WHAT YOU SHOULD KNOW ABOUT DUE DILIGENCE ?

Increasingly for many multinational firms, the engagement of outside lobbyists is considered a high risk contract. Anytime an outside lobbyist engages in lobbying activity on behalf of a company, it may trigger certain registration requirements for the company and/or reporting obligations. So increasingly companies want to make certain that the lobbyists they hire are in compliance with all applicable laws and reporting requirements. Companies require that consultants (lobbyists) and other third parties acting on their behalf adhere to the basic principles contained in their anti-corruption policies and insert legal language into their contracts that binds them to avoid bribery and corruption. Companies ensure that all payments to third parties are recorded accurately and documented appropriately.

Companies are bound to follow all applicable laws in the countries in which they do business, including all those governing conduct regarding elected or appointed government officials, such as laws dealing with lobbying, gifts, contributions and bribery. Companies are careful to avoid situations where a third party who is performing services on their behalf, as a consultant, agent or in any other capacity, may bribe or attempt to bribe a government or public official. Indeed, companies and possibly their employees can be held liable for the actions of these third parties. Therefore, companies screen third parties thoroughly before they hire them to perform work on their behalf  that may involve making a payment to or otherwise transacting business with, a government official. Some companies have developed a thorough screening process before hiring a lobbyist that may include for example the following:

1. Having a Compliance Due Diligence Questionnaire filled out by the lobbyist (if the lobbyist is not on the Due Diligence List);
2. Two business reference checks (minimum) documented in writing;
3. Search on full legal name of lobbying firm as well as the individual lobbyists. The search may cover broad searches to learn as much as possible about the lobbying firm as possible as well as key words including: fraud, bribery, corruption, money-laundering, graft and kickback. Any red flags and appropriate follow-up to be documented in writing;
4. Copy of CV of lobbyist;
5. A copy of the lobbying firm's code of conduct if available;
6. In some instances a written legal opinion of local counsel or interview with the lobbyist may be required;
7. Due Diligence Memorandum summary;
8. Writing agreement for the services to be rendered and fee structure;
9. Special language requirement for a particular lobbying engagement;
10. Each lobbyist having to sign a Lobbyist Certification.