Join The AACI
THE AMERICAN ANTI-CORRUPTION INSTITUTE (AACI) Together, Empowering Tone at the Top
The First Interview with Mr. L. B. Files, president of The American Anti-Corruption Institute (AACI)
October 3, 2017, Tempe, Arizona
As The American Anti-Corruption Institute's (AACI) journey approached five years since launching its operations in late 2012, fraud and corruption scandals continued to make headlines. Though the Volkswagen Dieselgate costs exceeded $30bn to date, and Samsung's CEO will spend time in prison for corruption charges, the corporate world does not seem to be paying attention. Corruption removed several heads of states from power, in South Korea, Brazil, a senator in the United States, UN officials and Ambassadors and , EU officials.
Despite the setbacks, or maybe because of the exposure, the global political landscape became more determined than ever to fight graft. For the first time, the United States equated the efforts of combating corruption to the fighting financing terrorism.
Fighting corruption has in fact, became a prerequisite to fighting financing terrorism. Amid the global turmoil of corruption, the media and public relations of The AACI met Mr. L. Burke Files, the president of The AACI, at its headquarter in Tempe, Arizona to discuss The AACI's global efforts in fighting corruption, among other relevant issues.
The AACI: On behalf of our members, constituents, and advocates worldwide, we thank you Mr. Files for this opportunity to answer our questions.
Files: You are most welcome.
The AACI: As you know, corruption is a prevalent phenomenon hitting all over the world. How do you evaluate the commitment of the international community to fighting corruption?
Files: The 1977 Foreign Corrupt Practice Act, The United Nations Convention against Corruption (2005), the UK 2010 Bribery Act and those of the OECD relevant anti-corruption demonstrate an unprecedented global commitment to unequivocally fighting corruption. The most explicit U.S. message in this regard came at the May 2016 London anti-corruption summit where John Kerry, the former US Secretary of State said: “We are fighting a battle, all of us. Corruption, writ large, is as much of an enemy, because it destroys nation states, as some of the extremists we are fighting or the other challenges we face." This proclamation changed the global landscape for fighting corruption. It tied, in public, for the first time, combating terrorism and combating corruption.
"This proclamation changed the global landscape for fighting corruption. It tied, in public, for the first time, combating terrorism and combating corruption."
The AACI: Why does The AACI focus all its efforts on executive management and those charged with governance?
Files: To answer your question, let me remind you that our founders are visionaries and responded strategically to the financial crises of 2008. The financial meltdown of 2008 shocked us though we had SOX and all the other relevant laws. When you read the report of THE NATIONAL COMMISSION ON THE CAUSES OF THE FINANCIAL AND ECONOMIC CRISIS IN THE UNITED STATES, you will find the crises was 100% avoidable. Further, that corporate of America suffered from significant weakness at the top. We found that the “tone at the top” was severely weak and at best sickened from significant lack of anti-corruption intelligence and a short term visions. We believe that the Board Of Directors and Executive Management must possess the minimum required anti-corruption knowledge and skills to enable them to meet their duties. As of today, The AACI is the only organization all over the world that targets decision makers to help them deter, prevent, and detect fraud and corruption through the methodical management anti-corruption certification program Certified Anti-Corruption Manager (CACM).
"The AACI is the only organization all over the world that targets decision makers to help them deter, prevent, and detect fraud and corruption through the methodical management anti-corruption certification program Certified Anti-Corruption Manager (CACM)."
The AACI: What do you mean by anti-corruption intelligence?
Files: The AACI coined it to mean the minimum, optimum knowledge a decision maker should have to avoid fraud and corruption intelligently. Such knowledge includes the proper blend of due diligence, internal controls, anti-corruption, governance, decision making, process auditing ( from a management perspective and duties) to avoid anti-corruption and fraud. By avoidance, we emphasize the concept of deterrence and prevention. Corruption prevention is less expensive and better than any cure.
The AACI: What do you do to implement this new concept: “anti-corruption intelligence”?
Files: As I said, we started to offer the CACM certification in January 2013. Our CACM members exist in too many countries all over the world as the membership base grows steadily and consistently. We believe that CACMs are the change leaders wherever they are and whatever they do. We support them and our constituents with well-structured and smartly delivered learning programs and up to date news and reports. These learning workshops are centered on the topics of anti-corruption intelligence. We also encourage academic institutions all over the world to help them engage their students in corruption prevention as those students will be the leaders and decision makers of tomorrow. Though we are a for-profit institution, we do not charge academic institutions any fees when we deliver our services to their students. We also started in 2016 to offer the Organizations Anti-Corruption Certification Program. It is an innovation of our researchers and technical staff who started working on it since the early days of 2014. We must reach the leader of tomorrow today, and to open their eyes.
