1000Yes, indeed the Grateful Dead can and does inform your compliance regime as today is my 1000th blog posting on the FCPA Compliance and Ethics Blog. To say that I ever thought I would see this day or this many blog posts, would portend a level of clairvoyance that even Carnac the Great could not conceive of pontificating upon. I had struggled with a theme for this momentous accomplishment but my sublimely-grounded English wife brought me down from the ethereal clouds with the following suggestion, “Even an old dog can learn new tricks.” Nothing like being married to a younger woman.

So today, I want to write about some of the things I have learned on this 4+ year journey, which began in late 2009/early 2010 after a serious automobile/bicycle event (Box Score: Hummer-1 Tom-0) where about the only thing I had on my hands was time while I was at home convalescing. I started to explore the world of social media, engaging on Twitter, webinaring from my home office and blogging. I was so un-savvy in this arena that about the only positive thing my teenaged daughter could say about me was “Dad, you are so unhip, you are retro. But that is cool too.” The first thing I learned was that even a complete computer misfit and social media idiot could set up a blog on WordPress. It is not only easy but free. I cannot say with any pride that some of my early blogs were very good but I can say that for a lawyer, whose only skill was to be able to perform word processing in Microsoft Word, I could type and then upload a blog post into WordPress. At that point in my blogging career, that was a major accomplishment.

Although it did take some time, I learned how to stop writing like a lawyer, with full citations in each blog, coupled with as much lawyerese as I could manage, by finally adjusting to a blogging format. I also relearned an old lesson, which says that if you really want to learn about a subject, write on it. I remember one of the first things I learned when researching the Travel Act was that this Kennedy era law, passed largely through the efforts of Bobby Kennedy, was designed to help in the fight against organized crime. So who would say a 60 year old law cannot be used for a 21st century purpose? Or maybe even a Watergate-era like the Foreign Corrupt Practices Act (FCPA) could not have an expansive use, beyond that for which it was passed in 1977? I also learned that if you put out solid content people will read and listen to what you have to say.

I learned there are some great people out there blogging in the ethics and compliance space. I have met some fabulous colleagues through my blogging who have not only been incredibly supportive but whom I now cherish as good friends. Some of them include Mike Koehler, the FCPA Professor, for his scholarly rigor and continued intellectual challenges. Dick Cassin, the Dean of FCPA bloggers, for his unflinching support to myself and so many others. Mike Volkov, former prosecutor and DC-insider, who is always around to bounce a tough question off. Howard Sklar, who was my This Week in FCPA podcast partner, until we lost him to the corporate world. Francine McKenna, a great and generous mentor for myself and many others and the go-to person all issues in and around the accounting world. Jim McGrath, the internal investigations guy, who brings a former state prosecutor’s perspective to how investigations should be handled and critiqued. Matt Ellis, whose focus on and insights into South America (as in – it’s not a country) continue to shine a light on anti-corruption issues south of the border. Matt Kelly, Editor of Compliance Week, who saves some great witticisms for his weekly blog posts. These are but a very few of the folks I am now privileged to call friends because of my blogging.

I learned that there is way too much white noise in the FCPA space. The FCPA Professor calls them FCPA Inc. and Mike Volkov derides them as the FCPA paparazzi. Whatever you might call them, they put out reams and reams of information, sometimes useful but many times not. What I have tried to do is synthesize some of the most useful for the Chief Compliance Officer (CCO), compliance practitioner or anyone else who does the day-to-day work of anti-bribery/anti-corruption compliance. There are many, many things you can know but a far smaller subset of what you need to know. I try to bring to the compliance practitioner what they need to know. That is why the subtitle of my blog is ‘The Nuts and Bolts of FCPA Compliance’. I have tried to write about things which the compliance professional can use in the everyday practice of compliance.

I have learned that blog posts, which I thought were the most important, may turn out to be the least viewed blogs. Conversely, posts I did not think would be of great interest turned out to have the largest number of one-day hits. For instance, the largest single number of one-day hits I had was an article from two years ago about the SNC-Lavalin corruption investigation in Canada. [For a blog about FCPA compliance-go figure.] The second largest number was a recent blog post using the GM internal investigation as an exploration in the differences between a corporate legal function and its compliance function.

