This Week in FCPA-Episode 19, the International Edition

Show Notes for Week ending August 26, 2016

  1. John Kerry: Corruption is ‘root cause’ of terrorism, on FCPA Blog.
  2. Eric Ben-Artzi Op-Ed piece on why he turn down his whistleblower award, as featured in the Financial Times.
  3. Lessons from History-the Tudors on compliance, from the FCPA Compliance Report.
  4. FedEx trial debacle for the DOJ, and Paul Pelletier’s recommendation to fix recent spate of ill-fated and advised DOJ prosecutions, as featured in the FCPA Blog.
  5. Hallmarks 1-5 of the Ten Hallmarks of an Effective Compliance Program, as featured in the FCPA Compliance Report.

 

Show Notes for Week ending August 12

  1. SEC In-House ALJ Program Upheld. Compliance Building and Second Circuit Court of Appeals opinion.
  2. Abbott, sales pressure and suicide. NYT article, “Driven to Suicide by Inhuman Pressure to Sell
  3. Airbus under investigation for allegations of bribery to make airliner sales in emerging markets. FT article Airbus probe poised to shake up Boeing rivalry”.
  4. Lily King, finger wagging and calling out the Russian, ­­­­­Yulia Efimova for her history of doping. Inc. article, “Yes, U.S. Swimmer Lily King Was Absolutely Right to Blast Yulia Efimova for Doping
  5. Jay Rosen appearance on Masters of Disasters
  6. Maurice Gilbert’s list of questions every CCO should ask in an interview.
  7. Link to Red Flag Group registration and information for Webinar 2 of a 4 part series on Supply Chain risk management, click here.

ARodAlex Rodriguez announced his retirement from baseball, effective Friday, August 12. In a New York Times (NYT) article he said, “Saying goodbye may be the hardest part of the job,” “But that’s what I’m doing today. As far as 700 [home runs], or any of those type of milestones, I would have had an unbelievable, fun time going after them, those are not the cards I was dealt.” So, in other words, the Yankees released a player, who at one time had the richest contract in baseball.

One of the cards with which Rodriguez was dealt was to be one of the greatest natural talents to hit a baseball in the past 50 years. The card he personally added to the mix was the use of performance enhancing drugs, usually claiming that he did not take them but occasionally admitting so on the public stage as well. The real problem for Rodriguez is that at 41 he is washed up as a major league baseball player. He will end his career with 656 home runs and I for one am glad that such a public cheater did not become the fourth person to slam 700 home runs. Not even the New York Yankees, who still owe him $21MM through the end of next season, could put up with his lack of performance any longer. He will be a ‘Special Advisor’ to the club which is the business world equivalent of an unwanted senior executive being moved to ‘Special Projects’. Still on the payroll but released from any real work.

Rodriguez’s sorry exit from baseball forms the basis for today’s blog post and most interestingly the NYT had another article in its Sunday edition from which every Chief Compliance Officer (CCO) and compliance practitioner should draw a valuable lesson. It was found in the Corner Office column where Adam Bryant interviewed Kevin Warren, the Chief Operating Officer (COO) for the Minnesota Vikings, in a piece entitled “Championships Are Won in the Details. In the business (and compliance world) this translates to execution. It does not matter how impressive your paper compliance program might be, if you do not execute the program going forward, you will not be doing compliance. Baker Hughes, Inc. (BHI) CCO puts it more colloquially when he says that execution is where the rubber meets the road.

Yet Warren has some additional insights from his position that I think apply to the CCO or compliance practitioner. When asked about his leadership style, he said that it had evolved. He described this evolution through an interesting analogy saying, “in the first part of my life and my career, I was rolling through stoplights. I was so busy. And now in my position, I stop at a stoplight and really take an opportunity to observe the surroundings. Maybe there’s someone on the side of the road who needs some help. Maybe there’s someone in a rush that needs to go ahead. That’s where I am now. There are more demands on my time, but I’ve become a much better listener. I’ve slowed down my thought process and tried to make sure I’m there for everyone.”

