or unsustainable, or even harmful to their interests. For that reason, Horowitz is focusing on working with companies that have committed to building a safer, healthier and more equitable world. Together with IBLF Global trustee Dr. Jan Dauman, he has brought together a team of researchers from IBLF Global and the UCL Centre for Sustainable Business on a project commissioned and led by Transparency International UK and British Investment International, to develop business integrity metrics and indicators for impact investors. As Horowitz puts it, “without sound governance, corporate green initiatives will be ‘gone with the wind.”

Earlier this month, the U.S. Department of Justice agreed not to prosecute Liberty Mutual Insurance Company despite evidence that its subsidiary paid nearly $1.5 million in bribes to officers of six state-owned banks in India. As part of the declination agreement, Liberty Mutual enhanced its compliance program, and agreed to disgorge profits.

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The bribes, made between 2017 and 2022, were connected to insurance business that resulted in $9.2 million in revenue and $4.7 million in profits.

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This is the first public corporate resolution involving the Foreign Corrupt Practices Act under President Donald Trump’s second administration, and comes shortly after the DOJ issued guidance that arguably narrowed the focus of such investigations. Among other factors, the guidance calls on prosecutors to consider whether the bribes put “law-abiding competitors, including U.S. companies, at a serious economic disadvantage.”

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However, the resolution largely resembles declination agreements made under prior DOJ guidance, such as with Boston Consulting Group, and does not allege facts that align with the priorities spelled out in the more recent memorandum.

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As one commentator pointed out, “While declinations are coveted by defense lawyers for eliminating a company’s criminal exposure, the department managed stricter terms for Liberty Mutual than had it outright closed the investigation.”

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The DOJ could have simply closed its investigation into Liberty Mutual

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Given that American companies are still minor players in the Indian insurance market, where bribes and kickbacks are seen as “routine business practices,” it’s not clear if or how the bribes harmed an already degraded competitive environment.

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Moreover, the Indian entity is arguably not, in fact, a subsidiary of Liberty Mutual, and its employees may not be agents of the U.S. insurer. This is because, during most of the period that the bribes were paid, Indian law required insurance companies to be “Indian owned and controlled.” Foreign companies could not own more than 49 percent of an insurance company, and were limited in the number and type of board appointments they could make. Liberty Mutual still only owns a minority stake in the Indian entity, which began as a joint venture with a local majority owner (who later sold its stake to two other companies).

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Coupled with the fact that the payments were spread out over multiple recipients and years, and that insurance distribution in India is heavily reliant on third parties (Liberty Mutual’s India entity currently uses nearly 20,000 brokers and agents), Liberty Mutual might have been able to make a strong argument that it neither authorized nor reasonably could have known about the corrupt payments.

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But time may have been a factor

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Accepting a declination, however, may have been a strategic move that favored certainty and time over a Pyrrhic victory that costs more to shepherd than to settle. While the DOJ and SEC have dropped certain FCPA reviews in recent months, those cases involve long-running investigations, including with substantial prosecutorial burdens.

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For instance, in May of 2025, the SEC and DOJ closed their investigation of potential FCPA violations in China by GE HealthCare. But the review had been going on for seven years. Recently dropped cases against two former Cognizant Technology Solutions executives had similarly been ongoing since 2019, and included considerable roadblocks to obtaining evidence. For regulators, the decisions to close these cases may have been influenced by the desire to “cut loss” – which is less of a factor with the Liberty Mutual investigation.

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Indeed, where the Liberty Mutual declination truly does stand out is in its timeline – Liberty Mutual self-reported the potential FCPA violation in March 2024, meaning the investigation was resolved in about 17 months. The BCG investigation, by contrast, appears to have gone on for nearly five years.

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A well-scoped internal investigation might have saved the day

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The DOJ’s declination letter indicates that the payments were “identified during an internal investigation that was still ongoing at the time of the disclosure.” Prompt self-disclosure is a critical component in receiving a declination.

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Of course, what triggered the investigation is not publicly known. There may have been a broader sweep of third parties following the corruption conviction of an agent connected to its Singapore business in 2021, or it could have been a more targeted review following the 2022 arrest of its former joint venture partner. Whatever the push, Liberty Mutual’s compliance program could not have boiled the proverbial ocean by reviewing every payment by every affiliate over every year.

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Here, the investigation was scoped broadly enough to capture these payments, but was likewise narrow enough to yield timely insights.

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Bottom line

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Despite fears to the contrary, there is no indication that regulators are only enforcing anticorruption laws along narrow lines. But there are signs that they are continuing to make progress in encouraging corporate cooperation.

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As discussed in TRACE International’s white paper Voluntary Disclosure Under the Foreign Corrupt Practices Act, two of the biggest deterrents to self-reporting a potential FCPA violation are the long investigation period, and the prospect of “scope creep,” i.e., the regulator “look[ing] across to other areas for potential control failures.” The Liberty Mutual declination signals a promising development in this regard, given its unusually speedy resolution.

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For risk and compliance professionals, this is all the more reason to maintain a well-tuned monitoring and investigation function.

Question: As compliance goals are shifting, how do you make pivots to still meet the needs of the organization, even as directives may be changing?

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Answer:

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Thankfully, technology can help with many of these pivots in compliance plans—keeping you on track and efficient—allowing time to still focus on pressing compliance concerns throughout the year.

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• Training
• If you are planning to launch training, there are features within most LMS systems that allow for recurring enrollments, so that you are not stuck with the administrative task of enrolling learners into training each time a course is needed. The TRACE LMS is a great option to set up semi-annual training on a number of compliance topics.
• Outreach and Communication
• Using your internal intranet or email platforms, you can also create compliance communications in advance, and set them up for delivery throughout the year. If there is an important compliance message that should be addressed, you can use Outlook’s “delay delivery” option to send out a compliance alert at a given date and time, Always remember to check for holidays and large company deadlines!
• For real time pivots in compliance, use your conference calling system to schedule an in-person town hall meeting with colleagues, sharing updates and compliance insights. Record the session and send it to anyone who was unable to attend the meeting live.
• Auditing
• If you need to check that your messaging and training is driving your compliance goals, use data analytics tools like Google Analytics to help you see results of your initiatives quickly and easily.
• Set up Google Analytics for your LMS, for example, to see how often people are entering the site  to learn the best times to train, and times when people tend not to be online.

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With the technology available to us in our day-to-day workplace, it makes the transition in compliance directives much easier to develop and implement. Think outside of the box and even ask other departments about their strategies, you may learn something new! Good luck!

Stephen Kingsley had a way of coming up with big and implausible plans. An Englishman living in Kansas City, reportedly experienced in the arts of marine salvage and port development, he masterminded a proposal for a massive revival of the Port of Limon on the Atlantic shore of Costa Rica, which had suffered severe damage in a 1991 earthquake. He established a group of on- and offshore companies under the name Owl Securities and Investments. The project’s aim, as pitched to would-be investors, was to build not only a new shipping facility but an entire multipurpose cargo hub and transit infrastructure, encompassing manufacturing, hotels, a cruise terminal, agricultural enterprises, an airport, and a cross-country rail line that would compete with the neighboring Panama Canal.

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The vision was ambitious, even grandiose. At a minimum It would cost hundreds of millions of dollars and occupy 50 square miles of land. Still, they didn’t seem to have much seed money backing them, instead aiming to finance the project with the contributions of individual investors (deemed “joint venture” partners to get around a 1994 cease-and-desist order against selling unregistered securities). The presentation materials were unusually forthright in explaining that a significant portion of the funds would be shared with local government officials and politicians to ensure the necessary land concession. Discussions with investors were quite explicit and precise — the “toll” was originally going to be one million dollars, then was increased another fifty percent to cover the possibility of a post-election change in ruling party.

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In fact, the fundraising scheme never brought in more than about $3.5 million in toto, a good portion of which went to supporting Kingsley’s personal indulgences — particularly strippers and strip clubs. By the end of it Kingsley was wearing a wire for the FBI, and two other high-level participants were cooperating witnesses. One investor, Robert King, went to trial and was ultimately sentenced to 30 months in jail and a $60,000 fine. (His assertion of outrageous government conduct was rejected by the Third Circuit.) The cooperating CFO, Richard Halford, got off with probation, and the VP, Albert Reitz, received six months house arrest and a thousand hours of community service. Kingsley himself, in one final misguided scheme, tried to evade punishment by staging his own kidnapping, but ended up dead, ankles bound with duct tape, on the banks of the Missouri River.

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This post is part of "The FCPA Files" series, examining key enforcement cases under the Foreign Corrupt Practices Act and the lessons they offer for modern compliance.

In a previous piece about my conversation with Leslie Tsai, Director of Integrity Programs at the Chandler Foundation, I covered the Foundation’s unique anti-corruption work with the International Monetary Fund. In this second of this two-part series, I share some of Tsai’s broader reflections about how to increase collaboration between the anti-corruption community and philanthropists.

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Tsai situated the Foundation’s approach in the experience of its donor, Richard Chandler, the New Zealand-born investor and entrepreneur, working in developing nations at a time of political and economic liberalization. Through his investments, Chandler saw the negative impact of corruption on national development, and recognized that good governance and integrity are keys to building shared prosperity. That thinking shaped an evolution that Tsai has seen since joining the Foundation in 2016, as grantmaking to what she terms “basic needs sectors” shifted to greater operational work with governments and multilaterals on governance and anti-corruption issues.

