I had a helpful call with an anti-money laundering specialist a few weeks back. He explained how peers cooperate to share intelligence about emerging criminal/terrorist tactics. When I started in risk, we’d do likewise with terrorist tactics. The AML expert asked, do you do the same for anti-bribery, fraud, and the like?
Yes and no. Anecdotally, I’ve accumulated an expanding library of war stories, but I’d be lying if I said I’d categorised, catalogued and analysed them, looking for trends, triggers and predictors.
In a newsletter, we won’t get there. But on the current roster of trends and tactics in bribery and corruption, I might offer the following:
🚦 Increased use of shell companies and complex corporate structures to obscure ownership.
🚦 Misuse of cryptocurrencies and digital assets to make illicit payments anonymously.
🚦 Exploiting loopholes in vendor onboarding processes to create fake consulting agreements or service contracts.
🚦Sophisticated hacking of accounts payable systems to approve and divert fraudulent payments.
🚦 Manipulating invoices and purchase orders to overstate or falsify services/goods provided.
🚦 Abusing charitable donations as a conduit for bribes to gain influence.
🚦 Misrepresenting family connections and sponsorships to qualify as third-party intermediaries.
🚦 Leveraging software vulnerabilities to manipulate quality/safety testing data.
🚦 Falsifying compliance training records and certifications using deepfake technology.
🚦 Exploiting government stimulus and assistance programs with fake beneficiaries and data.
🚦 Bribery disguised as regular promotional expenditures for gifts, travel, and entertainment.
🚦 Collusive bidding schemes among vendors driven by bribery of insiders.
Aren’t some of these old? Yes, for large and sophisticated organisations with decades of internationalised experience, many might appear familiar. But, much of my work these days is with SMEs (and investors in SMEs). These tactics are migrating down value chains as more prominent organisations become more challenging targets.
What would you add?
You may have seen the news about Virgin Atlantic’s sustainable aviation fuel (SAF) transatlantic flight. I worked at Virgin Atlantic as an intern, and it remains the best employer I ever had. It is painful to call absolute BS on Virgin’s trumpeting about SAF.
We don’t seem to be able to consider second (or third) order consequences. Yet another reason why ESG metrics in the current guise are rubbish. Can I back up that strong claim:
✈️ SAF is a hydrocarbon emitting similar C02.
✈️ Ethanol and seed oils used in SAF come from intensive monoculture, harming soil (the primary source of water capture, which abates global warming) and destroying animal life and biodiversity.
✈️ SAF may have “absorbed carbon” (as plants) recently, but oil did millions of years ago. It’s not entirely black (gold) and white.
✈️ SAF is produced using a three-stage refining process, currently x4 more costly than kerosene (although we may yet scale that down).
I’m not saying “burn more oil,” nor saying SAFs are useless. To present them as a panacea is misleading. As ever, taking personal responsibility (limiting flying), caring for the soil, nurturing plants, etc., might present a better collective effort than changing one “bad” thing for something that has not yet been proven “better.”