As a compliance leader, you must be available to employees literally from the Boardroom to the shop floor. If a compliance matter comes up, there must be someone there to advise, even if that advise is only to confirm the employee’s understanding of doing business in compliance or that their plan of action is within your company’s anti-corruption risk management parameters. The other observation is that compliance is one of the few corporate disciplines which is literally “there for everyone.” In my podcast series Unfair and Unbalanced, I have debated my co-host Roy Snell on this point but I have come around to Roy’s point of view. In many ways, compliance is becoming the key corporate discipline as it moves into the fabric of an organization. This is because it is the fulcrum by which so many corporate disciplines intersect.

Warren had a couple of additional insights for any compliance practitioner. One was around hiring. As you might expect for someone at his corporate level, by the time a candidate gets to him for an interview, the candidate has been thoroughly vetted in technical competence. So Warren wants to obtain a fuller measure of the candidate. He does so by inquiring into their passion for the position and whether they will give a top effort. These are excellent points for any CCO as well. Most compliance practitioners are passionate about compliance. They view it as more than simply a job. As a leader in compliance, you should inquire into this and if you find it in your employees, not only work to harness that passion but also use it going forward. That is one way to become a great leader.

Conversely, Warren intoned that when it comes to advice for employees “I think the best thing is for people to be really honest with themselves. Step off the treadmill a little bit and be honest with yourself about what you really want to do, what you want your legacy to be, what you want your life to look like. And people should really focus on nirvana. I’ve been blessed to reach nirvana because in my quiet times along this journey, I would sit and dream and write things down that I wanted to do. You most likely can’t reach a goal that you have not already achieved in your head. If, in your mind, the best you focus on is running an eight-minute mile, you will never run a six-minute mile.”

There are many people new to the compliance profession. One of the things that struck me at the recent Compliance Week 2016 was how many first time attendees were present. There are many new faces in compliance. If this is what you want to do, get out there and do it. You can attend conferences and meet others in the compliance profession. You can go the 2016 SCCE Compliance and Ethics Institute this September in Chicago, where there is a specific event designed to provide mentorships. The SCCE has one of, if not the top compliance certification programs going and you can become a certified compliance professional. Not only will such a certification give you personal satisfaction but it also provides a market differentiator when you are interviewing so your own personal brand will profit.

If you remember Rodriguez from the 90s during his tenure with the Mariners, you recall one of the greatest raw talents of all-time. Rodriguez chose to waste all of that by using steroids and ruining his legacy forever. He denied, then admitted, and then denied again that he used performance enhancing drugs. He later filed an appeal for his 2014 season long suspension for such use but when the day came for him to testify in an arbitration proceeding, he literally ran out of the hearing room as he would have been required to testify under oath for the first time in his life about steroid use. That to me will always be his lasting legacy.

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, 2016

Show notes for Episode 16, for the week ending August 5.

  1. Matthew Stephenson article on the Global Anti-Corruption Blog on JP Morgan sons and daughters FCPA Enforcement Action. My take on this piece on the FCPA Compliance Report.
  2. Financial Times Op-Ed Piece on why the US government must lead the global fight in corruption.
  3. FCPA Blog article on FinCen investigation into beneficial ownership in large real estate transactions involving cash expands.
  4. Bureau van Dijk was made available a replay of its webinar on beneficial ownership issues, featuring Mike Volkov.
  5. From Corporate Counsel – the article “It’s Clear Now That Employees Must Cooperate in Probes”. This details a case where a New York court upheld the termination of two Marsh employees for failure to participate in a company internal investigation.
  6. From Above The Law – Catalyst demonstrates how leveraging eDiscovery tools is an effective harness Data analytics to help companies show a commitment compliance in response to the New DOJ FCPA Pilot Program.
  7. Jay recaps his Weekend Report.
  8. I preview my upcoming blog and video podcast series on the Ten Hallmarks of an Effective Compliance Program.

IMG_3310It has been a slow week with no Foreign Corrupt Practices Act (FCPA) enforcement actions announced, although the Wall Street Journal (WSJ) did report that one with JPMorgan Chase is imminent. I thought I would provide a potpourri of upcoming issues and events for your consideration this Friday.

