Your company should have a detailed written procedure for handling any complaint or allegation of bribery or corruption, regardless of the means through which it is communicated. The mechanism could include the internal company hot-line, anonymous tips, or a report directly from the business unit involved. You can make the decision on whether or not to investigate with consultation with other groups such as the Audit Committee of the Board of Directors or the Legal Department. The head of the business unit in which the claim arose may also be notified that an allegation has been made and that the Compliance Department will be handling the matter on a go-forward basis. Through the use of such a detailed written procedure, you can work to ensure there is complete transparency on the rights and obligations of all parties once an allegation is made. This allows the Compliance Department to have not only the flexibility but also the responsibility to deal with such matters, from which it can best assess and then decide on how to manage the matter.
Indeed the SEC considers a variety of factors around giving credit to corporate investigations including: Did management, the board or committees consisting solely of outside directors oversee the review? Did company employees or outside persons perform the review? If outside persons, have they done other work for the company? If the review was conducted by outside counsel, had management previously engaged such counsel? How long ago was the firm’s last representation of the company? How often has the law firm represented the company? How much in legal fees has the company paid the firm?
In a presentation by Jay Martin, Vice President, Chief Compliance Officer (CCO) and the Senior Deputy Counsel for Baker Hughes Incorporated and Jacki Trevino, Senior Consultant, Advisory Services at SAI Global entitled, “FCPA Compliance Best Practices: Success Stories of Robust and Effective Anti-Corruption Compliance Programs in High Risk Markets” they presented the specifics of an investigation protocol.
The five steps were: (1) Opening and Categorizing the Case; (2) Planning the Investigation; (3) Executing the Investigation Plan; (4) Determining Appropriate Follow-Up; and (5) Closing the Case. If you follow this basic protocol, you should be able to work through most investigations, in a clear, concise and cost effective manner. Furthermore you should have a report at the end of the day which should stand up to later scrutiny if a regulator comes looking. Finally, you will be able to document, document, and document, not only the steps you took but why and the outcome obtained.
Step 1: Opening and Categorizing the Case. This is the triage step and this first step, to categorize a compliance violation. You should notify the relevant individuals, including those on your investigation team and any senior management members under your notification protocols. After notification, you should assemble your investigation team for preliminary meetings and assessments. This Step 1 should be accomplished in one to three days after the allegation comes into compliance, either through your reporting structure or other means.
Given the number of ways that information about violations or potential violations of the Foreign Corrupt Practices Act (FCPA) can be communicated to the Department of Justice (DOJ) having a robust triage system is an important way that a company can separate the wheat from the chaff and bring the right number of resources to bear on a FCPA problem. A key consideration is making an initial determination of whether to bring in outside counsel to head up an investigation and a determination of the of the resources that you may want or need to commit to a problem.
Step 2: Planning the Investigation. After assembling your investigation team, determine the required investigation tasks. These would include document review and interviews. If hard drives need to be copied or documents put on hold or sequestered in any way, or relationships need to be analyzed through relationship software programs or key word search programs, this should also be planned out at this time. These tasks should be integrated into a written investigation or work plan so that the entire process going forward is documented. Also, if there is a variation from the written investigation plan, such variation should be documented and an explanation provided as to why there was such a variation. Lastly, if international travel is involved this should also be considered and planned for at this step. Step 2 should be accomplished with another one to three days.
Step 3: Executing the Investigation Plan. Under this step, the investigation should be completed. I would urge that the interviews not be effected until all documents are reviewed and ready for use in any interviews. Care should be taken to ensure that an appropriate Upjohn warning is issued and that the interviewee clearly understands that whoever is performing the interview represents the company and not the person being interviewed, whether they are the target of the investigation or not. The appropriate steps should also be taken to preserve the attorney-client privilege and attorney work product assertions. This Step 3 should be accomplished in one to two weeks.
Step 4: Determining Appropriate Follow-Up. At this step, the preliminary investigation should be completed and you are ready to move into the final phases. In some investigations, it is relatively easy to determine when the work is essentially complete. For example, if the allegation is both specific and narrow, and the investigation reveals a compelling and benign explanation for the conduct alleged, then the investigation typically is complete and you are ready to convene the investigation team and the relevant business unit representatives. This group would decide on the appropriate disciplinary steps or other actions to take. This Step 4 should be completed in one day to one week.
It must be cautioned that at this step, if there are findings of specific or discrete allegations of corruption and bribery, a decision must be made as how to handle such findings going forward.
Step 5: Closing the Case. Under this final step, communicate the investigation results to the stakeholders and complete the case report. Everything done in the above steps should be documented and stored, either electronically or in hard copy form together. The case report should be completed. This Step 5 should be completed in one day to one week.
Three Key Takeaways
- A written protocol, created before an investigation is a key starting point.
- Create specific steps to follow so there will be full transparency and documentation going forward.
- Consistency in approach is critical.