I have learned that by committing to something, you become much better at it. My first year of blogging, I tried to put out 2-3 blogs per week but beginning in 2011, I committed to a daily blog post. Once I made that commitment, blogging became a part of my workday. Once it became a part of my workday, it was like any other project or assignment. I had to set aside the time to work on it. It has made me a much more efficient and better writer to know that I need write something, during my workday. Yes there have been times I was up at 5 AM to write a post or stayed up way past my school-night bedtime trying to crank something out but those situations have become few and far between as I became more disciplined about my blogging.

But most of all I have learned that blogging is fun. It is fun because it is a challenge to write about something in an informative and engaging manner. It is fun to tie a Shakespeare play to a compliance and ethics theme. It is fun to read a week’s worth of Sherlock Holmes’ stories and tie a compliance topic to a story each day for one week. It is fun to find out what happened this day in history and use it as a hook to grab your readers’ attention. It is fun to engage in a debate with the FCPA Professor on a topic of mutual interest, where we look at the same thing, yet see it from different perspectives. And it is fun when you meet someone for the first time and after you introduce yourself, they say to you “When is a rose, not a rose? When it’s a FCPA violation”.

Where will the next 1000 blogs posts take me? I have no clue but if they are as much fun as the first 1000 posts have been I hope that you will continue to join my on This Long Strange Trip.

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, 2014

One of the best things about the Foreign Corrupt Practices Act (FCPA), UK Bribery Act and other anti-corruption practice areas is the top notch quality of commentators. While Mike Volkov regularly derides the FCPA paparazzi for being scare mongers and the FCPA Professor chastises FCPA Inc. for attempts to paint FCPA enforcement in the worst possible light so as to draw clients to their collective resources; there is also a great set of bloggers, writers and pundits who put out solid, useful and well-reasoned pieces on FCPA and Bribery Act issues. In this blog post, I would like to highlight some of my favorite posts from some of my favorite commentators over the past year.

From the Dean

If you do not know who the Dean of FCPA bloggers is you have not been looking too long or too hard. It’s Dick Cassin, who is the Founder, Editor and Publisher of the FCPA Blog, which consistently reports on all things compliance around the globe. But for me, it is when Dick writes from the heart, he is able to articulate what many of us are feeling but cannot seem to put into words. My favorite post from Dick this year was his tribute to President Kennedy on the occasion of the 50th anniversary of the President’s assassination, entitled “And So The Legend of Camelot Was Born”. Dick ended his post with the following quote from Teddy White, “He advanced the cause of America at home and abroad. But he also posed for the first time the great question of the sixties and seventies: What kind of people are we Americans? What do we want to become?” The question still stands.

From the FCPA Professor

If you have never debated the FCPA Professor, live or via email, you should. But be prepared to bring your A-Game and your authority. He posts daily and has become a great resource for guest posts over the years which challenge the status quo on a variety of legal and compliance issues. Each morning I cannot wait to see what the Professor has to say that day. However, what I have really come to appreciate is his Friday Round-Ups. Each Friday, the Professor gives us a round-up of recent FCPA and related news, articles and developments not otherwise covered by him in his Monday – Thursday posts. I should also say he saves some of his best witticism for these posts. My favorite post from the Professor this year was the milestone of his 100th Friday Round Up, appropriately entitled “The 100th Edition of the Friday Round-Up”. Tune in each Friday for another edition of this great resource.

From Jim McGrath

I continually bemoan to Jim McGrath that he needs to post blogs more often than his twice or thrice weekly output. The reason being they are so good and I want to see more of his stuff. As you might guess from the title of his blog, Internal Investigations Blog, he tends to focus on investigations; some criminal, some civil, some internal and some external. McGrath is an ex-prosecutor and tends to view things through that prism and give us a different perspective of law enforcement. He writes about investigations inside and outside the realm of anti-corruption but his insights are certainly applicable to any FCPA or Bribery Act investigation.

My favorite post from McGrath this year was his piece on 7-Eleven, entitled “Human Trafficking Concerns for 7-Eleven in Wake of Payroll Scam”. In this article he detailed the federal investigation into allegations that 7-Eleven franchisees in New York and Virginia had engaged in human trafficking and possible involvement by the franchisor through its payroll system. His piece was a cautionary tale for the compliance practitioner about the need for internal controls, internal monitoring and internal investigations. McGrath ended his post with the following, “Further, its future due diligence efforts as regards suppliers and franchisees should include a review for human rights abuses such as those suggested here. Otherwise, it will have to sell a helluva lot of Slurpees to pay the fines, costs, and disgorgements that a failure to do so will no doubt entail.” In other words, trust but verify.