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Tsai points out that even when governments are well-meaning and want to enact governance reforms, they do not always have the capacity and capability to do so. Thus the Foundation augments its work with governments by continuing to support certain government and civil society efforts, coupled with targeted capacity building. For example, she noted, the Chandler Institute of Justice was recently formed to provide support to governments in drafting and advancing effective laws and regulations, and the Chandler Institute of Governance works with governments to support a strong public sector.

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Tsai would like to see more philanthropy in anticorruption, but she thinks foundations are not following suit because it can be difficult for a philanthropist “to start the giving journey on these issues.” Fighting corruption and improving governance are usually “not what comes to mind when trying to tackle poverty or inequality.” She notes that many philanthropists prefer to fund basic needs because they want to see faster impact. Supporting systems change and tackling root causes is a long-term effort, requiring a great deal of patience; moreover, the results of the work can be unpredictable. Tsai told me that over the years, the Chandler Foundation has had some success pulling in other philanthropists, but recent cuts to international aid and domestic social spending will make the challenge more acute, as foundations feel pressure to fill the gap. Moreover, while some foundations are now shifting to look at systemic issues, much of that funding is trending toward addressing issues such as closing civic space.

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Ultimately though, Tsai believes that where aid and basic social services are being cut, it is even more critical to address underlying systems. She thinks that eventually, the foundations that invest in fighting poverty, improving education or health, or other causes – particularly given the current cuts – will realize that good governance not only makes social services and aid more efficient and effective, it also enables lasting, sustainable solutions to the issues that services and aid are designed to tackle.

As a general rule, private foundations are less active in anti-corruption and governance than in spheres such as culture, education, health and entrepreneurship, to name a few. One exception is the Chandler Foundation, established in 2013, with a vision of building cultures of integrity and high trust across government, the market, and communities. I spoke recently with Director of Integrity Programs Leslie Tsai to learn about one of the Foundation’s efforts: engaging the International Monetary Fund (IMF) to advance anti-corruption reforms.

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Though one of the world’s most critical economic institutions, the IMF took some time to embrace the importance of anti-corruption. The IMF established a baseline for addressing governance with its 1997 Guidance Note “The Role of the IMF in Governance Issues.” In the 2018 “Review of 1997 Guidance Note on Governance - A Proposed Framework for Enhanced Fund Engagement,” the Fund undertook a “more systematic, effective, and candid engagement with member countries regarding those governance vulnerabilities, including corruption, that are judged to be macroeconomically critical,” seeking “to strengthen the global fight against corruption by promoting governmental measures that prevent private actors from offering bribes or providing services that enable the proceeds of corrupt acts to be concealed”.

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That document, under the IMF’s Governance and Anti-Corruption program, informs that Fund’s Governance Diagnostics, “in-depth, country-tailored assessments of corruption and governance vulnerabilities.” Since 2018, the IMF has finalized 21 country reports, conducted by a legal team focused on governance and anti-corruption. While the recommendations in Governance Diagnostics are not mandatory, a handful of the recommendations are sometimes incorporated into IMF programs as loan conditionalities.

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One challenge, Tsai notes, was how to get the “ground knowledge” of local governance deficiencies into the hands of the IMF. While the IMF usually interfaces with the government, citizens and civil society organizations are best positioned to share the realities and actual impact of IMF-recommended legal and policy reforms. However, in Tsai’s view, the IMF’s engagement with civil society is often surface level, typically prioritizing the government’s perspective. This is where the Chandler Foundation comes in. Tsai explained that Chandler’s understanding of the IMF took some “research and navigating” to establish, but now the Foundation leverages its power, connections, and reputational capital to be a neutral broker in approaching the IMF, to raise awareness of Governance Diagnostics with civil society, and to elevate the voices of those groups to bring reform recommendations to the IMF’s attention.

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Tsai offered Zambia as a case in which this behind-the-scenes process played out: civil society had been advocating for an access to information law for almost a decade, but had not been passed. Such a law was also an unmet requirement for Zambia to join the Open Government Partnership (OGP) and develop a National Action Plan (NAP). However, when the IMF included the passage of the law as a loan conditionality, the law was soon proposed and ratified.

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The Foundation next commissioned a report by TI-Zambia that assessed implementation progress of the IMF’s Governance Diagnostic recommendations, which found that while the access to information law passed, it has had no impact on the ground, due to the lack of regulations and guidelines for accessing information under the act. The NAP thus offers another opportunity for the government to get access to information about reforms right, Tsai says. As Zambia develops its NAP through a multistakeholder process, including the government, civil society, and the business community, these stakeholder groups are working together to ensure that reforms like access to information are achieved and have impact across society.

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As Tsai points out, many IMF-recommended anti-corruption reforms remain voluntary, since an IMF program “can only have so many conditionalities, and most focus on fiscal policy and macroeconomics.” But with time, given that the Governance Diagnostics are quite thorough, she thinks an increased push can be made to tie long-term macroeconomic stability to governance reforms, citing increased emphasis on debt, procurement, and beneficial ownership transparency. She also believes that an increased focus on governance will help limit the need to make drastic cuts in social safety net spending, cushioning the burden of adjustment, in turn overcoming citizens’ resistance to IMF loans.

Compliance teams operating globally must navigate both international anti-corruption regulations and local laws. The UK Bribery Act and the Foreign Corrupt Practices Act (FCPA) provide bright-line rules. However, real world interactions are often more complex and do not neatly align with rules. In some places, offering a small favor or a gift is a sign of hospitality and respect, not an attempt to create undue influence. The context truly determines whether a gesture aligns with cultural norms or is an attempt to create undue influence. Customary gestures might raise yellow flags for an auditor. However, in-country teams may feel tension between honoring tradition and following policy.

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Consider a regional distributor who regularly hosts community members, including government employees, at sports events. These events support the local community and allow the business to build meaningful relationships. However, the sports events develop beyond supporting the local community to providing government officials with meals, transportation, and overnight stays. What may have started as a unique opportunity to engage the community evolved into potential bribery.

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The scenario lives in what is often called “the gray zone.” There is no red or flashing yellow light in the gray zone; it is a mix of tradition, expectation, and potential missteps. The distributor’s intention was to support the community, but the outcome gave the impression that the company wanted to influence government officials.

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Navigating the Gray Zone

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Shutting down local customs or implementing rigid interpretations is not likely to lower the risk. The most effective compliance teams work with nuance and maintain integrity. Here’s how:

1. Stop and Ask Questions
2. If something feels off, then stop and ask: What is the purpose? Who does this gift go to? Are there other contexts where this is okay? The key is not rushing into a judgment or approval but rather understanding the context and making an informed decision.
3. Contextual Risk Mapping
4. Build local traditions and customs into your risk profile. Collaborate with regional teams to learn the difference between a symbolic gesture (ex. supporting a local team) and a red flag (ex. taking government officials on elaborate sports trips).
5. Empower with Clarity
6. Provide local teams with practical tools, design training with realistic scenarios, create decision trees, and establish gift and hospitality thresholds. Compliance is simpler with understanding; if teams understand what they need to do and why, then they are more likely to follow policy.

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Lead Through the Gray Zone

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Effective compliance programs do more than translate policies into different languages. They consider the context and arrive at nuanced solutions. Compliance need not police cultural norms; it should ensure ethical standards in all contexts.

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Compliance professionals must simultaneously hold the line on corruption and balance global business practices. Creating effective global compliance systems means listening to understand, engaging in creative training, and arriving at nuanced solutions. Great compliance professionals do not just identify the gray zone; they also lead through it.

The Role of Informality

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Small and medium enterprises (SMEs) are part of Mexico’s economy. They operate in an environment where formal control systems exist alongside informal cash transactions, verbal agreements, and personal networks. Like many SMEs in emerging markets, Mexican SMEs must strive to maintain integrity while under pressure. For some, informality is a shortcut, but for SMEs, it’s a path to stay in business.

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Operating as a formal business can be challenging. Mexican SMEs lack the resources and access to credit needed for growth. Bureaucratic red tape adds to this complexity, as it creates delays, establishes a role for fixers, and makes shortcuts that violate anti-corruption norms attractive. In this context, compliance is not only expensive; it is also optional.

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Caught Between Corruption and Survival

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Many Mexican SMEs navigate small ethical challenges daily - a delayed permit, suppliers seeking out flexible suppliers, or demanding an informal payment. These are not extreme cases but everyday challenges. Without formal compliance systems, many SMEs navigate these challenges on instinct. Refusing to agree to these informal methods of operation can result in losing access to the income a small business provides.

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I recently connected with SMEs in Mexico and had the opportunity to discuss their challenges. I discovered that across Mexico, SMEs are choosing a different path, which serves as an example to SMEs within the region. Let’s look at what’s working in Mexico and imagine how Mexican SMEs can serve as an example to SMEs in Latin America.  