The AACI: How does the Organizations Anti-Corruption Certification Program help in fighting corruption?
Files: Knowledge is the key to prevention. It is an innovation that quantifies an entity’s exposure to corruption. As a result, it provides the board and executive management with a crystal clear and objective evidence of the entity’s weaknesses in its exposure to corruption and its anti-corruption intelligence. Therefore, the board has the informed opportunity to respond to the threats and alleviate any such inadequacies. The certification process is disciplined and accompanied with a report that is qualified when board members or executive management avoid participation in the certification process.
"Knowledge is the key to prevention. It is an innovation that quantifies an entity’s exposure to corruption."
The AACI: Can governments use this program to implement their respective national anti-corruption policies and strategies effectively?
Files: Yes, they can. Countries and governments can use our program to quantify corruption exposure to the entire economy or a specific sector of it. We are ready to partner with states to implement our program nationally and invest in implementing their national anti-corruption strategies. It is not a secret when I say that we are currently negotiating several such partnerships.
The AACI: Does The AACI receive support from the U.S. government due to the nature of your activities and as you are present in too many developed and developing countries?
Files: Thank you for this question. The AACI is a U.S. for-profit institute and does not receive any funds from the U.S. government directly or indirectly. We also refuse to accept any donation or financial support from any person or entity with an agenda. These assertions are under the direct oversight of our board to remain authentic and independent. We are proud of our integrity, objectivity, transparency, innovation, and professionalism. We do not compromise these qualities.
"The AACI is a U.S. for-profit institute and does not receive any funds from the U.S. government directly or indirectly."
The AACI: Though you have a significant presence overseas, you do not open offices in those countries you serve. Do not you think that affects your operations negatively?
Files: The AACI is a mission-driven and innovative professional business concept organization. We consciously direct most of our resources to our research and development in anti-corruption service design and delivery. The nature of corruption and its complexities dictated our business concept. Let me clarify this point.
As of today, the well meaning international organizations anti-corruption programs have failed to make a compelling and visible difference in fighting corruption at the national and international level. This is documented in many published research papers. We know the best approach to successfully combatting graft at the national level is to engage with the local community and work with their social and economic resources. For example, when we plan to get into a local market of a country, we search for a private sector organization that shares with us our mission and form with it a strategic partnership. It could be a university, an advisory company, a law firm, or a local anti-corruption service provider. Such local cooperation provides us with a proper understanding of the local content of corruption and enables us to provide our service efficiently. Make no mistake that fighting corruption is always local. There is not a one-fits-all solution. This has been the mistake of most of the well meaning programs that have failed. Besides, if the local regulators and the country authorities do not commit to fighting corruption, our efforts will not have the impact level we aspire to achieve.
The AACI: As corruption varies among countries and regions, what are the challenges you face in implementing your mission?
Files: The challenges we face in developed countries differ from those we encounter in developing countries. Though, there are similarities. The rule of law prevails in developed countries. This helps us engaging in their local markets on a basis supported by a matured legislative and judiciary environment. We face the opposite in developing countries with varying degrees. The primary challenges we face in too many countries are the gross negligence of private sector in adopting anti-corruption policies, bureaucracy in public sector institutions, inefficient judiciary systems, widely spread of nepotism and citizens' distrust in public institutions. Often the very design of the company or the local institution is the primary problem. Most people do not want to be corrupt, but often feel they have to play by the local bent rules to survive.
The AACI: But this would be an opportunity for you in such markets.
Files: This is true. But it is an opportunity for the leadership of such countries to act sincerely and be persuasive in fighting corruption. It should be clear that corruption erodes the basic principles of governance and exposes the national security to severe dangers. It is not logical when the political leadership of a country asserts publicly on fighting corruption and do nothing to make the public believe in such assertions. Regaining public trust in public institutions should be the guiding principle for any country to form its national anti-corruption strategy. For example, Brazil, though suffers from a series of high profile corruption scandals, has a real opportunity to implement anti-corruption strategies to minimize the socioeconomic damages it currently faces, or not. An authentic market place is a prosperous market place, a corrupt market place withers.
The AACI: It seems you believe that governments should be more engaged in fighting corruption to reap real results from their anti-corruption efforts.
Files: Yes, absolutely. A government engagement is not necessarily to issuing laws, rules, and strategies. The country should make it clear that it is a national interest priority. As a national priority corruption should be studied and understood. Once the local issues are understood only then can solutions be proposed. As I said earlier, there is not a one-fits-all-solution. One country’s anti-corruption solution could be a catastrophic one to another country. The first step to any effective national anti-corruption strategy is setting the proper tone at the top. An exceptional example of setting the proper tone at the top in developing countries is the Jordan monarch his majesty King Abdulla II sixth Royal Discussion Paper: “ Rule of Law and Civil State” That is why we, at The AACI, decided last month to start sharing King Abdulla II’s Sixth Discussion Paper at all the academic institutions with whom we cooperate. No sovereign has ever before issued such a statement.
