Corporate Grantmakers Summit San Francisco, California

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Corporate Grantmakers SummitSan Francisco,
California

• Compliance and Accountability
• The Challenges
• June 9, 2005
• Rob Buchanan
• Director, International Programs

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Presentation will Focus on

• Terrorism Issues
• Corrupt Practices

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Federal Anti-Terrorism ActionsPost 9/11

• Executive Order 13224 (2001)
• USA Patriot Act (2001)
• Treasury Department Voluntary Guidelines for
  Anti-Terrorism Financing (2002)

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So what am I supposed to do?

• Recognize that there is no clear guidance from
  the Government.
• Assess your potential risk for diversion of funds
  to terrorists.
• Take reasonable and appropriate steps to prevent
  diversion.
• Know your grantee.

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Practical approaches that different grantmakers
are taking

• Do nothing beyond what is legally required.
• Check grantees against terrorist watch lists.
• Include anti-terrorism language in grant
  agreement.
• Require separate signed anti-terrorism
  certification.
• Require audits of grants deemed at higher risk.
• Make sites visits.

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Principles of International Charity

• Treasury Guidelines Working Group
• Key Principles
• Treasury Response

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Touchstones for Dealing withAnti-Terrorism
Issues

• Create a culture of compliance.
• Follow the Principles of International Charity.
  
• Consider using reputable U.S.-based intermediary
  organizations.
• Continue your international giving.

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Helpful Resources forAnti-Terrorism Issues

• United States International Grantmaking website
  (www.usig.org)
• Grantmaking in an Age of Terrorism Some
  Thoughts on Compliance Strategies for
  International Grantmakers by Janne G. Gallagher,
  VP and General Counsel, Council on Foundations
• Seeking a Safe Harbor by Martin B.
  Schneiderman, Foundation News Commentary,
  May/June 2004
• Principles of International Charity, Treasury
  Guidelines Working Group, March 2005

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Foreign Corrupt Practices Act (1977)

• Domestic corporations prohibited from bribing
  foreign officials, foreign political parties,
  party officials or candidates for purpose of
  obtaining or maintaining business in a particular
  country.
• Corporates required to maintain detailed records
  of payments and transactions plus internal
  accounting system to ensure managements control
  over firms assets.
• Exception for routine governmental action
  customary and legal grease payments not covered
  
• Convention on Bribery of Foreign Public Officials
  in International Business Transactions (1997)

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FCPA Penalties

• Criminal fine up to 2 million for corporations.
• Criminal penalty for willful violation by
  individuals up to 100,000 and/or up to 5 years
  in prison.
• Civil penalties up to 10,000 for both
  corporations and individuals.

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FCPA Compliance Program

• Separate corporate policy statement on FCPA
  compliance.
• Specific staff designated to implement compliance
  program.
• Trainings with board, senior managers, and staff
  having contact with foreign officials.
• Maintain accurate records and internal accounting
  control system.
• Establish reporting and disciplinary mechanisms.
• Include FCPA provisions in agreements with
  consultants and partners.

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FCPA Affirmative Defenses

• Payment is legal under written laws/regulations
  of host country.
• Payment is for a reasonable and bona fide
  expenditure.