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1. Collective Action
2. Mexican SMEs are learning the power of numbers and collaborating through trade organizations or business associations. Collective action allows SMEs to speak up as a group and decrease individual risk.
3. Lean Integrity Tools
4. SMEs have developed tools with short, easy-to-follow codes of conduct and simplified know-your-customer checklists for suppliers, which rely on technology (e.g. WhatsApp channels) for communicating ethical concerns, and which do not require a full-blown compliance team.
5. Integrity Initiatives for SMEs
6. Local chambers of commerce and nonprofit coalitions understand that SMEs are part of the economy and have begun collaborating to provide training designed specifically for SMEs.

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Mexico as a Regional Mirror

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Mexico has a unique context. However, the prevalence of informal systems, weak enforcement, and unclear boundaries between public/private interests are common challenges throughout Latin America. The decision on whether to pay a bribe or lose a deal is not exclusive to Mexico - it is a shared challenge.

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Supporting SMEs in Mexico and the region involves creating an approach tailored for SMEs. Support means listening to their unique challenges, amplifying their efforts, and enabling SMEs to understand the long-term benefits of ethics for growth. In Mexico and the region, SMEs carry the greatest burden. Fortunately, they also hold the potential to drive change in Latin America.

Question: With AI taking over so many tasks in terms of script and content creation, will learning and development teams be a thing of the past?

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Answer:

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What a great question! And a very valid, and sometimes daunting one, at that.

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But rest assured that even with the use of AI, learning and development teams will become more vital than ever before.

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Where we will see a shift is the role that the learning and development team will play alongside their latest "team member," Artificial Intelligence (AI).

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AI can be an excellent partner in assisting with script-writing, even quickly generating content from a script, saving time and labor costs for your organization.

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But AI needs the expertise of the learning and development team to create content that is fully accurate, well structured, and suited to its audience.

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Learning and development skills are honed with experience, and often trial and error. AI must also learn from the learning and development team, or it, too, will make mistakes. Whatever tools utilized, those tools must be studied and mastered so that the AI is prompted to share the correct information when creating a script or generating content. Asking the wrong questions, or giving incorrect prompts will lead to incorrect course content. Leaving more work for everyone and reducing efficiency overall.

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When creating content, AI also needs to understand the audience to whom the training will be administered, their level of understanding of the content, and what the goals are for the audience once the training is completed. Without these details, any training will fall flat. Developing a storyboard and gathering internal organizational policies, regulations, and data will help the AI tool to learn more about the content and how to best develop a course. The L&D team can then work with the AI to flag when policies or regulations change so that amending content is quicker and easier.

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While developing prompts for AI, the learning and development team can also be sure to remove any implicit bias in the tool, creating content that best fits a company culture and mood. The team must help structure training to best suit their audience, without any unexpected bias in the training material. Knowing colleagues, administering training to them in the past, and hearing feedback, can set up the L&D team for success because they will know how to be sure the whole audience feels included and learns most effectively.

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In short, any L&D team using AI will take on a new set of skills. They must become the subject matter experts in prompting the AI to create the best possible content to meet company needs. This will require an adaptive L&D team, with excellent attention to detail, which so many of these teams inherently have already! By knowing a company well, knowing the internal policies, and learning a new AI tool, the L&D team will become the AI "gatekeepers," avoiding inaccurate content, and creating and updating courses to meet the needs and goals of the organization at any time.

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Of course, it goes without saying, but always check any work that is developed by an AI tool, and happy learning!

Not all compliance failures are dramatic scandals; some failures unfold slowly with small warning signs that something is awry. These signs can go unnoticed and never get addressed, especially in busy environments where teams focus on day-to-day operations. Spotting these warning signs makes all the difference for ethics and compliance professionals.

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Here are a few signs that could indicate your organization’s compliance systems are operating under strain:

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1. High Turnover in Sensitive Areas
2. Resignations and reassignments in finance, procurement, or compliance could be more than a staffing issue. The turnover may reflect a lack of ethics or a toxic internal culture. If it is hard to fill key roles, then it is time to understand this dynamic and create solutions to ensure a lower turnover rate.
3. Incidents Are Reported but Not Investigated
4. A whistleblower and reporting channel is only as strong and credible as the response system. If incidents are reported but never resolved, it signals that integrity is not a priority.
5. A Culture of Silence
6. A program cannot be effective if staff do not speak up or fear retaliation. A culture of silence and fear will impede transparency and allow misconduct to operate in the shadows.
7. Lack of Traceability
8. Missing documentation and unclear audit trails are signs of a severe weakness in internal controls. Accountability weakens when it is difficult to trace decisions and financial flows.
9. Excel is Doing Too Much
10. Spreadsheets are powerful tools. However, they are not the backbone of a compliance program. If spreadsheets are multitasking as compliance reporting, due diligence tracking, and risk monitoring tools, it is a sign that your integrity systems lack controls and integration.

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Pay Attention to the Warning Signs

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These signs alone do not indicate that your compliance program is failing, but they do point to system gaps that need attention. As you address these gaps, ask these questions:

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• Do these issues make up a pattern, or are they isolated?
• Are staff confident enough to report concerns and that action will be taken?
• Do you need new tools that address your current risks?

Integrity can erode slowly over time. It can start with small cracks that widen over time. Paying attention to these small cracks will allow compliance leadership to reinforce ethics culture or revamp outdated systems. The best compliance programs create environments where misconduct is less likely to happen, and paying attention to these early warning signs can ensure that your integrity programs function at a high level.

The implications for the fight against corruption stemming from potential FCPA enforcement changes were examined meticulously in these pages. To situate these changes within the broader framework of business ethics, I spoke recently with Alison Taylor, Clinical Associate Professor at NYU Stern School of Business, former Executive Director of Ethical Systems, and author of 2024’s acclaimed Higher Ground: How Business Can Do the Right Thing in a Turbulent World. Note that my conversation with Alison took place before the June 9 release of the new FCPA Guidelines.

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Writing for Bribery Matters in March of 2024, A Zero-Tolerance Policy Can Only Go So Far, Taylor pointed out that in spite of the FCPA, “corporate bribery scandals continue, and corruption as a societal challenge remains unresolved” and that while “essential,” a compliance-based approach is “insufficient to tackle the wider challenges of corruption.” In that piece, she urged companies to examine their internal incentive systems, and to address the challenges of doing business in kleptocracies, or where corruption comes with the risk of violence or extortion. When I spoke with Taylor, she also pointed out that white collar crime enforcement has decreased, and that the government has mostly gone after small firms. She further noted that FCPA cases are often difficult and expensive to pursue, and the complexities can be hard for juries to follow.

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By the same token, she told me that she did not anticipate the decision to review the FCPA enforcement guidelines. She notes that the law had never been an “obvious source of partisan division,” and that the current Administration may have “misunderstood the business case” in favor of anti-corruption efforts, as well as “overestimate[ed] the degree to which companies wanted” changes. It is possible, she speculates, that the Administration “thought it would be welcome by the financial services industry,” in particular. She says the Administration may have “overestimated the norm shift.” While they awaited the new guidance, she says, far from being excited, companies were “not celebrating,” and did not “welcome changes,” due to the inconsistency and uncertainty. She draws a contrast with the backlash against ESG and stakeholder capitalism, which she viewed as “predictable,” as she wrote in Bloomberg here: ESG’s Rhetoric Doesn’t Match Its Reality. Along those lines, she told me she is not surprised by Europe’s vote to delay the implementation of CSRD and CS3D, situating the vote as part of the larger ESG pushback, amid a sense that the EU tends to overregulate.

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Again, as we had not seen the new guidance when we spoke, I was curious about her views on how companies might react if the FCPA were weakened. She noted that even if they wanted to, most would struggle to dismantle their compliance infrastructure. Before making any changes, firms would have conducted assessments of their compliance budgets, services and staffing levels. Now we have seen the guidance, which clearly acknowledges why corruption is bad for business, aligning with the understanding among companies, as Taylor put it, that “the problem with bribes is you can't get your money back; if you signal that you pay, you will be hit up again and again; and that corruption is inflationary.” While companies pay attention to signals and are sensitive to reputational risk, she says, they tend not to take stands on the issue of corruption. Even from the reputation point of view, she noted that it will be interesting to see whether companies ever decide to re-enter the Russian market at some point in the future.

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On the other hand, Taylor expressed concern that some industries which at times have been resistant to anti-corruption compliance and regulation – citing the pharmaceutical sector in particular – might take this moment as a sought-after respite. With respect to the EU Anti-Corruption Directive and the new UK, French and Swiss anticorruption alliance, she feels that “anything that helps with extraterritoriality and coordination is welcome.” But she shared her concern at the time we spoke about effectiveness without the US on the scene; in fact, now we know that the new guidance indicates that the US will only engage in investigations where US interests are directly implicated. Last, she noted concern about companies in newer industries, such as crypto and AI, operating in a kind of governance, regulatory and ethical “Wild West.” All in all, Taylor thinks it is still too early to know the impact of the new FCPA landscape, saying we should “check back this time next year.”

Non-governmental organizations (NGOs) are not always considered in the world of compliance. But what if NGOs were considered as strategic allies? NGOs are allies that bring local knowledge, community trust, and issue-specific expertise that businesses often lack. In today’s complex risk environment, many NGOs, including business associations, worker groups, and community-based groups, can be essential partners in creating ecosystems of integrity. This is especially true for companies operating in high-risk markets with complex supply chains. The right partnership can offer practical value.