Managing Supply Chain Risk – Webinar Series Continues

Imagine you are sitting in your compliance department office and you get a call from the Chief Compliance Officer (CCO) who tells you that he wants you to put together a Supply Chain (SC) risk management program. (Or worse, you are an Associate General Counsel (AGC) and he receives a similar call from the General Counsel (GC).) You do some quick checking and you discover that you have some 60,000 vendors within your company’s SC database. Where do you begin?

Fortunately for you, Jared Connors, Chris Sidnik and myself from the Red Flag Group are presenting a four-part webinar series on Supply Chain risk management. On Thursday, August 18 at 10 CDT we will be presenting our second installment on issues around Supply Chain risk management, with Part II – Breaking your supply chain into manageable pieces for a risk based approach.

We detail some of the keys to creating a manageable approach to SC risk management programs, assess some of the outside pressures your company might face and lay out a four step process to not only obtain the information but also action steps you can take for remediation. You can register for the webinar at the Red Flag Group website, which can be found by clicking here. The webinar is free. I hope you can join us.

Riding to Fight Cancer

As many readers know I used to be a serious cyclist, which alas I am no longer. However my friend Doug Cornelius, the Founder and Editor of the Compliance Building, has taken up the mantel and is riding this week in the Pan Mass Challenge. Doug is riding to help raise money in the fight against cancer and for his friends and family who have suffered from this disease. The Pan Mass Challenge ride is 192 miles over two days from Sturbridge to Provincetown. If Doug’s meets his fundraising goal, he promises to ride a full Century (100 miles) on a third day of riding. Trust me when I say, you have to be in great cycling shape to ride not only 192 miles in two days but maybe a little crazy to tack on another 100 miles for good measure on the next day. Monies raised from the ride will go to the Dana-Farber Cancer Institute. I hope you will join me in supporting Doug and consider a donation to help him meet his fundraising goal. You can check out Doug’s page by clicking here.

Leadership Lessons Podcasts

As you may know I have founded a podcast on business leadership, entitled 12 O’Clock High. As with most lawyers, such concepts were not taught where I went to law school, are still sadly lacking in most law school curriculum and many in-house types are lacking in formal training on leadership. This becomes more acute when lawyers move into the compliance profession, which is more akin to business process role than a straight legal function. Additionally, as the Department of Justice (DOJ) made clear when they announced their Pilot Program for FCPA enforcement going forward, they will be assessing whether compliance practitioners are given the opportunity to advance in a corporation, in both disciplines and functions other than compliance. This makes learning about leadership all the more critical for those who did not study it in an academic setting.

I have two recent podcasts, which I want to highlight for your consideration. The first deals with the leadership failures demonstrated by the English governing class before, during and after the Brexit vote and most importantly, what lessons the business leader can take away. You can listen to the episode, Leadership Lessons from Brexit, by clicking here. In my most recent episode, I consider the leadership lessons from Abraham Lincoln, tailored for the business professional. You can listen to this episode, by clicking here. You can also check out the podcasts on iTunes.

This Week in FCPA

Looking for the most authoritative source of the week’s comings and goings in all things FCPA, compliance and ethics related. Or, in the words of Monty Python, are you simply looking for something completely different. Either way, you should check out the weekly blab session that Mr. Translations, aka Jay Rosen, and myself, have each Friday morning. This Friday we have a special early edition at 8:30 AM CDT, as our usual time is 9 AM CDT. If you cannot make it that early, I cross-post each blab session on Facebook, YouTube and as a podcast on the FCPA Compliance Report so there are plenty of avenues for you to enjoy our unique take on the week’s events and issues. To check out the blab session live, click here.

A Sneak Peak at Increasing Your Practical Knowledge of FCPA Compliance

I am working on a project I have wanted to put out there for some time, which is a short podcast series on the Ten Hallmarks of an Effective Compliance Program, as articulated in the FCPA Guidance. Over the last two weeks of August, I will post a podcast and corresponding blog post for each Hallmark. If you are a reader or listener (or both) and want a quick review on what constitutes a best practices compliance program or if you are new to the compliance realm and want to hear from the Nuts and Bolts guy, this will be a great series for you to check out.

 

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, 2016