Many of you will have read about the alleged Dutch bribery lawsuit which can be reviewed on the FT (this article is behind a paywall). Deutsche ended up paying out a €175m settlement, and the case revolved around a treasurer entering into deals allegedly as a direct consequence of corporate entertainment he was offered. But that’s not all. By the end of 2011, the Dutch social landlord sat on a derivatives exposure to Deutsche involving a notional principal of almost €3bn as hedges against rising interest rates, and €3.5m had been paid by the bank to an intermediary, half of which is alleged to have been paid on to the treasurer.
The case itself demonstrates how ethical lines can be overstepped in a significant way, and the FT also talks about the bank taking the Dutch treasurer of Vestia to a dinner in 2008 at an exclusive London restaurant, followed by a visit to a bar and an exclusive nightclub “where the party got through eight bottles of Dom Pérignon champagne and three bottles of vodka”, according to the filings. And when Vestia entered into additional interest rate swaps with Deutsche Bank shortly afterwards, an employee of the bank boasted in an internal email: “let’s face it, it was the entertainment programme at [the nightclub],” according to the court documents. Vestia sued, and Deutsche paid part of the claim but accepted no liability.
What I found particularly interesting were the comments posted on the FT site in response to the article. One person said, “That's not bribery, that's basic corporate hospitality”. Another stated, “And in defence of the Email...who wouldn’t write an ironical message to a colleague when he signs the deal the night after a party....” These rather flippant comments made on the back of a case where huge sums of money were involved, a company was brought to its knees and someone holding a position of trust and responsibility totally abused that responsibility, illustrate how different individuals’ moral compasses can be. I have come across those differences in many professional situations over the years – whether when uncovering a fraud myself (I have discovered several during my career so far), or even in discussion of quite complex situations such as ‘tips’ and other payments, standard in certain geographies but going against a multinational company's policies and codes which don’t always allow for pragmatism. I was even rather pleased on one board of a large subsidiary of a very large multinational for my colleague to say they felt I had the clearest and highest standards within the leadership team in terms of ethics – but that also highlighted to me that different people can have very different standpoints where it comes to ethics.
Part of my own clear stance is down to my professional body (ICAEW) and training – I have documented standards to uphold and am clear about what they are. That is why I believe membership of a professional body and commitment to and training around a clear Code of Ethics is critical for anyone in treasury and other professions. Otherwise, if we leave things to individual discretion we’re going to be in a lot of trouble! You can find the ACT Ethical Code here.