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NGOs' Insights Extend the Reach of Traditional Compliance

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NGOs have clear missions, but they also have real connections in the spaces they operate in. Their knowledge is valuable and may provide insight into risks that traditional compliance does not have. For example, workers’ rights organizations often uncover forced labor issues in factories that pass formal audits. Environmental groups can also use data collected on the ground to expose deforestation in protected areas. When traditional compliance ends, NGO insights begin. NGO insights provide context and can reveal blind spots. When relationships are properly cultivated, this becomes an asset for companies.

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Building a New Mindset

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The relationship between NGOs and companies can sometimes be tense. Some NGOs were created to challenge corporations, while others aim to collaborate with businesses toward shared goals. Recognizing and understanding this difference is key. Collaboration does not mean collusion; it means proactive prevention. When the goal is to create a long-term ecosystem of integrity, prevention is a better strategy than crisis response. However, this requires trust.

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Building trust starts with transparency. Building trust takes time, but these are ways to begin the process:

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• Formalize collaboration with MOUs;
• Agree on how and when data will be shared;
• Establish collaborative ethics training initiatives;
• Invite NGOs to provide comments on new ethics and compliance protocols; and
• Include NGO insights in annual risk assessments.

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These sorts of steps create accountability for both the company and the NGO. In a complex risk landscape, unlikely allies can be the strongest integrity partners. By thinking beyond traditional compliance boundaries and collaborating with NGOs as partners, companies can enhance due diligence and credibility, and build stronger systems to prevent corruption and promote ethical business.

The Urabá region of Colombia is a nearly impenetrable thicket of jungle and rainforest. It constitutes part of the Darian Gap, the only break in the Pan-American Highway and a treacherous passage for north-bound migrants. Remote and politically volatile, the region has served as a haven for left-wing guerrillas and right-wing paramilitaries alike.

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It also includes vast stretches of fertile soil, perfect for growing the domestically important crop of bananas, initially exploited at scale in the “banana boom” of the 1960s. Leading that development was the United Fruit Company, later renamed Chiquita Brands International. The company already had a notorious history in Colombia, having been at the center of 1928’s strike-breaking “Banana Massacre” fictionally immortalized in Gabriel García Márquez’s masterpiece One Hundred Years of Solitude.

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Traffic to and from the region takes one of two routes: either along the road to Medellin built in the 1960s or through the port of Turbo on the West Atlantic’s Gulf of Urabá. Throughout the 1990s the port was largely controlled by Chiquita’s subsidiary Banadex, which used it to export bananas and import fertilizers, fungicides, and other supplies. In 1993, the Colombian government granted Banadex a license to use its loading facility as a special customs zone in which goods could be held while awaiting import clearance. It was in connection with the renewal of this license in 1995 that Banadex found itself making a $30,000 bribe, for which Chiquita ended up paying a $100,000 civil penalty in a 2001 SEC enforcement action.

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The bribe was the least of Chiquita’s concerns in Urabá. Since the late 1980s, the company had been making payments to FARC (“Fuerzas Armadas Revolucionarias de Colombia”) and other guerrilla groups, whether in exchange for security services or in response to simple extortion. In the mid-1990s, its political alignment flipped and it began contributing to the right-wing militias, operating in the guise of “Conviver” mutual defense leagues under a program endorsed by the state’s governor Álvaro Uribe Velez, who would later become Colombia’s president. The company’s support allegedly included facilitating the smuggling of thousands of AK-47s for the paramilitaries in late 2001. In 2007, Chiquita pleaded guilty in a U.S. court to transacting with a designated terrorist organization and penalized $25 million, and was held civilly liable to victims of the paramilitary groups in 2024 to the tune of another $38.3 million.

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This post is part of "The FCPA Files" series, examining key enforcement cases under the Foreign Corrupt Practices Act and the lessons they offer for modern compliance.

Following decades of increasing globalization, the world’s economy has been shifting toward more economic nationalism. Markers thereof include the return of industrial policy, reshoring and so-called “friendshoring,” the imposition of new tariffs, and more. While debating the relative merits and drawbacks of such policies is not for these pages, it is worth exploring here how these trends impact the fight against corruption.

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In this piece, I explore one tool in particular: investment screening, drawing on a conversation with John Kay, Head of Programmes and Strategic Partnerships at the CELIS Institute. The CELIS Institute was established in 2020 as a successor to the International Conference on a Common European Law on Investment Screening, and is a non-profit, non-partisan think tank “dedicated to promoting better regulation of foreign investments in the context of security, public order, and competitiveness.” Kay’s views do not necessarily represent those of CELIS overall.

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Investment screening – the process by which a government reviews, and then approves or rejects, a proposed investment is hardly new. But of late, Kay notes, governments are paying closer attention to sources of incoming capital. This is due, in part, to a growing understanding of “economic security,” sitting at the intersection of national security and domestic economic concerns. The US Committee on Foreign Investment in the United States (CFIUS), created in 1975, has been strengthened, beginning with the 2018 Foreign Investment Risk Review Modernization Act (FIRRMA) and followed by other steps throughout the 2020s. Further, in 2020, the EU’s Regulation 2019/452 “Establishing a framework for the screening of foreign direct investments into the Union” took effect.

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Kay explained that there are two primary ways to think about how investment screening plays out in the anti-corruption context. First, there is the “negative” case. Governments have significant latitude and discretion. By some readings, almost all investments could be subject to review, or investors could be required to submit to audits, obtain security clearances, or meet other criteria. As Kay put it, “with great power comes great responsibility.” Where rule of law is weak, and processes are not transparent, such screening could be used to steer opportunities to a select group of investors who are “in favor.” Hungary has been dogged by such allegations.

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There is also a “positive” case, Kay continued. Investment screening can be used to forestall “malign economic influence,” whereby non-democratic or kleptocratic states invest strategically in key sectors of a target state, often taking advantage of, and exacerbating, corruption. This type of investment seeks to influence internal affairs, as well as to achieve geo-political goals. Kay points out that concerns about investments from Russia, China, Iran and other countries drove the EU to strengthen screening; this was similarly a concern for Moldova. He says that the best examples of investment screening safeguarding sensitive sectors are the ones we don’t know about: thanks to the deterrent effect, the investment never happens.

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At the end of the day, Kay notes, national security concerns justify screening strategic sectors – all the more so because corruption itself can become a security risk. Countries need access to information about foreign investors, as well as a formal system that includes review by, and coordination among, beneficial ownership registries, intelligence services, and ministries of economy. But strong institutions, a culture of transparency and objective review criteria are all crucial to avoid investment screening from being abused to further corruption.

Question: As summer approaches, and vacations keep people out of the office, how does compliance messaging stay top of mind?

Answer:

Summer is certainly the time of year when many take time for holidays and relaxation, but you can still be sure that compliance messages remain a "fun" summertime subject for those who are in the office or logging online.

Compliance training is not the only way to ensure that important messages about good governance are shared with colleagues. When thinking of summer, we think of time outdoors, perhaps the beach, fireworks, and ice cream.

Create innovative ways to generate interest in compliance topics by sharing infographics and details about enforcement actions relevant to the organization. Follow these emails/newsletters with activities like games or quizzes in which leaders and top scorers can win a small gift card to a local ice cream shop, or to get an iced coffee.

Utilize TRACE's compliance memes during weekly outreach with a compliance message and information on local summer events, like outdoor carnivals/street festivals, concerts, and more.

You can show that compliance is an "everyday" matter, that the compliance team is a team that is committed to everyone's well-being and that the door is always open for conversation.

Enjoy a compliant summer and find time for rest and relaxation!

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I understand that “imperfect” might induce some quease. And, yes, third party due diligence should be as close to perfect as available tools and budgets permit. But risk assessments aren’t perfect and don’t need to be to be defensible. Compliance professionals rarely agree on all criteria for a risk-ranking, much less the relative weight assigned to each.

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Sir Robert Alexander Watson-Watt saved thousands of lives in Britain during Second World War. He developed Chain Home, a low-frequency radar system that could detect aircraft from almost a hundred miles away. To do that, he encouraged his team to foster a “cult of the imperfect”. He knew that time was running out for Britain. The country didn't need the best radar system they could develop over five years; the country needed a workable radar system immediately. Watson-Watt instructed his team to seize on the third-best option: “the second-best comes too late . . . the best never comes."

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We work with companies as they prepare to rollout risk assessments. They’ve considered deal size, geography, extent of interaction with government officials, whether compensation will be contingent on success, pace of enforcement in their industry, etc. They beta test their criterion to determine whether the results reflect their intuitive sense of the risk of bribery that they’ve observed in their market over time.

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And then, too often, the whole project stalls. The many cooks in the compliance kitchen determine that their process should be more like that of the multinationals they work with. Or more like the latest international standard. Or perhaps more like their peers in their industry or region. These are all valid considerations, but in the time it will take to conduct that additional research, they also might be able to collect ownership information from all third parties and screen it against international watch lists. Or they might be able to identify at least their clearly highest-risk partners and begin their review of those, identifying ties to the government or past misconduct.

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Pulling the trigger on a due diligence risk assessment can be unsettling. The process is likely to churn up unforeseen issues. Third parties the compliance team didn’t even know their colleagues had retained may be uncovered. Deal size estimates may be hopelessly out-of-date But isn’t that the point?

