Jay is on an Alaskan Disney cruise with the family. Through the prism of Trump’s attacks on the US free press and their robust response, Tom takes a solo look at some of the top compliance stories from the past week. Jay returns next week.

  1. What is the role of a free press in the fight against bribery and corruption? I explore in an article for Compliance Week (Sub req’d)
  2. In his final column at the Wall Street Journal, Ben DiPietro, writes about how social activism prioritizes push for integrity, inclusion. In the WSJ Risk and Compliance Journal.
  3. Where is the Tesla board of directors? The SEC has issued a subpoena to them. Tom discusses in the FCPA Compliance Blog. Emily Glazer reports in the WSJ. More on the infamous ‘funding secured’ tweet on Compliance Week. (Sub req’d)
  4. Why is it stupid to become to the US to (1) demand and (2) accept a bribe? Sam Rubenfeld expains in the WSJ Risk and Compliance Journal.
  5. Is the UK pushing back on US jurisdictional outreach? Evan Norris and Alma M. Mozetic pose this question in NYU’s Compliance and Enforcement blog.
  6. Valerie Charles says to consider the new FCPA Corporate Enforcement Policy from the compliance program perspective. In this month’s SCCE Magazine.
  7. Would a no-deal Brexit be a disaster for compliance? Paul Hodgson reports in Compliance Week. (sub req’d)
  8. Maurice Gilbert interviews Moore & Van Allen’s Valecia McDowell on compliance, leadership and promotion to the firm’s management committee. On CCI’s, Connected.
  9. The scandal at Maryland around the death of Jordan McNair deepens. The Trainer resigns, the University accepts responsibility and his parents call for the firing of the head coach. See coverage in Sports Illustrated and ESPN.
  10. The number of podcasts on the Compliance Podcasting Network has now reached the 1000 podcast milestone next week. To celebrate, running each week in August I am running a week-long special series as a tribute. This week it has been a series on the the future of audit, compliance and analytics. Next week it will be a series on ethical culture, what it means, how to measure and assess it and how to drive it. You can download the entire series next Monday at noon, on iTunes. The series will post daily at 10 AM on the Compliance Podcast Network.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Last week Ben DiPietro announced his retirement from the Wall Street Journal (WSJ) Risk and Compliance Journal via Twitter. For a journalist practicing his trade in the realm of compliance in the early 21stcentury, it certainly was an appropriate manner to communicate with his readers. Ben wrote, “OK, some breaking personal news: I’ve given notice to @wsj, my last day is Aug. 14. What’s next? Stay tuned!!!!!”.

Even if you were not lucky enough to meet Ben in person, if you are in the compliance field you are certainly familiar with his work on the Risk and Compliance Journal. It is the only major US publication reporting on compliance, its enforcement and risk on a daily basis. It is required reading for all compliance professionals to keep abreast of the top stories of the day. But more than simply the daily news, the Risk and Compliance Journal is able to get some truly must-readpieces in with a ridiculous low word limit which I find nothing short of phenomenal.

Ben’s weekly column, Crisis of the Week, is a must read for not only Public Relations (PR) and communication professionals but for compliance professionals as well. Each piece lays out the problem and the company’s response from communications professionals. From the compliance perspective there are several great angles. Obviously, the communications response to the crisis is critical but Ben is able to tease out how communications can be improved in the compliance profession as well.

My Favorite Ben DiPietro Story #1

Ben is a native New Yorker. He was working in Hawaii for the Associated Press (AP) in 2000, when the New York Yankees and New York Mets finally met in the World Series. It was called a renewal of the subway series from the ‘50s between the Brooklyn Dodgers and Yankees. DiPietro went to his boss and asked for time off to go back to New York telling his boss this would probably not happen again in his lifetime. His boss denied his request.

Ben quit on the spot. He went back to New York and soaked up the atmosphere of the City for those 10 days in October 2000. He said it was one of the most unique times he had ever spent in the City. Strangers on the subway were talking about baseball in a way he had never heard during his lifetime. As a lifelong (largely suffering) Houston Astros fan, I can certainly appreciate his “series of a lifetime approach” to job security. I am not sure I would have had as much courage.