From Mike Volkov

Mike Volkov has worked at the Department of Justice (DOJ) on Capitol Hill and for Big Law. He now has founded his own firm, the Volkov Law Group and writes the Corruption, Crime & Compliance blog. Mike primarily writes about anti-corruption but he also writes about health care fraud, anti-trust compliance and enforcement and many other topics. While I cannot determine if he set out to have a theme this year, Volkov has written many articles this year which focus on the role and position of the Chief Compliance Officer (CCO), the need for independence and resources required for the position.

My favorite post from Volkov was entitled “The Only Thing [In-House Counsel and CCOs] Have to Fear, Is Fear Itself”. His title is a play-off of what I believe to be the most inspiring FDR speech so that alone is worth the price of admission. He also tells one of the great stories about his days from Big Law. Volkov related that he wrote his views on the UK Bribery Act and the length of time it would take for any meaningful enforcement to take place, “I received a call from the firm’s London partners and was chastised for undermining their entire “marketing” program. (In stark contrast, many clients wrote me and thanked me for my “honesty.)” As my 16 year old daughter might say, ‘Sometimes you just have to keep it real’.

From Across the Pond

If you do not subscribe to thebriberyact.com, you are missing out on the best site for all things UK Bribery. thebriberyact.com guys, Barry Vitou and Richard Kovalevsky QC, consistently give their readers both practical insight and in-depth analysis. Their interviews of the relevant players allow all compliance practitioners to develop insight into what the top UK regulatory officials are thinking about on the Bribery Act. They also write from the very British perspective of understatement and skewering satire, which is more than a ton of fun for us Americans to read.

My favorite post which illustrated all of the above traits was from March and is entitled “Parliament report calls for Bribery Act review: Our opinion – Junk in. Junk Out.” In this post, they took on the call for the urgent scrutiny of the UK Bribery Act by a parliamentary select committee claiming that the Act has met with “confusion and uncertainty.” To this rather inane claim, the guys responded “We cannot think of a piece of legislation which has sparked much more commentary, advisory, much of it on line and completely free, including our own eponymous website.” But my favorite line was their dénouement to the British MP who brought up the need for clarification of the UK Bribery Act, “And, Tony from Alderly PLC, if you’re reading feel free to give us a call.  We can help you.”

My Favorite from 2013 (Think Big)

My favorite blog post of the year was actually posted on December 28, 2012 by Matt Ellis, Founder and Editor of the FCPAméricas blog, which was entitled “Wal-Mart, Go Big on FCPA Compliance”. The reason that it is my favorite of 2013 is because it is the one post that I have thought the most about, talked the most about, read the most about and it even inspired me to write on the issue myself. In his post Ellis challenged Wal-Mart to “go big” on compliance in the wake of its world-wide FCPA investigation and policy implementation. He wrote, “Wal-Mart should instead use the FCPA investigation, and the attention it has generated, as an opportunity. It is an opportunity to go big on compliance.” Ellis went on to detail some specific suggestions that Wal-Mart could implement to help the fight against bribery and corruption that, due to its size and market share, would be in a unique opportunity to put in place.

Within the anti-corruption compliance community there was a noted buzz about Ellis’ piece and his suggestions. I was inspired to write a blog post, entitled “Wal-Mart-Be a Leader in Compliance”, due to the ideas articulated by Ellis. Seemingly inspired by Ellis’ example, Michael Scher, writing in the FCPA Blog, in a piece entitled “Michael Scher talks to the feds”, used the Wal-Mart investigation as a jumping off point to ask the DOJ to resolve several open issues on compliance as he saw them. In others words, Ellis piece (hopefully) got not only Wal-Mart to thinking but several others of us. That is why it is my favorite blog post of 2013.

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, 2013

Most fortunately, the final week of the baseball season is here. This means that I no longer have to contend with living in the same city as the joke of an alleged major league team – the Houston Astros, at least when the regular season ends next week, the Astros stop playing and the play-offs begin. To say that the Astros season has been ridiculous for masquerading as a Major League Baseball (MLB) team would be a compliment but it moved to the absurd last week as one play summed it up better than anything that I could have made up – the butt-slide play. In this play, Astros shortstop, Jonathan Villar, slid face first into the butt-cheek of Reds second baseman Brandon Phillips. (For a video clip of the play, click here.)

