You can certainly tell when a person is beloved. As Phil Liggett said, “I’ve never seen such an outpouring. I’m convinced Paul had no idea how much he was loved. But the answer is clear today.” I am talking about Paul Sherwen, the noted cycling commentator, who died over the weekend. According to his obituary in the New York Times, Sherwen was a cycling participant, maven and aficionado, a two-time British national champion and rode in the Tour de France in the 1970 and ‘80s.
But most of us knew Sherwen through his annual commentary on the Tour de France. He was paired with his co-commentator, Phil Liggett. Jason Gay, writing in the Wall Street Journal, said “They were known, simply, as Phil and Paul. Or Paul and Phil. Either way, Liggett and Sherwen were synonymous with cycling, and especially the Tour de France, where, every July, they would turn a three-week bike race into a two-man rhapsody about athleticism and the marvels of the French countryside. Paul and Phil could enthuse over a thrilling victory, but also a 500-year-old church. Or a flock of sheep. As commentators, they were lyrical and playful. There was no one like them in sports.”
Last week there were two speeches by Department of Justice (DOJ) officials which directly impacted corporate compliance programs going forward. They were a speech by Principal Deputy Assistant Attorney General John P. Cronan who spoke at the Practising Law Institute Event in Washington. The second was Deputy Attorney General Rod Rosenstein, who delivered a keynote address to the conference the same week as ACI. Taken together, these speeches provided solid information for the compliance practitioner going forward into 2019. I am in the midst of a three-blog post exploration of what these speakers said, what it means for the compliance profession and how a Chief Compliance Officer (CCO) or compliance practitioner can use the information going forward.
Public/Private Partnership in Fight Against Corruption
Cronan’s remarks were probably of the most interest to the compliance practitioner. He began by noting the DOJ continues to strive for more public-private partnership in fighting the global scourge of bribery and corruption. The DOJ believes it can more effectively do so when companies come in and self-report bribery and corruption they uncover in their organization. He stated, “I want to talk today about the importance of law enforcement and private industry working together in pursuit of common, shared objectives. There can be a perception – and I would say, often a misperception – of the Department of Justice and private industry as adversaries. While that certainly is sometimes the case, viewing law enforcement and the private sector in such stark black and white terms all too often is an oversimplification and simply inaccurate. That misperception not only can pose an obstacle to effective law enforcement, but it can also work against the interests of corporations that are victimized by crime or whose employees engage in misconduct.” The law enforcement he is referring to is fighting corruption and the law is the Foreign Corrupt Practices Act (FCPA).
Role of the Compliance Professional
Interestingly, no doubt due to the audience, Cronan said, “In-house counsel are also on the front lines of efforts to promote lawful business practices.” This is not correct as that is not the role of in-house counsel in a corporate legal department. Their role is to protect the organization. However, if you insert the corporate compliance professional in the role of ‘in-house counsel’ not only does the statement make more sense, it is correct as he then goes on to add “Those of us in law enforcement well recognize that in-house counsel – together with boards of directors and senior management – are leading the charge from within companies to detect, deter, and rectify corporate misconduct and misbehaviors.” Moreover, it is the compliance professional and corporate compliance function which “will confront difficult decisions about how to respond to bad actors; what compliance, audit, and ethics programs will look like; what resources will be devoted to those programs; and the level of access that compliance personnel will have to management and the board. It therefore is you to whom we in government want to make our message clear about the incentives for companies to prevent and redress corporate misconduct.”
Effective Compliance Programs
Finally, and perhaps most importantly, was Cronan’s words on an effectivecompliance program, not a paper compliance program. He stated, “when we at the Department talk about compliance, we are referring to effective compliance. The Principles of Federal Prosecution of Business Organizations make that clear. Under those Principles, in determining whether to charge a corporation, prosecutors must consider, among other factors, the existence and effectiveness of the corporation’s preexisting compliance program, as well as the corporation’s subsequent remedial actions including efforts to implement an effective compliance program or improve an existing one. In assessing a compliance program, the Principles specifically direct prosecutors to consider “whether a corporation’s compliance program is merely a ‘paper program’ or whether it was designed, implemented, reviewed, and revised, as appropriate, in an effective manner.””
He provided the example of the entity MoneyGram International Inc. who had its Deferred Prosecution Agreement (DPA) extended when “during the course of the DPA, MoneyGram experienced significant weaknesses in its anti-money laundering and anti-fraud programs. It then inadequately disclosed those weaknesses to the government, and instead told the Department that a rise in the number of consumer fraud transactions it was processing was substantially related to external circumstances. MoneyGram also failed to complete the enhanced compliance undertakings required by its 2012 DPA.” The additional penalties placed upon MoneyGram were not insignificant as it “found itself facing a 30-month extension of its DPA, as well as forfeiture in the amount of $125 million.” That is what happens when even a company under a DPA, tries to slide by with a paper compliance program.
Tomorrow I will consider the speech by Rod Rosenstein.
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© Thomas R. Fox, 2018