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How should a team new to this process begin? Make a serious effort at a common-sense assessment based on all reasonably available information and … begin. Spot check your analysis and commit to revisit your approach at intervals.

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If a third party pays a bribe on your company’s behalf, you will be better served by an imperfect process that has been executed than an elaborate algorithm on paper.

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As the eventually knighted Watson-Watt might have argued, perfect third party risk assessments never materialize. Second best may come too late. Just get started.

Since the February 2025 Executive Order pausing enforcement of the Foreign Corrupt Practices Act (FCPA), businesses, lawyers and the anti-corruption community awaited the outcome of the planned 180-day review. On June 9, we received some idea about what lies ahead, as Deputy Attorney General Todd Blanche released the memorandum Guidelines for Investigations and Enforcement of the Foreign Corrupt Practice Act. The following day, additional clarification (accessed June 16, 2025) was provided by Department of Justice Criminal Division Head Matthew Galeotti at the American Conference Institute conference on Global Anti-Corruption, Ethics & Compliance.

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The June 9 memo leads with a reminder that the February EO aimed to ensure that FCPA is not:

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• “stretched beyond proper bounds and abused in a manner that harms the interests of the United States”;
• used “against American citizens and businesses ... for routine business practices” overseas; nor
• enforced to the detriment of “American economic competitiveness and, therefore, national security.”

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To most observers, that formulation seemed to reveal a rather outdated mode of thinking. Not only has the FCPA succeeded in shifting the global conversation about business ethics, it has, in fact, leveled the playing field for American firms and strengthened their competitiveness. Fortunately, based on the new guidance, that core understanding about the harms of corruption appears to remain firmly rooted. Despite the early fears of some observers, it appears that the FCPA has not been defanged. In particular, the memo states:

‍“In addition to distorting markets and undermining the rule of law, companies that bribe foreign officials to obtain business can put their law-abiding competitors, including U.S. companies, at a serious economic disadvantage. By bribing foreign officials to obtain lucrative contracts and illicit profits – at times hundreds of millions of dollars – corrupt competitors skew markets and disadvantage law-abiding U.S. companies and others for many years.”

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Galeotti stressed that “we will move aggressively – yet fairly – to prosecute white-collar offenders whose crimes undermine U.S. interests.” He told his audience that his team has “clarified the Corporate Enforcement and Voluntary Self-Disclosure Policy and expanded the Corporate Whistleblower Awards Pilot Program because these policies work.” He added, “This is the time for companies to self-report… come in early, cooperate, and remediate…. And for those who don’t, we will… bring cases against individuals and companies.” Finally, he told white-collar defense attorneys to “Be conscientious about what, when, and how you appeal the decisions of Trial Attorneys and AUSAs…. We do not begrudge defense counsel for zealously advocating for their clients…. But seeking premature relief, mischaracterizing prosecutorial conduct, or otherwise failing to be an honest broker actively undermines our system.”

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The national security angle also could open the door to whole new types of enforcement actions. The guidance refers to Attorney General Bondi’s February memorandum on Total Elimination of Cartels and Transnational Criminal Organizations (TCOs), directing the FCPA Unit to prioritize going after “foreign bribery that facilitates the criminal operations of Cartels and TCOs.” According to the guidance, the categories of cases that could be the subject of focus are those involving “money launderers or shell companies that engage in money laundering for Cartels or TCOs” or involving “employees of state-owned entities or other foreign officials who have received bribes from Cartels or TCOs.” It will be interesting to track what types of cases might arise from this guidance.

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By the same token, not all of the developments are encouraging. For one, there is now a higher bar to launch cases. Investigations will be undertaken to advance American interests, more narrowly defined than in the past. The guidance states that the DOJ will “seek to vindicate” the interests of US firms by “identifying and prioritizing the investigation and prosecution of conduct that most undermines these principles.” For instance, the DOJ will consider (emphasis added) “whether the alleged misconduct deprived specific and identifiable U.S. entities of fair access to compete and/or resulted in economic injury to specific and identifiable American companies or individuals.” As Galeotti explained, “Conduct that does not implicate U.S. interests should be left to our foreign counterparts or appropriate regulators.”

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Additionally, the guidance tells prosecutors to: “focus on cases in which individuals have engaged in criminal misconduct and not attribute nonspecific malfeasance to corporate structures,” and consider “the potential disruption to lawful business and the impact on a company's employees.” Further, “all new FCPA investigations or enforcement actions must be authorized by the Assistant Attorney General for the Criminal Division… or a more senior Department official.” The guidance also notes that the same principle of harm to US entities or individuals will be applied to enforcement of the Foreign Extortion Prevention Act.

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Additionally, some behaviors may now get a pass. The FCPA provides an exception for facilitation payments, which the guidance appears to underscore, noting that the DOJ will not look at “de minimis or low-dollar, generally accepted business courtesies” but rather at “alleged misconduct that bears strong indicia of corrupt intent tied to particular individuals, such as substantial bribe payments, [and] proven and sophisticated efforts to conceal bribe payments.” This interpretation from the law firm Norton Rose Fulbright suggests that the DOJ might take “a more limited view of when providing routine business gifts, entertainment and hospitalities crosses the line into corrupt payments.” Finally, there could be less cooperation with other countries’ investigations, as the memo explains that the DOJ will consider whether a “foreign law enforcement authority is willing and able to investigate and prosecute the same alleged misconduct.”

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All in all, the June 9 guidance and Galeotti’s June 10 remarks offer a needed dose of clarity to the FCPA landscape. But the proof will be in the pudding. Galeotti told his audience that the “Department has reviewed FCPA matters, closing certain cases and proceeding with others by applying the criteria set forth in the Guidelines.” It will be important to track how these current cases proceed, and what new investigations are opened going forward.

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Marc Schleifer

Governance, Democracy and Economic Development Expert

The G20’s Global Infrastructure Outlook projects that the world is on track for $79 trillion in infrastructure spending by 2040, with an additional $15 trillion needs gap. That volume of funds gives rise to an elevated corruption risk, requiring accountability and oversight. Against that backdrop, CoST, the Infrastructure Transparency Initiative, founded in 2012 after a three-year pilot, uses an approach blending: government, private sector and civil society engagement; data publication; independent projects reviews; and media, civil society and academia support. CoST estimates that it has helped a wide range of countries save millions of dollars. To better understand CoST’s work, I spoke recently with Programme Director John Hawkins.

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CoST’s core tool is the Open Contracting for Infrastructure Data Standard, developed jointly with the Open Contracting Partnership. Governments commit to publishing data using this standard when joining CoST as a member. Another tool is the Infrastructure Transparency Index, an idea which took some time to develop, and is crucial because, as Hawkins put it, “pass/fail doesn't work in the infrastructure sector.” The Index, with data on 10 countries, reviews the “enabling environment, capacities and processes, citizen participation, and data publication,” allowing to assess the transparency of a country’s infrastructure sector, and guide stakeholder collaboration to raise standards.

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I asked about China’s role in infrastructure globally. In Hawkins’ view, the US and its allies came late to the emerging markets infrastructure game, while China established strong local links well over 20 years ago. Governments were focused on getting the lowest price; Western firms couldn’t compete and multilateral development banks were considered slow. Hawkins notes that initially, Chinese-financed projects were often low quality, corruption reportedly widespread, and environmental and labor compliance substandard, with well-documented cases. But, Hawkins says, the reality has been shifting, noting “They may be imperfect, but Chinese-funded urban transport systems, rail networks and highways are changing cities across Africa and spurring new forms of competition,” citing expanded engagement in Uganda by Japan and Korea.

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I asked Hawkins whether it is possible to identify which infrastructure sub-sectors are most and least transparent. He pointed to roads and transport as an area where, despite problems, financial information is widely available, and many multilaterals have embedded monitoring units inside the cognizant government agencies. He shared that the water sector is more difficult, because the ownership and service delivery models can vary, and smaller government agencies have lower monitoring capacity. He pointed to the challenges posed by the scope, complexity and ownership of projects in the energy sector. In his view, in sectors with only one agency or ministry in charge, it is easier to assess and advance transparency.

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Overall, Hawkins thinks transparency is taken into account too late in the project lifecycle. Acknowledging the world’s infrastructure needs, he says transparency and speed need to be integrated, and that stronger budgetary systems and public financial management can reduce infrastructure corruption and eliminate white elephants. He would like the debt transparency movement to shine a light on infrastructure loans. He pointed out that where infrastructure investment is considered foreign aid, it often bypasses local procurement regulations, thus limiting transparency. Finally, Hawkins sees great promise for promoting transparency in sustainable infrastructure through the above-mentioned new data points in the Open Contracting for Infrastructure Data Standards. He also believes that the G20 Principles for Quality Infrastructure, driven by Japan, as well as the OECD-hosted Blue Dot Network, can help to raise the standard of infrastructure transparency.

Dealing with unethical behavior and corruption inside your organization is challenging. It requires a mix of leadership, legal acumen, and emotional intelligence. During a crisis, executive, legal, and compliance teams should consider ways to ensure the investigation process acknowledges the human element of an investigation while maintaining integrity. Whether wrapping up an investigation or preparing for a day that never arrives, addressing corruption requires legal precision and emotional intelligence.