The butt-slide play sums up the Astros 2013 season of futility. From the start of the season, with a team made up of largely AAA players, to the end of a season made up mostly of A-AA players. In between we’ve been treated to the Astros ending a 23 year relationship with the Astros wives charity, via a terse one-line email (i.e. you’re fired); to the interview of owner Jim Crane who informed us that he had made $100MM in the trucking business so he must be the smartest guy in the room; to a current 105 losses while on their way to yet another record-loss season; let’s not forget their TV contract with Comcast and the fabulous viewing figures recorded on Sunday by the Nielsen rating service, which racked up a fantastic score of 0.00, with an average audience of zero households viewing the game and, finally, all of this while being the most profitable team in the history of MLB. But, still, the ‘butt-slide’ says it all. When your slide into second base becomes not only a metaphor for the team’s entire season but fodder for an entire nation’s laughingstock, it really is time to cash it in.

Yesterday in the FCPA Blog, in a post entitled “Who Speaks for the Compliance Officers?”, Michael Scher said “The [International] Chamber [of Commerce] apparently will not be satisfied until there is little or no enforcement.” Scher’s statement was based on the letter that the International Chamber of Commerce (ICC) sent to the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) complaining about the FCPA Guidance, issued last year, which as Scher stated, “The letter has been correctly criticized for off-target “belly-aching.”” Scher’s criticism follows that of Michael Volkov,  see his blog post “FCPA “Reform”: Another Shot in the Dark” in Corruption,  Crime and Compliance and Jessica Tillipman’s blog post “Let’s Just Be Honest for a Moment” also in the FCPA Blog.

Instead of whining and belly-aching there might be another way for corporate America, and indeed the ICC, to approach the Foreign Corrupt Practices Act (FCPA) compliance. That path was laid about by Leslie Dach, in an article in the October issue of the Harvard Business Review (HBR), entitled “Don’t Spin a Better, Story. Be a Better Company”. The article was quite interesting for the following information which appeared with the author’s credentials, “Leslie Dach wrote this column shortly before stepping down as the executive vice president of corporate affairs at Walmart. He previously served as vice chairman of Edelman, a global communications firm.” While this statement certainly does not make clear why Dach left Wal-Mart, (i.e. did he ‘resign to pursue other opportunities’?) it does give one pause for some reflection.

Nevertheless, I found Dach’s thesis quite interesting. Dach’s bottom line is that he believes “it is a huge mistake to assume that once you’ve explained your perspective, the public will embrace you…I know what doesn’t work: thinking you can tell a better story without actually becoming a better company.” Ultimately Dach advises, “If a drumbeat of criticism starts up against your company, don’t rush to raise your voice above it. Stop to listen. And commit to getting better.” Dach detailed several areas inside the company where goals such as sustainability, women’s economic empowerment and more-healthful food were “compatible with building a stronger business.” He cited Wal-Mart’s increased efficiency of its trucking fleet and turning its waste stream into recycling income as examples of sustainability. He said that buying from local, women-owned businesses strengthened the company’s ties with local communities. He said that offering more healthful food meant more relevant products for the company’s consumers.

I thought about Dach’s ideas in the context of Wal-Mart and other companies which are going through very public FCPA-based or other corruption investigations. Publicly released information indicates that Wal-Mart may be spending over $1MM per day on their ongoing internal investigation and getting their compliance program up to speed. But what if the company took it a step further and applied Dach’s ideas to compliance. In his article he wrote about the company’s efforts to source $20bn of products from women-owned businesses. This took a concerted effort to identify which merchandising areas had the potential to produce such an amount of product, which the company could sell in its stores. This was coupled with incentives for the company’s buyers to show progress in purchasing goods from women-owned enterprises. But even more the company “took a 360-degree approach to the work, engaging our entire supply chain and our customers, communities, and employees.” Here is the part I liked best about Dach’s piece,  while the tone was set by Chief Executive Officer (CEO) Mike Duke “ultimately, the challenge isn’t the CEO’s job, or one person’s job; it is everyone’s job.”

Last December Matt Ellis wrote a great piece on his blog site, FCPAméricas, entitled “Wal-Mart, Go Big on FCPA Compliance”, where he challenged the company to innovate in compliance “by playing to its strengths.”  He cited examples of work in the company’s supply chain; its opportunities to “educate foreign audiences on [anti-corruption] compliance” through teaching persons in the communities where it has locations on “how to identify and avoid risks of petty corruption.” Ellis ended his piece with the following, “Wal-Mart has the spotlight. Time will tell if it chooses to use it.”