Ben has had a lengthy career in journalism, taking him literally from New York to Hawaii. He joined the WSJ in 2011 as a copy editor on the Real Time news desk. In 2013 he moved over to the Risk and Compliance Journal as editor and reporter. It is in this role that I came to know Ben and his work. He and his colleagues at the Risk and Compliance Journal have consistently put out solid reporting and excellent commentary on a wide variety of topics around risk and compliance. A sample of some of Ben’s recent stuff (in addition to the Crisis of the Week), is an opinion piece on the use of behavioral psychology in compliance, entitled Companies Try Nudging Their Way to Better Ethics, a Business piece, entitled Bumble Bee Chief Executive Taking Leave of Absence, a survey of the work companies needed to do (and still need to do) for GDPRa commentary piece on how labor strife brought down the Chief Executive Officer (CEO) at Air France and a Morning Risk Report on why Boards need and are now receiving more compliance training.

My Favorite Ben DiPietro Story #2

Ben is a long-time rock and roller from way back. (Or as my daughter would say – Classic Rocker.) Yet he and I share many of the same rock and roll loves not only of groups but Tours over the years. Once we engaged in an email exchange while he was riding home on the subway about his first rock and roll concert (Yes) and then debating which album tour was better. For any serious rock and roller, it does not get much better than talking about great albums and great shows.

Ben is also a Union Guy, a proud card-carrying member of Local Independent Association of Publishers’ Employees (IAPE) Local 1096. The IAPE has been run by and for the employees of Dow Jones & Company for over 80 years. It represents approximately 1,250 employees in 20 locations throughout the U.S. and Canada. Its members hold a wide range of jobs – from reporters to computer technicians and programmers, from ad sales executives to staff assistants. Local 1096’s motto “We Power Dow Jones” embodies the role of the IAPE which is to help publish and distribute the print and online versions of The Wall Street Journal and Barron’s and products like Factiva and MarketWatch.

August 14th is Ben’s last day at the WSJ Risk and Compliance Journal. If you have enjoyed, appreciated or learned from any of his work, I hope you will join me in sending him a tweet at @BenDiPietro1 to say thank you and wish him well in whatever he may decide to pursue going forward. Whatever it may, we will all be the better for it.

And finally to Ben – enjoy your summer of Ben. A most heartfelt thanks for your reporting, professionalism and friendship.

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, 2018

In what is fast becoming one of the top ethics and compliance conferences around, I hope you can join me at CONVERGE18, hosted by Convercent. (I perform consulting work for Convercent.) This year’s event will be October 8-11 at the Omni in Bloomfield, Colorado. The line-up of this year’s event is simply first rate with some of the top ethics and compliance practitioners around.

Some of the highlights include the following.

The Opening Keynote on Day 1, Patrick Quinlan, Chief Executive Officer (CEO) of Convercent, will discuss the global business climate and how innovation is providing new insights and opportunities for companies to improve their ethical performance and their bottom line. Global organizations are realizing that becoming more ethical directly impacts their bottom line. While they realize that driving ethics to the center of their business is the goal, few understand how to operationalize ethics on a daily basis with their employees. This Keynote will set the stage.

The Opening Keynote on Day 2, Philip Winterburn, Chief Product Officer (CPO) of Convercent, will be unveiling Convercent’s newest innovations to help companies make ethics-in-action a reality for Convercent’s customer worldwide. A focus of this keynote will be leveraging data to get more valuable insights into the ethical health of your company. Philip will illustrate how companies can advance from simple monitoring of activities (e.g. investigations and helpline calls) to conducting strategic analysis leveraging data science and Convercent’s Ethics Cloud applications. Through data science customers will be able to gain a new perspective on their programs by leveraging data within the Convercent application, third party industry data, and outside data from social channels.

Jay Fulcher, CEO of Zenefits, Walter Rakowich, former Pro Logis CEO, and Jewell Hoover, AARP, will participate on a panel, entitled “CEO As Activist: Whose Role is it anyway?”. In it they will explore how the vacuum of institutional ethical leadership and has been filled by a new entrant  – the ethical corporation. Today, consumers are looking for the companies they buy from to align to their own ethical values. The will explore such questions as “What is the CEO’s role in “taking sides” on societal issues like gun control, equal rights, and other ethical social issues? Should they?” This panel will explore the opinions and beliefs of leading CEO’s and highlight specific programs that companies are doing (or not) to make this happen.

In a General Session, Sharon Gebhard, Global Business Integrity Director from Unilever, will speak on “Driving Ethics In Action In A Global Organization”. Creating compliance and ethics programs that are inclusive of all employees around the globe is a constant challenge for multi-national companies. Effective programs cannot be a one-size-fits all, but rather must be tailored for the varying cultures of different countries. Sharon will share her insights and experience in creating Unilever’s worldwide ethics and compliance program.