Stop and Assess

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The instinct from leadership may be to react quickly, but in the long term, a bit of restraint will ensure the organization makes it through the crisis. One of the most important goals is ensuring the process is credible. There are a few key questions to start with:

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• Is this an isolated issue or a widespread issue?
• Who is implicated in the issue, and what access do they have to the organization’s systems?
• Will you need a third-party investigator or outside counsel?
• Are there ways to immediately address damage?

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Developing a solid answer to these questions will help ensure the response is credible and maintains the integrity of the outcome.

The Human Side of an Investigation

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Corruption investigations impact the entire organization. The organization is experiencing a pivotal moment. Emotions may range from anger to anxiety. While it will not be possible to manage an organization’s worth of emotions, developing a process that does not hinder the organization will help ensure employees share critical information. One way to address the human side of an investigation is to provide clear and consistent communication.

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Communication is key, even when it is impossible to share details. Leadership and compliance teams can be sure to:

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• Acknowledge the concerns;
• Explain the next phase of the process; and
• Emphasize that integrity and fairness are essential to the investigation.

Navigating the Investigation

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A corruption investigation requires both legal and emotional skills. Navigating this phase of the inquiry is where the relationships the compliance team has built will benefit the entire organization. Be sure that the feedback mechanisms continue to be forums to discuss ethics. This will help set teams up to continue cooperating and trusting each other after the crisis.

Navigating the Aftermath

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Once the facts are clear and regulators are satisfied, the compliance team will continue their work. Navigating the aftermath of a corruption crisis will require teams to continue using their legal acumen and emotional intelligence. The aftermath of corruption is a make-or-break moment. How an organization responds to corruption is as important as the misconduct. The choices made during the investigation shape the outcome of the investigation and can redefine an organization. Decisions made during the investigation determine whether an organization survives and what kind of organization it is on the other side.

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Weathering the Storm

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A corruption crisis will challenge both systems and people. The storm will pass but will impact people, policies and relationships needed to continue the business. The goal is not just to survive the storm but to emerge stronger. Facing the crisis directly with clear communication, fairness, and using emotional intelligence will set the course for a more resilient and robust organization.

Question: What are the latest trends in eLearning for 2025? What is the “next big thing” in Learning?

Answer:

A great question! It is always important to re-evaluate your training goals and how to improve year to year, and to find out best practices and the latest trends BEFORE getting started is always ideal.

That said, the eLearning sphere is always evolving, so what may be a trend now, could easily become outdated or over done in a short timeframe. Therefore, I will stress that no matter the trends, the content needs to ALWAYS be accurate and reflect the necessary policies and ethical business practices, as well as risks to be aware of, in your organization.

You can review what those risk areas might be with this helpful mini guide from TRACE.

Within the world of eLearning, AI, or Artificial Intelligence, tools have quickly become a way to create efficiencies, but should be handled with caution. While AI can be a great way to help to develop content in seconds, it could also be sharing skewed or inaccurate data, so knowing how to prompt an AI tool, and fact-checking all of the content that is developed by the tool is even more important than utilizing that AI tool in itself.

Another trend that has recently become popular has been dubbed “TikTok” microlearning. Though the social media giant is under severe scrutiny, it has rapidly grown into one of the largest learning platforms over the past few years alone.

Gone are the more traditional methods of learning, and now with short video content, you are able to meet learners where they are, sharing with them only the knowledge they need in the moment.

By using the social media model for training, you can create video and microlearning content quickly and even take current content and break it apart. Alongside the use of “tags”, you are able to suggest other topics for your learners to view, based upon their other completed material.  Learners will be more inclined to learn on their own with suggested content, rather than something that might be forced upon them.

An additional trend in eLearning is what is being seen as “active learning,” wherein learners are better able to retain information when interacting and engaging with others. If possible, allow your audience to interact during eLearning with a live forum to comment and connect, or even present content during a conference calling session so that people can share thoughts and questions while taking the course together.

With a few minor adjustments, including making content more bite-sized and structured around only one point at a time, and allowing for learners to engage with one another, you’re well on your way to staying “trendy” and keeping eLearning engaging for your company audience. Good luck and happy learning!

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Continuing to assess what a post-USAID world means for efforts to advance anti-corruption, transparency and good governance, I spoke recently with Blair Glencorse and Cheri Leigh Erasmus, Co-CEOs of Accountability Lab. Glencorse launched Accountability Lab in 2012 to work with youth to drive new thinking and energy in the space. Accountability Lab elevated localization before it became a buzzword, building a network of local organizations that both tap into and generate momentum for change. Given their “finger on the pulse” of grassroots anti-corruption, I asked Glencorse and Erasmus to share their concerns and asked whether we can have reasons for optimism.

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To begin, they stressed that it is impossible to overstate the importance of the role of the US Government in the anti-corruption sector. Blair described the US government as the largest, and in some sense only, major donor with a core anti-corruption focus, particularly over the last five years. Deprived of key support, many NGOs now must sort through a host of legal and financial issues, which may impact the willingness of other donors to fund them. Compounding those challenges, many other bilateral donors are also cutting overall aid budgets, including for anti-corruption and governance. Glencorse and Erasmus noted that the Danish, Spanish and Irish are exceptions, for example, but the size of their aid budgets is not nearly enough to make up for the loss of USAID. Thus, it is too soon to say how this major funding gap will be filled.

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Further, given shrinking public sector aid budgets, they heard much discussion at the recent Skoll World Forum about the need for civil society organizations to embrace revenue models and focus on sustainability. But core elements of anti-corruption are difficult to monetize, he pointed out, such as advocacy, policy reform and efforts to promote integrity. From the corporate side, Erasmus noted at the March 2025 OECD Global Anti-Corruption and Integrity Forum that while companies are affirming their commitment to ethical business, their focus remains on transactional concerns, such as risks in their value chains. She feels they may not yet have grappled with the need to support civil society actors who sustain more stable, transparent and fair business and investment environments.

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By the same token, Glencorse has seen leaders in civil society, philanthropy, and other governments’ aid agencies begin thinking about anti-corruption and governance. He sees new interest on the part of some individual philanthropists, foundations and donor advised funds. Private donors who previously avoided governance and anti-corruption programming – because of a perception of interference in political affairs, or because it can be difficult to draw a clear line from the work to tangible results – are starting to realize that by improving the transparency of government systems, it is possible to improve outcomes in areas that they have traditionally funded, such as health and education.  

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Glencorse chalks this up to a successful messaging effort on the part of the anti-corruption community. He also notes that some foundations are recognizing the costs of diminished accountability and transparency in the US, thus becoming more receptive to anti-corruption conversations more globally. Finally, Glencorse and Erasmus noted that performance-based funding models might offer a new direction for anti-corruption work. He pointed to the IMF collaboration with Transparency International to build integrity and governance metrics into the most recent Sri Lanka assessment. From that point of view, it will be important to track whether the US Development Finance Corporation can address transparency concerns in the countries in which it invests.

We often discuss the importance of the “tone at the top” and assume that ethics will cascade to the rest of an organization. Compliance and ethics culture can evaporate long before it ever reaches frontline teams. There are two essential filters between the top and frontline teams: the mood in the middle and the vibe at the bottom. Compliance professionals must simultaneously ensure that executives set the tone for ethics and understand how the culture is translated, reshaped, and sometimes distorted at every layer of the organization. Ensuring that ethics are fully integrated within an organization will serve organizations well as risk environments evolve.

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Let’s define the layers and the all-important filters. The tone at the top refers to ethical messaging and behavior modeled by executive leadership. The mood in the middle describes how middle management interprets and implements those values. And the vibe at the bottom is how frontline employees experience, internalize and reflect those norms in their behavior.

The Mood in the Middle

Middle managers are critical for translating corporate integrity. If a manager misunderstands or deprioritizes compliance, ethical priorities get watered down or filtered out. Managers must often balance ethics and achieving goals and objectives; they may not have the incentives, time, or tools to lead with an ethics-first approach. Balancing ethics with other goals becomes more complex if leadership messaging is vague or competes with different priorities.

The Vibe at the Bottom

Frontline employees experience compliance and ethics through peer dynamics, daily decisions, and perceived risk. Compliance is compromised if the view of ethics at this level is cynical, performative, or motivated by fear. Even the best policies cannot outpace attitudes, which may lead employees to distrust and disregard internal systems.

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The key to understanding ethics at this layer is essential for compliance teams. A compliance team that has the trust of frontline teams must create meaningful and safe feedback channels. Compliance teams can create meaningfulness and safety by:

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• Using anonymous surveys;
• Implementing quarterly listening sessions; and
• Seeking out and highlighting compliance champions or ethics ambassadors.

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The compliance team's role is to connect all three organizational layers. The compliance team can interpret ethical priorities and ensure they are translated consistently. This requires the compliance team to balance an enforcement role with a messaging role. Compliance teams should collect information from across the organization, design policies and procedures for different roles, and build relationships that last longer than annual training. Ethics compliance teams connect all three layers. The goal is to identify gaps and misalignment between tone, mood, and vibe. Tone sets the stage. Mood and vibe determine performance; reading the whole room is critical to creating an organization-wide culture of ethics.