I think that Dach’s challenge to create a better company, coupled with Ellis’ specific challenge for Wal-Mart to go big for compliance, present an excellent juxtaposition to the whining and belly-aching of the ICC. Rather than claim that the FCPA is (1) too difficult to understand; (2) too hard to follow; and (3) unfair, they could advocate Dach’s approach to use the law as a basis to become better businesses. I cannot think of any non-criminal enterprises which aver that they want to do business unethically and corruptly. Companies faced with intense FCPA or other anti-corruption law scrutiny, such as GlaxoSmithKline PLC (GSK), might well take this opportunity to move outside the ordinary and become better companies by doing compliance right and better. Such actions would not only put them in better stead with the regulators but make them better companies. In other words, don’t simply whine like the ICC and butt-slide into second base.

Also, as it appears Leslie Dach is no longer working for Wal-Mart, they may want to give him a call to help them figure out how to do so.

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Episode 6 of the FCPA Compliance and Ethics Report is up. In this episode, I talk about the role of senior management in a compliance program. To watch or listen, click here.

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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, 2013

In December 2012 the BBC online service reported that Rolls-Royce Motor Cars Limited (Rolls-Royce) was in talks with the UK Serious Fraud Office (SFO) regarding potential allegations of bribery and corruption in Indonesia and China. It was reported that the investigation began in 2011 when the SFO requested information from Rolls-Royce about possible bribe-paying in those two countries. This prompted Rolls-Royce “to bring in a legal firm to conduct an internal investigation earlier this year, which uncovered potential misbehaviour in other countries as well as the two named by the SFO.” The investigation focused on certain intermediaries involved in the countries in question. The Guardian reported the initial bribery issue was reported by a whistleblower, former Roll-Royce employee Dick Taylor, and involved allegations of bribery and corruption in Indonesia and China. According to the Financial Times (FT), Taylor had made these allegations for at least six years that Rolls-Royce paid bribes to secure business for its civil aircraft engines in Indonesia. At least as long ago as 2006 Taylor took his concerns public by posting statements on local newspaper and industry news internet sites. The Guardian stated that Taylor “claimed that Tommy Suharto – a son of the late President Suharto – received $20 million and a Rolls-Royce car to persuade the national airline, Garuda, to order Rolls-Royce Trent 700 engines in 1990.”

The FCPA Blog reported earlier this month that a pseudonymous blogger, named by the FT as ‘Soaringdragon’, claimed that “Rolls-Royce propelled itself into the Asian market with the help of payments passed to an executive of Air China and China Eastern Airlines. Executive Chen Qin, who worked for both airlines, allegedly acted as Rolls-Royce’s intermediary in two pivotal deals inked in 2005 and 2010, worth $2 billion in all. Chen is thought to have been detained for corruption in April 2011.” All the allegations currently made against Rolls-Royce were for actions prior to the application of the UK Bribery Act, which became effective on July 1, 2011.

Rolls-Royce is reported to be co-operating with the SFO in the investigation. The company announced that it found concern regarding the markets of China, Indonesia and other markets as well. The company reportedly released its findings over to the SFO which has not yet announced whether it would open a separate investigation or if it had made any decisions on whether it would prosecute the company. Chief Executive John Rishton was quoted as stating, “I want to make it crystal clear that neither I nor the board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance. This is a company with exceptional prospects, and I will not accept any behaviour that undermines its future success.”

Last week Rolls-Royce announced that it had retained Lord Gold to review its overall compliance program. The FT reported “Having to bring in Lord Gold to examine the robustness of the company’s compliance efforts indicates just how much Rolls-Royce wants to avoid an SFO, or worse, a DoJ probe. He has been brought in to Rolls-Royce precisely to avoid the costs associated with BAE’s bribery investigation, and thus his role is much more similar to the one Lord Woolf played at BAE.” For a company known to have an opaque culture, bringing in Lord Gold “has the potential to upset the Derby-based company’s deep-seated culture more than anyone in its recent history.”

