This episode is the first of a two-part series of podcasts dedicated to the first 100 days of the Trump administration as it related to compliance. Today we have Jonathan Armstrong and Jay Rosen. Next week Matt Kelly and Mike Volkov.

  1. Jonathan Armstrong leads a discussion of the Trump administrations devolution of Privacy Shield, GDPR and what they mean for American companies doing business in the UK and EU. He discusses the key differences in the DOJ’s Evaluation of Corporate Compliance Programs in an FCPA analysis and under the Bribery Act, differences in the EU approach to conflict minerals and under the Trump Administration and concludes by giving us his thoughts on what Brexit means for compliance.

For the Cordery Compliance client alerts see the following:

EU conflicts minerals compliance legislation 

DOJ Evaluation of Corporate Compliance: how does it compare to UK Bribery Act 2010?

BREXIT Glossary

  1. Jay Rosen considers what companies the intersection of business and politics under the Trump administration, the business response he has observed to Trump administrations steps and miss-steps, the comments made by DOJ representatives at Q1 conferences and the vibe of compliance conference attendees.

For Jay’s posts see the following:

 Still in the Enforcement Business and Evaluation of Corporate Compliance Programs

“It Was the Best of Times, It was the Worst of Times,” or “Ignorance is Strength”

 For Matt Kelly’s posts see the following:

Compliance in the Trump Era: More Markers Placed

Trump Administration Whacks Telco Firm for $892 Million

Drone Industry Pan Trump’s Regulatory

Trump Risk Disclosures Start Rolling In

First SEC Whistleblower Award of Trump Era

Sessions Dodges, Weaves, Promises on FCPA

For Mike Volkov’s posts see the following:

Yates, AG Sessions and Individual Criminal Prosecutions

New E-Book — Moving the Goalposts: The Justice Department Redefines Effective Compliance

FCPA Remediation Focus on Supervisory Personnel

FPCA Pilot Program Motors On

For Tom Fox’s posts see the following:

The Trump Administration-Kaos is Bad for Business

The Trump Administration-Failures in Leadership and Management

The Trump Administration-Preparing for a Catastrophe

The Trump Administration-the Business Response

DOJ Enforcement of the FCPA and the International Fight against Corruption in the Trump Administration

The members of the Everything Compliance panel include:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Mike Volkov – One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
  • Matt Kelly – Founder and CEO of Radical Compliance, is the former Editor of Compliance Week. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong – Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

Show Notes for Episode 51, for the week ending May 5, the Cinco de Mayo Edition

Over some breakfast tacos and Mexican coffee, Jay and I have a wide-ranging discussion on some of the week’s top compliance related stories. We discuss:

  1. Uganda considers a demand side response to corruption. See Tom’s article in Compliance Week. What are the rationales for anti-corruption legislation? See Tom’s post on the rationales underlying the FCPA on the FCPA Compliance Report.
  2. Why due diligence investigations still need the human element. See Scott Shaffer’s article in FCPA Blog.
  3. Kara Brockmeyer joins Debevoise & Plimpton LLP. See Tom’s article in the FCPA Blog.
  4. What has been the fate of whistleblowers at Wells Fargo. See James Stewart considers in his Common Sense column in the New York Times.
  5. Federal jury convicts former Guinea mining minister of laundering bribes. See article in the FCPA Blog.
  6. Astros lead the AL with the second best record in baseball. What does Tony Parker’s injury mean for the Spurs/Rockets playoff series?
  7. The Financial Reporting Council (FRC) investigates KPMG on its audits of Rolls Royce for the firm’s failure to detect bribes paid by the company. See article in the FCPA Blog.
  8. Listeners to this podcast can received a discount to Compliance Week 2017. Go to registrationand enter discount code CW17TOMFOX.