Denny Herzberg was still an infant when his parents fled Nazi Germany in 1940. They had managed the difficult task of securing exit visas for themselves, but the Gestapo agent at the ship’s on-ramp wouldn’t let their baby aboard with only a birth certificate. So they did what they had to do: cleared out one of their suitcases, placed the boy inside, and carried him past the guard, his cries muffled by the tape on his mouth and the remaining clothes wrapped around his head. Thirty days later, the family arrived safe at their new home in the Dominican Republic.

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The DR was unique among nations in its welcoming of Jewish refugees. Its dictator, Rafael Trujillo—perhaps eager to distract from his own recent massacre of thousands of Haitians caught on the wrong side of the Dajabón river—had offered to take in as many as 100,000. Though only a few hundred were able to complete the journey, those that did were each given upwards of 80 acres of land along the northern coast and enough livestock to start building a thriving dairy industry in the newly-founded beach town of Sosúa.

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While the farms would endure, most of the original settlers moved on after the war, many of them—including Denny Herzberg—to the United States. Eventually taking residence in New Jersey, Herzberg drew upon his agricultural background to establish the Vitusa Corporation in 1956, specializing in the sale of dairy and animal-nutrition products. Among its customers was Herzberg’s childhood homeland, where the appetite for milk significantly exceeded the domestic supply, and where the post-Trujillo democratic government had long wielded food policy and distribution as means of maintaining patrimonial political support.

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Not surprising, then, that in May 1990, in the midst of a long-term balance-of-payments crisis and on the eve of an air-tight presidential election, the DR’s government would ask for early release from bonded storage of more than 600 metric tons of Vitusa’s powdered milk. Herzberg went along with the request—just as he would later go along with an extortionate demand for a $50,000 “service fee” in exchange for final payment. And as he would go along still later with the U.S. government’s characterization of this “service fee” as a bribe under the FCPA (facilitation-payment exception be damned), paying a $20,000 penalty and getting on with his life.

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This post is part of "The FCPA Files" series, examining key enforcement cases under the Foreign Corrupt Practices Act and the lessons they offer for modern compliance.

My conversation with Open Contracting Partnership (OCP) Executive Director Gavin Hayman and Head of Communications Georg Neumann continued with an exploration of two issues: 1) infrastructure procurement, particularly regarding Ukrainian reconstruction and China’s global role in the sector; and 2) developments in beneficial ownership transparency (BOT).

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First, I asked Hayman and Neumann how Ukraine can address corruption risks in the eventual post-war reconstruction. They explained that the country has already started, launching a tool called “DREAM,” the Digital Restoration Ecosystem for Accountable Management. OCP was closely involved in this effort. As Hayman noted, the goal is a “Prozzoro for reconstruction,” bringing together project planning, procurement digitization and robust civil society engagement.

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Hayman calls DREAM a “digital workflow for reconstruction.” Its goals are to identify the steps in project approval; encourage decentralization; empower communities to propose projects and get them funded; and mobilize the power of artificial intelligence to carry out advanced analytics, identify potential red flags, and speed data collection. To date, about 10,000 projects valued at $15 billion have been approved; just under 10% are funded fully and about 30% partially. The European Investment Bank and UNESCO are already using DREAM, and project selection and approvals that previously took six to twelve months are coming online in one to two months.

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Next, we discussed the risks of China’s infrastructure investments globally. Hayman points out that for many developing countries, the incentive is to just get projects done. The perception is that China is fast, efficient and inexpensive – and in the “best value versus cheapest bid” calculation, many governments take the cheapest bid. He also points out that projects may be funded by resource-backed deals or concessional financing, often with “mysterious intermediaries” or bespoke investment vehicles which may extract rents and direct the flow of funds, as well as  “padding” costs. When you add all this up, governments may not be getting such a good deal.

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By the same token, Hayman noted, the performance record of Chinese contractors is lately of improved quality, and where steps have been taken to ensure fair procurement processes, Chinese contractors will take part. Thus, it is critical to maintain global momentum in terms of cleaning up the processes, making contracting more transparent, strengthening relevant public institutions, carrying out needs assessments to avoid so-called “white elephant” projects, and ensuring effective public and small business engagement.

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Finally, we touched on improving beneficial ownership and the transparency of companies in business, as Hayman helped launch, and serves on the Steering Group of, Open Ownership, an organization that advances BOT reforms and increases the availability of beneficial ownership information. Hayman and Neumann explained that BOT reduces corruption through a variety of channels, including by making public procurements more transparent, encouraging competition and supplier diversity, discouraging bribery, reducing conflicts of interest and undue influence, preventing money laundering and countering tax evasion.

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BOT has run into recent headwinds following the scale-back of the US Corporate Transparency Act. However, Hayman noted that many other countries are still moving ahead. He pointed out that a well-publicized EU court ruling limiting access to beneficial ownership information was widely misread as a rollback of BOT; but in fact, it was more about how to do BOT properly, using laws around corporate formation. Many BOT advocates were encouraged by the revised set of 2024 EU rules to strengthen the fight against money laundering.

According to the OECD, “public procurement is the government activity most vulnerable to waste, mismanagement and corruption,” and over “half of foreign bribery cases occurred to obtain a public procurement contract.” Of course, discussion of corruption in public procurement has lately become hotly politicized in the US. But politics should not stop the integrity community from tackling this very real challenge.

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For 10 years, Open Contracting Partnership (OCP) has aimed to ensure that “the trillions of dollars spent on public contracts better serve people and protect our planet.” OCP looks at topics including anti-corruption, beneficial ownership, gender, infrastructure and more, using tools such as research, investigations, digitalization, data analysis and others. To understand how OCP is meeting the current moment, I spoke with Executive Director Gavin Hayman and Head of Communications Georg Neumann. The following is the first of a two-part series.

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Hayman and Neumann explain that because procurement represents one in every three dollars of public spending globally, making better use of those funds can grow economies and unlock innovation. But citizens want procurement to serve their interests and have a positive impact on their communities. Small business owners want open and transparent competition for those bids. This is where the issue of corruption comes to the fore.

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As Hayman pointed out, frustration with corruption in public spending was a main driver of Ukraine’s 2014 Maidan. Early in its history, OCP supported Ukrainian civil society efforts to reform procurement. One of the results of the Maidan was the Prozorro e-procurement system, which has generated huge government savings and increased the number of procurements going to small businesses. The more that small businesses have seen peers win government contracts, the more they have been encouraged to bid, creating a virtuous cycle. Prozorro has thus led to a significant drop in public perceptions of corruption in Ukraine.

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Other examples include bicycle share expansion in Mexico City, where OCP helped set up better market and community consultations and build broader bidding consortia. As a result, the bike share’s reach was doubled at the same cost. In the Dominican Republic, digital tools, institutional capacity building, and cross-agency coordination and collaboration with civil society has helped reduce corruption. This civil society and small business engagement angle is crucial; beyond collecting data, and disseminating tools and methodologies, OCP empowers local coalitions to drive positive change.

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Hayman points out that the drive to make better use of public resources is universal, reflected not just in recent US developments. Bureaucracy needs a “rethink,” he put it, and governments need to do more with less. In his view, we can test and scale new approaches in government, and then flip the switch when we are sure they work, versus more radical measures. That approach could have been taken with USAID, for instance.

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Hayman noted that the loss of USAID anti-corruption funding may have unpredictable knock-on effects for procurement transparency, but overall he thinks that global efforts are still moving in a positive direction, given the compelling results open contracting is able to demonstrate through better competition and spending. He is encouraged by the UK’s 2023 Procurement Act, which came into force in February 2025 and which should better track competition, encourage small businesses and allow for more awards on best value versus lowest cost.

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Hayman and Neumann offered a few rules of thumb: go digital; keep politics and politicians out procurements; use simple, fair rules; maintain a quality civil service and avoid “infantilizing” government by outsourcing everything; continually evaluate “bang for the buck” of contracts; and focus on value and outcomes from contracts, not just on cost; and make an extra effort to engage “unusual suspects” and smaller business to bid. “You have to go to them, don’t expect them to come to you,” said Hayman.

Entrepreneurs are unique actors in the private sector; they drive innovation and create new jobs and boost economic growth. Their high growth and risk tolerant mindset, coupled with finite resources, mean they face a unique set of integrity and ethics challenges. While larger companies will have accountants, attorneys, and procurement teams, entrepreneurs often develop policies as they grow. This is why ethics and integrity are the building block for entrepreneurial growth and development.

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Entrepreneurs are not “too small" for Integrity

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Oftentimes, entrepreneurs assume they are "too small," but this perspective creates blind spots. Entrepreneurs work with third-party vendors and operate in high-risk environments; risks exist in informal and fast-paced settings. Small mistakes can escalate quickly. It can be hard to distinguish the entrepreneur from the business and vice versa; here are examples where the lines are blurred:

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• Gifts or bribes? When a founder is the face of a business, small tokens of appreciation can be perceived as a bribe without clear guidelines for gift giving.
• Policy Grey Areas: changes in regulation can expose entrepreneurs vulnerable to corrupt actors seeking to take advantage of policy gaps.
• From Family to Favoritism: a growing business can quickly expand; informal hiring processes leave entrepreneurs vulnerable to legal and reputational.

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Integrity matters for the entrepreneur. Neglecting governance creates both legal and reputational risk. The founder is the business, and the company is the founder. This means that a founder who is seen as unethical may struggle to access capital, build partnerships, and attract new business. Collectively, entrepreneurs could be viewed negatively as banks and regulators treat small businesses and startups with increased scrutiny; this stymies the growth and innovation at the heart of entrepreneurship.