I thought about this move by Rolls-Royce when I re-read a posting, entitled, “Wal-Mart, Go Big on FCPA Compliance”, by my colleague Matt Ellis, in his blog, FCPAméricas. In this post he detailed some of the ways that he thought Wal-Mart could use the opportunity afforded by its bribery and corruption scandal in Mexico “as an opportunity. It is an opportunity to go big on compliance.” Matt talked about how Siemens changed its culture after having paid the highest fine for violations of the Foreign Corrupt Practices Act (FCPA) in the history of the world ever. Moreover, Matt listed several things that he thought Wal-Mart was uniquely positioned to accomplish because of its size and strength, which were as follows:

  • Wal-Mart could use these same tools to build a state-of-the-art corruption risk-tracking program to which its compliance practices could respond in real time.
  • Wal-Mart could use its enormous leverage in international markets to educate foreign audiences on compliance.
  • Wal-Mart could train these landlords of the stores they lease internationally on compliance.
  • Wal-Mart could require landlords to put a FCPA or other anti-corruption compliance programs in place themselves.
  • Wal-Mart could begin to teach communities how to identify and avoid risks of petty corruption.
  • Wal-Mart could partner with local municipalities to launch reporting centers in its Supercenters.

I am not certain Lord Gold could accomplish some of the things that Matt has suggested that Wal-Mart put in place as Wal-Mart is the world’s largest retailer and Rolls-Royce is, well the name says it all, Rolls-Royce. But after the black-eye the British defense and aerospace industry took in the BAE corruption and bribery scandal, Rolls-Royce may be able to use this opportunity to lead a culture change in this British market segment. According to the FT, “Lord Gold’s job at Rolls-Royce will be closer to that of Lord Woolf, who made wide recommendations at BAE after it became embroiled in a corruption and bribery scandal. If Lord Gold is similarly radical, he could completely change the way Rolls-Royce does business, forcing it to limit its use of intermediaries, or even prompt the resignation of senior executives, as happened at BAE.”

I think that the lessons for the compliance practitioner from Rolls-Royce are two-fold. First and foremost, get ahead of the curve. If you believe that you have found evidence of systemic bribery and corruption, your company has to self-disclose and work with the appropriate enforcement agency, whether that is the US Department of Justice (DOJ) or the SFO. But more than self-disclosure and extraordinary cooperation, be proactive in attacking the policies, processes and procedures which led to the allegations of corruption.

Bringing in a Lord Gold, who has dealt with “A multibillion-pound spat between oligarchs, investigating cronyism in British politics, and helping one of the world’s best-known brands respond to corruption allegations have been his bread-and-butter since the veteran litigator set up his own advisory boutique in 2011”, can certainly help give you credibility on either side of the Atlantic. On the US side, the first name that pops in my mind is Louis Freeh, former Director of the Federal Bureau of Investigation (FBI), whose work has ranged from the Penn State/Jerry Sandusky investigation to the Trustee in the MF Global bankruptcy to his appointment to the Ethics Committee of FIFA. If you want another name, I can certainly recommend John Hanson, aka “The Fraud Guy”. He is a retired FBI agent, has worked in the fraud investigations and forensic accounting practice of a large publicly traded international financial consulting firm and has been an independent monitor under Deferred Prosecution Agreements (DPAs). Both of these guys know their stuff and are very well respected in the compliance community.

I think the clear import of Matt Ellis’ article is to ‘think big’ and outside the box. If you proactively attack what went wrong that led to bribery and corruption, I think it will pay off dividends with the DOJ or the SFO.

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, 2013

Today we continue our interview series with last year’s New Comer of the Year-Matt Ellis, author of the FCPAméricas Blog.

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1. Where did you grow up and what were your interests as a youngster?

I grew up in Dallas, TX. I was lucky to graduate from the best private school in the city, where I was on significant financial aid. I loved it and excelled. My senior year I was elected student body President, and tried hard to do more than just plan good parties. Texas made a lasting impression on me. The heavy influences of Mexico gave me a taste early on for Latin American culture. The state’s entrepreneurial spirit eventually empowered me to launch my own law practice.

 2. Where did you go to college and what experiences there led to your current profession?

I went far away to Dartmouth where, in a small town in New Hampshire, I was exposed to the world. My first-year roommate was a Sikh from India who had never stepped foot in the United States. I took courses in Latin American politics, studied Spanish in Barcelona and Art History in Italy, taught English in Switzerland, and interned in the East Wing of the White House, where I observed Bill Clinton, up close, interacting with foreign dignitaries. College made me want to see the world.