Andre Martin, Vice President (VP), Talent Development and Chief Learning Officer (CLO) from  Nike, will speak on “Company Culture, The Ethical Imperative”. While many global organizations strive to have an ethical culture, few understand what the key strategies and programs are to deploy for success. Martin has been a leader in talent management for some of the most iconic brands in the world including NIKE, Mars, and Disney. Andre will share the key considerations and steps in transforming your company into one that has an exceptional ethical culture.

In addition to these Keynotes and General Sessions presentation, there will be some great breakout sessions. I am always excited to hear Hui Chen who will continue her thought leadership on measuring ethics and compliance: process vs. outcome. Keturah Pestel, Code of Conduct Program Manager at Thrivent, will discuss how compliance should partner with legal and Human Resources (HR) to get buy-in for sharing real stories and how you approach/report intake/investigations. She will also relate how to hold annual ethics awareness events that help raise the Code of Conduct profile, reinforce available resources, giving a platform for sharing our ethics survey results, and demystifying such topics as investigations.

Who should attend? Compliance professionals will learn from industry leaders how to strategically align your ethics programs with your CEO’s business goals. And how to elevate your thinking and programs to a whole new level. Legal professionals will hear about the key risks and regulations for global companies are constantly changing. They will learn better ways to visualize and manage risk through big data and correlation with finance and third-party information. C-Suite leaders will hear engaging main stage presentations and panels on how executives have aligned their ethics programs with their strategic business goals to create a premium brand and success in the market. HR professionals will hear industry leaders share their solutions and also pitfalls to avoid when partnering with ethics and compliance teams to create a healthy corporate culture that drives business success.

With the acceleration of the speak up culture and organizational accountability that social media is enabling and amplifying, companies need to incorporate integrity into every level of the organization. CONVERGE18 will help you do just that by addressing this ethical transformation head-on. Get the insights, information and solutions you need to put ethics into action. Join compliance executives from Salesforce, Kimberly Clark, Avis, U.S. Bank, AARP, Wells Fargo, Cheesecake Factory and many others to:

  • Network with 300 of your peers, including C-suite executives, legal professionals, HR leaders and ethics and compliance visionaries.
  • Gain insights from 35 speakers including Ethics and Compliance advocate Hui Chen, ECI’s CEO Pat Harned, NBA’s Deputy Chief Compliance Officer Steph Vogel, President at OCEG Carole Switzer and more.
  • Bring actionable takeaways back to your program from various session types including 2 keynotes, 5 general sessions, 12 discussion-based roundtables, 18 interactive breakout sessions for you to listen, learn and share.
  • The goal of CONVERGE18 is to arm you with information, strategy and tactics to transform your organization and your career by connecting ethics to business performance through process augmentation and data visualization.

I hope you can join me at the event. For information on the event, click here. As an extra benefit to readers of this blog, CONVERGE18 is offering a 50% discount off the registration price. Enter discount code TOMFOXVIP.

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, 2018

What was Wilson Picket’s top selling single? Amazingly it was Land of 1000 Dances. It is also one of my favorites tunes. Most people remember it for the “na na na na na” hook which, as legend has it, happened by accident when Frankie “Cannibal” Garcia, lead singer of Cannibal and the Headhunters, forgot the lyrics. They recorded the song in 1965 and took it to No. 30 on the Billboard chart. The melody to this section was also created spontaneously, as it is not in Chris Kenner’s original track. The song mentions 16 of the 1000 dances: the Pony, the Chicken, the Mashed Potato, the Alligator, the Watusi, the Twist, the Fly, the Jerk, the Tango, the Yo-Yo, the Sweet Pea, the Hand Jive, the Slop, the Bop, the Fish, and the Popeye. It was a true original and still rocks out to this day. So what does the Land of 1000 Dances have to do with podcasts?

Quite a bit it turns out,  as sometime next week, I will post my 1000thpodcast. I still thank Howard Sklar for introducing me to podcasts when he asked me to join him for the original incarnation of This Week in FCPA. As anyone who has worked with Howard will know, he is very knowledgeable on the subject matter of compliance and very passionate about the practice of compliance as well. Also, once you have become a friend of Howard Sklar, you have a friend for life.

My journey shifted when I premiered the FCPA Compliance and Ethics Report (now the FCPA Compliance Report) back in 2013. It has become my signature podcast where I interview someone about a compliance or ethics related topic. It posts weekly, every Monday. My other podcasts include the Compliance Report -International Edition where I focus on an international compliance topic, with a guest from outside the US. It was through this podcast that I became acquainted with Tim Khasanov-Batirov who created Compliance Man. We decided to do a series using Tim’s compliance expertise in emerging markets as the theme. We had great fun doing and are now developing a season two.

