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Management Side

Corruption: A Sinking Tide Lowers All Boats (So Learn to Fly)

Ever heard of Transparency International that tracks the corruption of countries across the globe? Their goal is to stamp out corruption (good luck at that), and they provide some pretty interesting statistics.

Their "Corruption Perception Index" ranks countries from 1 to 180 based on their perceived public-sector corruption. Denmark shines at #1, while South Sudan languishes at #180. This ranking system was the simplest way to measure corruption between countries involved in the tangled mess of dishonest thievery (bribery, diversion of funds, and government workers using their position to put money in their pockets, just to name three methods).

And where do some papermaking countries land? Sweden is ranked 8th, Canada and Germany tie at 15th, and the United States is 28th. Not stellar, and perhaps not surprising.

So what is the U.S. doing to try and combat the many shades of money-grubbing corruption? Because a sinking tide lowers all boats. (And you can't escape your environment.)

  1. The Foreign Corrupt Practices Act (FCPA) of 1977. This takes aim at those offering bribes. In summary, FCPA requires accurate financial record keeping and internal accounting for companies listed on the U.S. Stock Exchange. Mess up here, and your trouble is delivered to you and enforced by the Department of Justice (DOJ) and results in criminal charges, as well as the Securities and Exchange Commission (SEC) which results in uncomfortably costly fines.

Note: The FCPA is currently on a 180 day pause which ends Aug 9th, 2025. More about this below.

  1. The Corporate Transparency Act (CTA) of 2021. This targets money laundering and shell companies used to hide illegal funds, by requiring specific U.S. companies to report the actual, real people who own or control the companies. (No more billion-dollar sums hidden away in shell companies with mythical owners.) All ownership information must be sent to the Department of Treasury.

  1. The Foreign Extortion Prevention Act (FEPA) of 2023 works with FCPA (#1 above) by targeting foreign officials who either solicit or pockets bribes from anyone on U.S. soil. Bringing this into effect involves working with the foreign country in question. So if you're dealing with Denmark, for example, you should be just fine. (It's helped a great deal with fuel theft and extortion in Ecuador's oil sector, case in point.)

And a Bonus Proposal for Corruption:

There's a No Gratuities for Governing Act Bill. This bill says that state, local, or tribal officials can't bribe someone (either before or after a job), and was proposed in August 2024 by bipartisan U.S. House members. But Congress hasn't gotten around to this one yet. This bill aims to close a loophole created by the June 2024 Supreme Court decision Snyder v. United States. The bill clarifies that such "gifts" are illegal, threatening to end this form of corruption in public contracts.

Kinda interesting this still hasn't passed. (I wonder why?)

Now if you've been glancing at the headlines about these four anti-corruption regulations (I don't because I'm happier when I ignore the news), you'll likely have heard a lot of people panicking about some regulations getting cut back or relaxed. They're saying the world is about to end, more or less. Or that we'll be soon become mired in deep, dark corruption as a direct result.

Some of the objections are due to the classic: What's Better? Filling out more personal information for less privacy but potentially more safety, or divulging less personal information and having a higher safety risk? - Ran into that one several times across multiple issues.

But if you dig deeper, for example, with the 180-day suspension of the FCPA, you'll learn that FCPA enforcement created "an uneven playing field" for U.S. companies that threatened national security. (Go here to read the excellent summary by Harvard Law School.) Seems at least worth a 180-day experiment.

And remember that 180-day window ends August 9th, 2025.

Besides, take a step back. If pausing one single law descends the entire country into the shady depths of corruption, I think we have bigger problems. And perhaps we should consider a few more anti-corruption laws to enact as well?

Time will tell.

Now, the very best way to combat corruption in your own life is a simple but powerful technique: practice being honest in the little things, because eventually, as you build your "honesty muscle" it'll grow stronger. Then one day you'll find it's easy to be honest with the big things. Try it, it works!

And meanwhile, it's also terrifically helpful when management cares about stamping out corruption. Without management support, it's difficult to rise above the tide and really excel in open and honest transactions in all areas of your mill. With management support, it's so much easier.

Always start with yourself, then influence the people around you in a positive way.

Be sure to join us next month when we discuss Capital Projects!



 


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