After graduating, I moved to Argentina where I planned to stay for three months. I wound up staying for three years. My goal was to learn Spanish fluently, at a professional level, and I had to immerse myself. I moved in with a group of young Argentine guys who didn’t speak English. I got a job at General Motors Argentina. Ninety percent of my work was in Spanish and 100% of my socializing. I had no choice but to become fluent — if not, I wouldn’t have a pay check or a social life. Then the President of GM Argentina persuaded me to study Portuguese as well. He knew that Brazil would be the next big thing. This was before the term “BRIC” existed. He was right. Today, Brazil is the source of a good amount of my work.

 3. After beginning your career in a large, multi-national law firm you went to the World Bank. Can you tell us why you moved over, what you did and how has it informed your compliance and ethics practice going forward?

Very few attorneys from the United States have the chance to work on anti-corruption matters at The World Bank’s Integrity Vice Presidency (INT). After law school at Georgetown, I was working at a major law firm with a leading FCPA practice. We were advising INT on the development of the World Bank’s Sanctions program, grappling with questions like: How does the Bank ensure that the funds it loans to the developing world actually make it to building the roads and bridges, purchasing the medicine, etc., and are not diverted into the pockets of corrupt government officials?  INT was staffed with a smart group of people from every corner of the world, and I hit it off with the team. When I received an offer to work as an investigator and litigation specialist, I seized it. I spent two years at the Bank, conducting internal investigations throughout Central Asia and Eastern Europe.

I took three vital lessons from my time at the World Bank. Each has informed my FCPA compliance work since then. First, contrary to the view that corruption is “cultural” or “accepted” by certain people, I learned that ethical business is an important concept wherever you are in the world. On the front lines, no matter the country or culture, rarely are citizens accepting when public officials use government positions for personal gain. Toleration should never be mistaken for endorsement. Second, the rapidly developing anti-corruption norms with which we work are having a profound effect on the ground throughout the globe. The more that corrupt actors are brought to justice, the more that individuals see universal business standards at work, and the more they are empowered themselves to push back. Third, an appreciation for cultural nuance is essential to compliance. When introducing World Bank procurement standards to a small, regional consulting firm in India, or vetting a sales agent in Brazil, practitioners have to account for context, language, and background to do the job effectively.

 4. Many people think that South America is a country. You seem to have different thoughts on the subject. What are some of the unique or specific challenges when working on compliance related issues in South America? Are they different if you represent an indigenous company rather than a US company with a South American affiliate?

Compliance in Latin America must respond to the local landscape to work. Corruption risks in the mountainous jungles of Colombia are different from those in the concrete jungles of Sao Paulo. While companies can usually count on the police in Chile, in Mexico the police are often the problem. To design an internal reporting program in Argentina that works, practitioners must understand the inherent skepticism that people there have for anonymous tips.

Cultural nuance is even more important when working on compliance for Latin America-based companies. Imagine a local company that has been built over the years where corruption is around every corner, and has now gone global. Education on compliance takes time and steady commitment. Buy-in is achieved person-by-person, unit-by-unit. With time, companies begin to see the value in adhering to international standards. Only when business leaders appreciate the stakes are they willing to engage in the wholesale reform and commitment of resources necessary for compliance to work. The learning curve is steep. But the trends of globalization are going in only one direction.

5. Why did you start your Blogsite, what did you hope to achieve from it and what will be your focus going forward?

I want FCPAméricas to serve as a bridge between two worlds. One world involves United States law that is currently driving anti-corruption compliance by creating powerful incentives. The other world is where the bribery usually occurs, a world of drastically different cultures, norms, languages, and histories. The blog’s aim is to try to connect the two.

My experiences interacting, living, working and attending school with people from around the world drive the blog’s direction. I relate my job as an FCPA lawyer to the jobs many of my graduate schoolmates now have in the foreign service, working in embassies all over the world, where they liaise with foreign officials and help U.S. companies working abroad navigate the waters. I perform a similar service. I help companies manage risks when doing business in far-off countries. I help them understand the rules of the global economy. Why is this important? In an age of globalization, the world of business opportunity has suddenly grown a lot bigger. At the same time, companies cannot do business like they used to. In the past, cross-border business could be done with a handshake, and the hand often had a $20 bill in it. Nowadays, multi-million dollar investments are made with the click of a button. But bribes can put people in jail. As a result, the challenge of global business no longer is about paying off the right person to get the job done. It is about ensuring that your company thrives while following applicable international rules. This means structuring compliance programs to be effective. This requires local know-how. I help companies bridge the gap.

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, 2012