 

In this episode, Matt Kelly and I take a deep dive into the weeds of the soon-to-be-released the House Financial Services Committee, the Financial Choice 2.0 Act. We consider some of the ideas in the legislation which Matt thinks are bad including:

1. Repeal of the Chevron deference repealed.

2. Attempts to clip the SEC rule making authority.

3. Exempting more companies which desire to go public from SOX 404(b) requirements and reporting.

4. (Matt’s most particular bad idea) The exemption of more filers exempted from XBRL reporting.

We also discuss some of the potential benefits from the legislation and where it may all go in the Senate.

For more see Matt’s blog post House GOP Regulatory Reform Axe, on his site Radical Compliance.

 

In this podcast, Marc Bohn and James Tillen from the firm of Miller & Chevalier, discuss their recent publication entitled, “Evaluating FCPA Pilot Program: Declinations on the Rise” where they review the state of Department of Justice’s Foreign Corrupt Practices Act  declinations after one year of the agency’s enforcement Pilot Program, which sought to promote greater accountability for companies and individuals who violate the FCPA, while rewarding those who voluntarily self-disclose violations and cooperate with investigations and remediation efforts. They discuss the following issues:

  1. Do the numbers show any increase in declinations in 2016 over the past few years?
  2. What are the conditions to obtain a declination? Is any one as more important or are they of equal importance?
  3. Is there any reason not to publicize all declinations?
  4. They discuss how SEC enforcement is a factor in DOJ calculus in determining whether or not to grant a declination.
  5. In 2016 there were two declinations which involved privately held companies and hence no SEC prosecution. They explain how the DOJ got to profit disgorgement.
  6. They prognosticate the tea leaves, on what might be the fate of the the Pilot Program going forward.

For additional reading on FCPA enforcement in 2017, see Miller & Chevalier’s FCPA Spring Review 2017.

As many of my Facebook followers know, I am huge fan of breakfast tacos, particularly on any day ending in the letter ‘Y’. So, it was not too much of a surprise to find me at my favorite breakfast taco place last Saturday, Moderno’s. The Saturday AM manager, whom I know by name (and vice versa), said when I placed the usual Saturday order of bacon, egg and cheese tacos, responded with “Same as it ever was” the iconic line from the Talking Heads song Once in a Lifetime. I told him that he just gave me the title of my Monday blog.

Over the weekend, we had the first 100 days of the Trump administration. To commemorate this constructed time for review of any new administration I gathered the Everything Compliance podcast panel of Mike Volkov, Jay Rosen, Matt Kelly and Jonathan Armstrong for a recording which will post this coming Thursday, further Rosen and I hit some of our highlights in the 50th anniversary podcast of This Week in FCPA. In today’s blog, I wanted to consider where Foreign Corrupt Practices Act (FCPA) enforcement is and has been during the first 100 days of the current administration. About the clearest expression I can bring to you is that FCPA enforcement has been and continues to be same as it ever was. 

I found the remarks of Department of Justice (DOJ) Acting Principal Assistant Attorney General Trevor McFadden around FCPA enforcement, made recently in Washington DC at the Anti-Corruption, Export Controls & Sanctions (ACES) 10th Compliance Summit (the “DC speech”), reassuring when he began the final section of his remarks by reiterating the DOJ’s commitment to the concepts articulated in the Yates Memo. The DOJ wants to hold individuals accountable for corporate misconduct, as it is individuals not corporations who engage in actions. He also reiterated support for the concepts behind the FCPA Pilot Program stating, “the department regularly takes into consideration voluntary self-disclosures, cooperation and remedial efforts when making charging decisions involving business organizations.”

He next turned to the speed and length of FCPA investigations. McFadden said the DOJ is committed to moving forward “expeditiously” to investigate and bring investigations to a conclusion. However, to do so, companies must be prepared to meet this need for speed with prompt and thorough investigations. It also means there must be extensive cooperation, including companies working with the DOJ, to “prioritize internal investigations and to respond to Fraud Section requests promptly to ensure there are no unnecessary delays.”