I have long been interested in business leadership. I approached a good friend Richard Lummis to ask if he would host me in such a series. Out of this came 12 O’Clock High, a Podcast on Business Leadership. In this series, we use history, current events, research and scholarship to discuss business leadership. It also features interviews with selected business leaders. Over this spring we have posted podcasts on the leadership lessons to be learned from American presidents, focusing on those leading up to the Civil War. It has been a great history lesson for Richard, myself and hopefully our listeners.

The intersection of the Board of Directors is often talked about but I could find no definitive podcast on this issue so I started one which became Across the Board, a podcast on Board of Directors and governance. Through this podcast I have been able to speak with some of the top thought leaders around Boards, Board governance and strategic management of risk. As readers of this blog know I am continually looking for ways to make compliance more effective as I believe that effective compliance makes companies more efficient and, at the end of the day, more profitable. To that end I started my newest podcast Innovation in Compliance, a weekly podcast series that focuses on innovation in tech, products and services which could be used by a compliance professional.

Finally, I am privileged to have three podcasts where I get to chat with some of the top compliance practitioners and commentators around. Matt Kelly joins me for Compliance into the Weeds, where we delve deeply, literally going into the weeds, of an Enterprise Risk Management (ERM) topic, on a weekly basis. Jay Rosen, Mr. Monitors himself, and I have a ton of fun each week on This Week in FCPA, which is the only weekly wrap up of FCPA and Compliance related events. Lastly, I host (and sometimes participate in) the only roundtable podcast in compliance, Everything Compliance, which was founded in 2016. The panel includes both Jay and Matt, plus Jonathan Armstrong, from Cordery Compliance Limited in London, and Mike Volkov, founder of the Volkov Law Group. The breadth and scope of these podcasts led me to create the Compliance Podcast Network, which is designed to bring the most topical podcasts to the compliance community.

What have been some of my top podcasts over the past five years? It has been a wide variety but rather amazingly my No. 1 podcast has been Branding Lessons from Count Dracula, on 12 O’Clock High. Apparently, I tapped into the intersection of vampires and leadership (who knew?). In a precursor to Compliance into the Weeds, Matt Kelly and I had a popular post when we discussed Alstom, Avon and Petrobras. David Kotz was a big favorite when I interviewed him on the FCPA Compliance Report for his book Financial Regulation and Compliance.Two top podcasts from the always fan fav This Week in FCPA were the Covfefe and I Left My Heart In San Francisco editions. The Everything Compliance gang was a favorite for two episodes as well, the 1st100 Days of the Trump Administration (Part 1 and Part 2). But nothing beats the month of January 2018 where my month long podcast series 31 Days to a More Effective Compliance Program, drew more than 200,000 downloads and impressions.

To help celebrate this month as the Land of 1000 podcasts, I am running episodes in each podcast series where I visit with a guest about the changes in compliance, Foreign Corrupt Practices Act (FCPA) enforcement, ERM and international compliance over the past five years. I am also featuring a special five-part series each month. This week, over on Innovation in Compliance, I am running a series on the intersection of Sherlock Holmes and compliance. Next week, on Compliance into the Weeds, Matt and I will explore the future of audit, compliance, and analytics. The following week, on the FCPA Compliance Report, I visit with Vincent DiCianni and Eric Feldman from Affiliated Monitors Inc. (AMI) on ethical culture. I will conclude this month’s special series with a new series on FCPA Opinion Releases. Watch for these special episodes and series. I know you will enjoy them and, more importantly, find them useful.

Where will the next 1000 podcasts take me? I can only say the journey is a big part of the exploration. One thing I am committed to is continuing the use of the podcast medium as it has become the prime medium for me to disseminate information, commentary and lessons learned for the compliance profession. I am working on some exciting new series for the fall and beyond so stay tuned….

To listen to a YouTube version of Wilson Pickett belting out Land of 1000 Dances, 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, 2018

What is due diligence? What is zero tolerance? How do these impact employee morale? How do these concepts link together? I thought about these questions and several more when the Houston Astros announced they had traded for closer Roberto Osuna earlier last week. The primary reason for these questions was that Osuna came off a 75-game suspension by Major League Baseball (MLB) for violation of its domestic abuse policy. It involved an incident for assault, for which Osuna pleaded not guilty to in a criminal case in Ontario.

