Second in our 5-part series on compliance through the lens of Star Wars is Episode V – The Empire Strikes Back, which is my personal favorite of the original three movies. The film begins with a cool battle on the ice planet of Hoth and has some great HR lessons as Darth Vader executes officers for work place failures; demonstrates some dangers involving ineffective training for Luke Skywalker on the tropical plant of Dagobah, where he travels to learn under the Jedi master Yoda who utters the immortal line “Try not! Do, or do not. There is no try”; and ends in Cloud City, a floating gas mining colony in the skies of the planet Bespin run by Han Solo’s old buddy, Lando Calrissian. It also has one of the greatest movie lines of all-time, thundered by Darth Vader to Luke Skywalker, near the end of the film. Today, we consider it for the continued issue of due diligence.
Solo and Calrissian go way back and Solo trusts him. Of course, Solo won his starship, the Millennium Falcon, in a card game from Calrrisian but it was never clear just how legit the card had been. Unfortunately for Solo, he was followed to the Cloud City by bounty hunter Boba Fett who alerts the Empire to Solo’s location. Solo’s friendship with Calrrisian is sorely tested when Vader and his Imperial Troops arrive, take Solo, Chewbacca and Princess Leia prisoner and torture them to entice Luke to come to save his friends. During the climactic battle between Luke Skywalker and Darth Vader, there is the BIG REVEAL where Vadar utters the immortal line, “I AM YOUR FATHER”.
I thought about these last two points, in the context of knowing who you are doing business with under the FCPA or UK Bribery Act. I once heard a company President say he did not need to perform due diligence because he looked a man in the eyes and that was enough to know if he was honest. (I should add, this President also evaluated the strength of a handshake as an additional level of due diligence.) Hopefully we have moved past this level of sophistication for due diligence and its evaluation thereof.
One of the areas I still receive questions about are the different levels of due diligence. I break due diligence down into three stages: Level I, Level II and Level III.
Level I-consists of checking individual names and company names through several hundred Global Watch lists comprised of anti-money laundering (AML), anti-bribery, sanctions lists, coupled with other financial corruption and criminal databases.
Level II-encompasses supplementing Level I due diligence with a deeper screening of international media, typically the major newspapers and periodicals from all countries plus detailed Internet searches.
Level III-it is an in-country ‘boots-on-the-ground’ investigation and is designed to supply your company “with a comprehensive analysis of all available public records data supplemented with detailed field intelligence to identify known and more importantly unknown conditions.
Now imagine if Luke had performed a more robust level of due diligence on Darth Vadar? Would he have been able to find out Darth Vadar was his father? Perhaps not but then again, we might not have heard that seminal line “I AM YOUR FATHER”.