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Develop a Governance Mindset

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Compliance is not a luxury that can be savored later. It is about developing a set of attitudes and cultivating a governance mindset. Entrepreneurs do not need a compliance officer or lawyer to ask the right questions:

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• What is the most significant risk to my business?
• How will a decision impact my business? What are the high-impact mistakes?
• Can I collaborate with my team to ensure I have good guidance for essential issues?

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Governance for the entrepreneur requires an attitude focused on asking questions and building on lessons learned. Entrepreneurs can start building a culture of integrity before growth accelerates. Perfection is not required. But creating the habits of questioning, documenting, and cross-functional collaboration will lead to long-term success.

Corruption is a key driver of extreme poverty and inequality throughout the world. While an exact figure remains elusive, the UN estimates that corruption costs $2.6 trillion annually, or 5% of the world's GDP. Corruption is also a destabilizing force that is frequently at the heart of global events. It played a key role in the founding of Al-Qaeda, ignited the Arab Spring, and exacerbated the collapse of the Venezuelan economy. Given its far-reaching consequences, addressing global corruption requires sustained intervention.

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For decades, the United States Agency for International Development (“USAID”) has been leading this charge. USAID is the agency charged with administering humanitarian aid globally, and in 2004, it launched a broad Anti-Corruption Strategy to directly target the root of poverty and instability. This focus spurred 300 anti-corruption projects in 74 countries between 2007 and 2013.

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USAID then expanded its focus in 2022, seeking to challenge transnational corruption and kleptocracy by embedding anti-corruption programming within its missions. As part of this initiative, USAID has worked to strengthen countries’ capacity to fight corruption by empowering domestic media, establishing transparent procurement systems, and training judges and prosecutors to effectively address complex corruption cases.

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This vital work has yielded remarkable results, yet the Trump administration initiated a complete freeze of all USAID foreign assistance on January 20th, 2025.Trump justified this freeze by accusing USAID of committing fraud and theft. Shortly afterward, the “Department of Government Efficiency”(DOGE), under Elon Musk, began brutally dismantling the agency, despite a complete lack of congressional approval. As of March 10th, the Secretary of State announced that 83% of all USAID programs had been officially cut.

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One immediate impact of this devastating decision has been the abrupt withdrawal of funding from international journalists. A free and independent press is crucial to fighting corruption, and for years, USAID funded news organizations worldwide. USAID was especially important to Ukrainian news outlets, giving journalists the tools to hold the government accountable and ensure transparency. Reporters Without Borders found that “nine out of 10 Ukrainian outlets receive international aid and USAID is the main donor.” The sudden funding freeze has already crippled local media, forcing multiple large outlets to resort to fundraisers. One of these outlets, Slidstvo, which lost 80% of its funding, specialized in investigating corruption and was a close partner of the Organized Crime and Corruption Reporting Project (OCCRP), which performs “indispensable journalistic work investigating the misdeeds of the rich and crooked in Eastern Europe.”

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The Ukrainian press is not unique in its reliance on USAID funding. USAID supported journalism in over 30 countries, and had recently awarded a large contract to foster collaboration “among Asian investigative journalists on transborder crime and corruption.” Additionally, USAID assisted at least “6,200 journalists, …707 non-state news outlets, and…279 media-sector civil society organizations dedicated to strengthening independent media.” USAID was also funding the OCCRP, and the recent shutdown forced them to lay off 43 reporters and other staff. Congress had already committed to maintaining these efforts, but Elon Musk and the Trump administration withheld these funds, undermining a free and independent press. Furthermore, in addition to sabotaging efforts to uncover corruption, USAID’s dismantling also undermines critical anti-corruption efforts in public procurement.

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For years, USAID has been helping countries reform their procurement systems to improve transparency and oversight. During his joint address to Congress on March 4th, President Trump announced that DOGE had recently canceled a USAID contract worth $14 million to improve public procurement in Serbia, labeling it an “appalling waste.” However, this is a small price to pay to secure a vulnerable sector. Because governments spend vast sums through procurement mechanisms, the area is ripe for misuse. This is especially detrimental in low-income nations, where the lost money can have a substantial impact on the ability of the government to provide necessary services. Fortunately, there is a blueprint for success that USAID had been relentlessly pursuing prior to this administration.

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In Kosovo, USAID was able to substantially reduce the risks of procurement-related corruption through a series of initiatives. USAID funded the Open Procurement Transparency Portal, granting the public access to procurement documents that used to take days or even months to obtain. This meant that journalists, interested parties, or the public could oversee the government's procurement activities. USAID also helped Kosovo establish an Anti-Fraud Unit within the National Audit Office, and it expanded the use of e-procurement, reducing opportunities for corruption. Similar efforts to transition to e-procurement were also initiated by USAID in Liberia, which launched its first Electronic Government Procurement system in February 2025. Sadly, despite the success of these programs, replication in other countries is unlikely if USAID is allowed to be shuttered.

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In addition to supporting procurement reform, USAID also fought to ensure that corrupt individuals were held accountable once their wrongdoings were exposed. USAID had been working to empower foreign judiciaries and investigators to competently handle complex corruption cases. Due to the constantly evolving techniques and technologies facilitating corrupt practices, these cases are only becoming more complex, which can put a strain on low-income countries. To ensure swift justice, USAID spearheaded efforts to train prosecutors, judges, and other interested parties on how to manage increasingly sophisticated corruption schemes.

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In Paraguay, USAID had trained both judges and prosecutors in the handling of transnational corruption and criminal organizations. Similarly, USAID provided corruption training to staff at the Serbian Prosecutor's office, the Ugandan High Court’s Anti-Corruption Division, and to civil judges in Palestine. In Indonesia, USAID facilitated training for judges, prosecutors, and police regarding how to apply existing anti-corruption and anti-money laundering legislation to environmental crimes. This was in response to widespread violations of local environmental and wildlife protections, which presented a new and novel challenge for the judiciary. Ultimately, corruption is a constantly evolving field, and USAID helps foreign prosecutors and judges obtain the tools needed to properly fight it.

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While the current administration has falsely accused USAID of fraud, the reality is that dismantling USAID would leave the world vastly more vulnerable to corruption. The damage caused by shutting down USAID will be profound and difficult to reverse. Anti-corruption work cannot be paused for four years and then resumed without consequences. Progress in this field is the result of sustained and relentless effort, but it can be undone in an instant, erasing decades of hard-won gains. Without USAID, the global fight against corruption risks collapse, leaving fragile nations to bear the consequences alone - and as always, it will be the poorest and most vulnerable who will suffer.

In the Financial Times, “Impact investors look to soften Trump aid blow,” Simon Mundy writes that while impact investment “cannot plug all the holes left by the slashing of international aid, it may at least be able to offset some of the effect”. What of the numerous canceled anti-corruption and good governance programs? Can or should impact investment fill that gap? How do impact investors think about their role in the anti-corruption ecosystem? To explore these questions, I spoke recently with Founder and Managing Partner of Total Impact Capital, Ambassador John Simon.

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Ambassador Simon emphasized that given their mission orientation, impact investors should care deeply about issues of integrity. First, this is just good business sense. “Companies that pay bribes don't care about creating value,” he points out. “Companies that engage in corruption are likely to be poorly managed, inefficient, and may have labor problems.” But moreover, achieving the non-financial returns that constitute impact means not only investing in various climate, health, social, poverty or other solutions, but also steering clear of negative externalities. Considering the detrimental effect of corruption in emerging markets in particular, impact investors must avoid contributing to the problem.  

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However, Simon notes, most impact investors will likely not advocate to foreign governments about the need to eliminate corruption, as USAID or the State Department might have in the past. The impact investment sector is rooted in an ethos of using private sector approaches to fill critical social service or other gaps in the context of weak public sector capacity. Most impact investors – and their portfolio companies – prefer to operate “outside the system.” But eventually, as Simon stresses, at some point, “if you want to grow the business, you have to engage with government.” Investors looking for pipeline will tell companies they need to formalize to be investable, which means dealing with the legal system – but many firms in emerging markets want to avoid the inevitable demands for payment.

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This is where the unique impact investment model comes to the fore. The first step is to identify risks through due diligence, as well as compliance training and monitoring. But because impact investments are often small scale, there might not be sufficient funds to pay for robust compliance programs. Instead, impact investors can mobilize their local understanding and connection with their investees to ensure open communication and to navigate day-to-day risks. Simon says he advises portfolio companies to “refuse to acknowledge, refer to the law relentlessly, use local lawyers, communicate that your investor won’t allow it.” Officials often realize it’s not worth their time. While this approach may be costly, the alternative is worse; a bribe paid once is an invitation to keep demanding payment.

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From this point of view, Simon notes, having public sector funds in the impact investment mix has been critical, as it was well-known that US Government funds cannot touch corruption. When Simon worked at OPIC, he says, major multinationals approached him not for financial backing, but for the reassurance of the USG imprimatur. This reinforced the “refuse to pay” approach. Now, Simon fears, even the privately-funded impact investor may face ramifications from the drop-off in US foreign assistance and weakened FCPA enforcement.