Md. lawyer incorporates TRACE International to guide companies doing

Daily Record, The (Baltimore), Nov 19, 2004 by Alisa Bralove

Ten days after the terrorist attacks of Sept. 11, 2001, Alexandra A. Wrage found herself aboard a plane to Prague wondering why she left the comforts of her Annapolis home.

Sitting with 3,500 others at an anti-corruption conference, she didn't feel much better when Ronald K. Noble, secretary general of the international crime-fighting organization INTERPOL, stood before the group and said he could make no promises that the world would ever be safe from terrorism as long as bribery, a tool often used by terrorists, still took place.

Just 10 days later, upon returning to Maryland, Wrage incorporated TRACE International Inc., a nonprofit organization that pools information about various foreign countries and businesses to help guide American, Canadian and European companies doing business internationally.

Specifically, TRACE - shorthand for Transparent Agents and Contracting Entities - aims to eliminate the bribes that often grease the wheels of business abroad.

I think of bribery as a barnacle crime. It attaches itself to everything, Wrage said. If you have money laundering, you usually have bribery because someone somewhere has to turn a blind eye. If you have terrorism, you usually have bribery because someone somewhere has bribed an airport official or customs shipping inspector.

Her concept of pooling information and providing it to subscribers, along with access to a stable of pre-vetted foreign intermediaries to help set up shop, seems straightforward enough; but, she says, nothing like it existed in 2001. There were traditional NGOs that worked with the World Bank, and there were for- profit organizations willing to help with due diligence at a high price - but no third category.

We're a really funny hybrid animal because we're designed as a nonprofit but we provide very specific business tools, she said. We qualified as a nonprofit because the goal is to educate people on this, reduce corruption, etc., but the path here is very pragmatic.

Bridge and training

The organization combats bribery by acting as a bridge between two groups: Commercial intermediaries and corporations looking for business agents abroad. It also has a strong educational component, with dossiers on various countries and anti-bribery training required annually.

Intermediaries - people on the ground in foreign nations who can aid TRACE member companies in setting up shop - become members of TRACE through a due diligence review process designed to establish that they understand business practices in the United States and are committed to avoiding kick-backs, bribery, nepotism and extortion. Each intermediary pays about $500.

For TRACE's 100-plus corporate subscribers, the cost is higher. For an annual subscription fee of about $20,000, the corporations have access to, among other things, due diligence reports on their current and prospective business agents and dossiers on countries of interest.

The third component is education, including the mandatory anti- bribery training.

In November 2003, Satyendra Dubey, a senior engineer with the National Highways Authority of India, was found dead, just days after blowing the whistle on corruption in Indian highway projects. Four months later, TRACE held an anti-bribery training conference in India for its foreign intermediaries.

Evgeny Reyzman, an attorney in the Moscow office of Baker & McKenzie, met Wrage in 2002 when she arranged a workshop on corruption in the Russian city. According to Reyzman, acknowledging corruption is one of the most important factors for future development in that country.

It is the national tragedy and is very hard to fight against, he said. Corruption in Russia is deeply rooted historically.

Reyzman represents another one of TRACE's partners in fighting bribery. To assist with information gathering, TRACE uses foreign law firms who are willing to work on a pro bono basis to provide information about a given country.

TRACE is able to accumulate relevant information, on issues of both laws and practices in these countries and pass these to the interested parties, so that relevant officers of these companies may be timely and duly advised on what they should and mostly what they should not do in this or that country, Reyzman said.

Jeffrey W. Cottle, who replaced Wrage as senior staff counsel international at Northrop Grumman, called her one of the leading practitioners in the field.

In addition to performing an outsourcing function for companies, he said, Wrage has added one more component: It also serves as a forum for practitioners to share wisdom in the field.

Tim Martin, the vice president and general counsel for Nexen, Canada's largest oil and gas company and a TRACE member, said the reports and benchmarking that TRACE does saves his company a significant amount of money.

That was work that we had done in the past using outside investigative firms. This is another means of doing that due diligence in a highly cost-effective manner, he said. All these things add up to providing us information that we otherwise would have to spend a lot of money to acquire.