What is Zero Tolerance? 

Overlaid with Osuna and his suspension were the Astros, who have (or perhaps more appropriately had) a zero-tolerance policy for domestic abuse. David Barron, writing in the Houston Chronicle, said the club’s response was that the zero-tolerance policy did not apply to Osuna because the alleged assault occurred before he joined the Astros and that Osuna would benefit from “great examples of character in our existing clubhouse that we believe will help him and his family establish a fresh start.”

This final sentence brings up another reason for such sanctions, rehabilitation. Should a person who commits a crime or unethical action be forever banned from practicing their craft? In his article Barron quoted Cindy Southworth, an executive vice president of the National Network to End Domestic Violence, who posed the following question “How do you balance redemption and behavioral change with holding people accountable?” She then answered her own question with “It’s messy. It’s not straightforward. But you can do both.” I would only add (parenthetically) that if your right arm is a cannon, you will probably get such a chance.

In the anti-corruption compliance world, one incident of unethical behavior would be seen as a red flag for similar behavior in the future. It might be enough to prevent such a person or entity from passing a due diligence background screening. On the other hand, a person convicted or found guilty of bribery and corruption might well serve their time, become rehabilitated and use those experiences to help others avoid the scourge of corruption going forward. 

What is Due Diligence?

If there is one concept that every compliance practitioner is familiar with it is due diligence. But what is due diligence? Is it a formal record check to see if a person is on the despicable persons list, have committed criminal acts or are at least alleged to have violated laws. Is due diligence determining whether someone or some other organization meets the minimum standards you set for yourself or your organization (See: zero tolerance, above)? Gonzales said, the “Astros say they truly don’t know the details about what took place between Osuna and the alleged victim.”

The Astros, in a statement released Sunday, said, “Our decision to acquire Roberto was based on the entirety of the information that we gathered during our extensive evaluation. That included as much information as we could gather about the specific incident and the charges that were filed but it also included as much information as we could gather about his actions before and after the incident, as well as his personal reputation among his former teammates and coaches. The information regarding this specific incident weighed heavily on our decision but when evaluating the entirety of the information, we felt that Roberto deserved a second chance.” Of course the Astros did not say what that information was or what the due diligence entailed.

These questions around the due diligence were further clouded in an article by Alden Gonzales, writing in an ESPN.com piece entitled “Roberto Osuna addresses Astros in closed-door meeting”, where he quoted Astros General Manager, A.J. Hinch, for the following, ““We really don’t know what to think or what to say or what to do and how to absorb all of this,” Hinch said. “But it’s right in front of us, and we will do our best as a team and as a family and a group to help him navigate through this, to help ourselves to navigate through this.””

What is employee morale?

Osuna is under charges in the province of Ontario for his domestic assault, to which he has pled not guilty. What will be the effect on all of this be in the Astros clubhouse, given the stances by several players on domestic abuse? Barron noted in his article that Astros pitchers Justin Verlander and Lance McCullers had previously made statements “against players who commit domestic violence.” Verlander said after the trade was announced “Obviously I’ve said some pretty inflammatory things about stuff like this in the past and I stand by my words. But I think in an ongoing case as is this one, we’ll see what happens.” Gonzales reported that Collin McHugh, the team’s representative with the Major League Baseball Players Association, was a bit more direct saying, “I don’t think anybody’s comfortable with the situation,” McHugh later told the media. “I don’t think anybody in baseball is comfortable with this situation. There’s a lot of ongoing things; there’s things that are happening. Nobody in this clubhouse is going to condone anything that’s happened off the field.”

As for the Astros, it is pretty clear that the right arm of Osuna is the only currency the club is concerned about as it mounts a defense of its 2017 World Series championship. Yet in the court of public opinion, the Astros have certainly dropped a few notches. ESPN’s Buster Olney said of the trade, “Surprising…disappointing…shocking….appalling.” Yahoo! Sports’ writer Jeff Passan was even more direct when he said the Astros had engaged in “moral bankruptcy by acquiring a player of tainted character, because, in this case, he can get outs in the ninth inning.”

Perhaps the final word comes from the New York Times Extra Bases columnist Tyler Kepner who wrote about the trade and the two players involved, the former Astro Ken Giles and the new Astro Roberto Osuna, “the choice of Osuna over Giles makes it seem as if the Astros’ real zero-tolerance policy is for Giles’s misdeeds, [Giles cursed his manager] not Osuna’s — a disturbing message from a team that should have found a better option.” Indeed.

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, 2018