"An exceptional example of setting the proper tone at the top in developing countries is the Jordan monarch his majesty King Abdulla II sixth Royal Discussion Paper: “ Rule of Law and Civil State” That is why we, at The AACI, decided last month to start sharing King Abdulla II’s Sixth Discussion Paper at all the academic institutions with whom we cooperate. No sovereign has ever before issued such a statement."
The AACI: Do you think that there are countries that do not take corruption risks and damages seriously?
File: Unfortunately yes. Some countries believe in managing corruption rather than fighting corruption. Worse, some countries use corruption as a tool for governance. However, this is a recipe for a state and nation failure. Such nations will increasingly face the international community scrutiny. Corruption cannot be managed or limited as corruptions grows out the human appetite for more and more, which of course can never be satiated.
"Some countries believe in managing corruption rather than fighting corruption. Worse, some countries use corruption as a tool for governance."
The AACI: Why did you decide to offer the CACM via exam in selected countries next year?
Files: We will be starting offering the CACM via exam in the U.S., Canada, Netherlands, Palestine, Jordan, Qatar, U.A.E., and Malaysia beginning from January 1, 2018. We will also make the CACM review textbook available in early 2018 and arrange for intensive CACM review sessions in these countries in cooperation with third parties and our strategic partners.
The primary reason underlying our decision to take such a step was to the fulfill local needs of our constituents in these countries. This supports the certification credibility and provides local interested parties with a highly regarded anti-corruption certification for utilizing it in their anti-corruption policies and strategies. This applies at the organizational and state level.
We will roll over the CACM via exam to other countries on an annual basis. Nigeria, Saudi Arabia, Egypt, Germany, U.K., Hong Kong, Singapore, Kazakhstan, South Africa, and Kenya are among the countries where we will roll over the CACM via exam no later 2022.
"Nigeria, Saudi Arabia, Egypt, Germany, U.K., Hong Kong, Singapore, Kazakhstan, South Africa, and Kenya are among the countries where we will roll over the CACM via exam no later 2022."
The AACI: Are you optimistic about the international community engagement and commitment in combating graft?
Files: I am both optimistic and a realist. There should be no doubt that fighting corruption became a prerequisite to fighting financing terrorism. There is also more emphasis than ever on the concepts of transparency, accountability, integrity, freedom of access to information, and good governance. There is no doubt that this is a long-term commits for everyone involved.
By the end of the day, results will always talk, and public trust in public institutions and economic improvement will always be the primary measurement of our optimism at the national and international levels.
The AACI: Do you agree with the statement; “There is no such thing as a called corruption free organization, economy, or country” But if you do, what are the consequences of not taking the necessary measures to fight corruption?
Files: I agree with the statement. After all corruption is a manifestation of the human condition left unchecked. We will never be free from corruption. But, let me drive home The AACI point on two levels, the private sector and the public sector. When an organization does not establish, implement, and monitor its corruption prevention policy mandates and by setting the proper tone at the top, one should not be surprised when such an organization has the following characteristics:
In the public sector you will see,
One needs only to look to Greece to see such a utter and total collapse of public trust and institutions from corruption. A common sense and objective assessment concludes that corruption costs are dire and devastating.
"A common sense and objective assessment concludes that corruption costs are dire and devastating."
The AACI: Are you saying that corruption is opposite to economic growth? Some corrupt countries do grow do they not?
Files: Yes and Indeed. Though some corrupt countries are enjoying economic growth, the primary economic growth is either pent up demand, such as the 50 years of stagnation behind the Iron Curtain, or a natural resource boom in diamonds, oil, lithium, etc… Further, the natural resource booms, in poorly managed countries, are themselves are enormous flowers drawing in corrupt bees.
"Further, the natural resource booms, in poorly managed countries, are themselves are enormous flowers drawing in corrupt bees."
The AACI: Why is there resistance to fighting corruption?
Files: We are interfering with the streams of money flowing from corruption. Some complex interests and their beneficiaries may be affected negatively as a result of any genuine reduction of graft. Whenever there is a real and sincere fight of corruption, there are many winners and few losers. The winners are all of the citizens and the nation as a whole. Yet, we still argue that if the corrupt players would reform their ways they just might find their profits growing along with the economy, not in spite of the economy.
"Whenever there is a real and sincere fight of corruption, there are many winners and few losers. The winners are all of the citizens and the nation as a whole."
The AACI: Thank you Mr. Files for this opportunity to explore with you this complex topic.
Files: It is the most complex topic one can talk about but a challenge we are up to it. You are always most welcome.
Training and Events