McFadden believes this new, speedier resolution process will “be good for cooperating companies. No executive wants to deal with a lingering government investigation or the associated costs and distraction from the company’s mission.” Both the Fraud Section leadership and McFadden are focused on wrapping up old investigations, with no unnecessary delays. McFadden concluded this section by stating “My intent is for our FCPA investigations to be measured in months, not years.”

Jay Rosen, in his blog post “It Was the Best of Times, It was the Worst of Times, Or Ignorance is Strength”, wrote about the speech by Attorney General (AG) Jeff Sessions at the Ethics & Compliance Initiative (ECI) Annual Conference. In rare remarks by the AG on the FCPA specifically and in addressing the compliance community more generally, Sessions said the following:

“First, I want to thank you for working so hard to ensure that your companies and clients do the right thing. The Department of Justice investigates and prosecutes people and companies that break the law – including laws that criminalize corporate misconduct. That is an incredibly important responsibility, and the men and women of our department take it seriously. Our work ensures that law-breaking is punished, and helps deter future bad behavior. I think I have the experience to properly evaluate a case. We will enforce the law and not back down to powerful forces – but we will be fair – equal justice to poor and rich.”

“But each case we bring may be a sign that something has already gone wrong. That is what your work seeks to prevent, by building strong cultures of compliance within your companies to deter illegal and unethical conduct. We applaud those efforts. Our department would much rather have people and companies obey the law and do the right thing, so we don’t have to see them in court. Your good work makes our jobs easier, and it makes your companies and our country better. So far, so good. The E&C community is recognized for doing their job of helping companies follow their moral compass.”

Matt Kelly, after listening to the same remarks, was somewhat less sanguine in his blog post entitled “Sessions Dodges, Weaves, Promises on FCPA. No doubt writing while wearing his skeptical journalist hat, he said, “Sessions spoke to an audience of several hundred at the Ethics & Compliance Initiative’s annual conference in Washington. If we take his words at face value, they’re reassuring to compliance professionals in several ways. Yes, he said, enforcement of the FCPA will continue. No, he said, the Justice Department won’t view every incident of an employee’s misconduct as a big heap of criminal liability for the company itself. Then again, Sessions also danced around the question of whether zealous U.S. enforcement of anti-corruption laws puts U.S. companies at a competitive disadvantage on the global stage. At one point in his speech, he praised anti-corruption enforcement as a vehicle to reward the many good companies out there that don’t bribe their way to success.”

Rosen also detailed the FCPA enforcement actions which have occurred under the new administration and found continuity from prior administrations, even if there was currently a seeming paucity in enforcement actions. Yet, for Rosen, the most important area was around the move for greater corporate compliance. He noted, “From global food and consumer goods providers to healthcare and culture companies, there seems to be an overwhelming response to tying organizations’ business culture and values with operational controls and concurrently educating employees by giving them the tools they need to “do the right thing” … we can take solace in the fact that many companies who take E&C seriously continue to talk the talk and walk the walk.”

I found that McFadden’s remarks will warm the hearts of compliance practitioners as they made clear the DOJ is committed to the international fight against bribery and corruption. It will work with its investigative and prosecutorial counterparts across the globe to not only share information but aggressively prosecute corruption scofflaws. The remarks of both McFadden and AG Sessions stressed the continuity of the DOJ to bring more and greater resources to bear across the globe to fight bribery and corruption.

For those who thought that Trump would do away with the FCPA or his minions would work to weaken it, McFadden’s and AG Sessions speeches should be of comfort that the DOJ understands not only the value of the FCPA to the US as a country but also the US business community. Striving for a level playing field in the business world will always work to the advantage of US companies. Indeed, more anti-corruption enforcement across the globe should also benefit US companies by even greater leveling of the playing field. McFadden’s remarks make clear that the FCPA is a positive for businesses and its continued enforcement will remain a top priority in the current DOJ.

As for the first 100 day of the new administration in FCPA it was and will continue to be same as it ever was. 

For a YouTube clip music video of the Talking Heads’ Once in a Lifetime, click here.

 

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2017