In this episode I present a live podcast recording made at the 6thLEC Compliance Conference in Sao Paulo last week. In the podcast I interviewed Carlos Ayres, partner at Meada, Ayres and Sarubbi and Matt Ellis, Member at Miller & Chevalier. We discuss the burgeoning compliance scene in Brazil and across the continent of South America. Ayres reflects on some current issues facing compliance practitioners in region. Ellis discusses the raft of new anti-corruption laws in the continent. They both discuss the challenge of representing multi-nationals across the continent who may be subject multiple ongoing investigations and enforcement actions. They point out some of the unique compliance issues for the region. It is fascinating discussion of the current state of compliance and anti-corruption enforcement in Brazil and across the entire continent.

As former DAG Sally Yates returns to private practice at King & Spalding, in the words of LL Cool J, “Don’t call it a comeback, I been here for years,” Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. Michael Cohen explodes across the compliance universe. Matt Kelly writes in Radical Complianceand Buzzfeed, Tom and Matt podcast on Compliance into the Weeds, Francine McKenna quotes Matt and Mike Volkov in her piece on Finally Joe Mont considers it from the Bank Secrecy Act compliance angle in Compliance Week(sub req’d).
  2. Sally Yates returns to private practice at King & Spalding in the  Washington Post.
  3. Katie Smith is the first chief ethics and compliance officer at Convercent, and has brought with her some new ideas about how to use technology to improve E&C Corporate Counsel
  4. GIR/JAC– Lawyers laud criminal division’s diversity provision for monitors (Pansonic Avionics DPA)
  5. FCPA Blog– Dick Cassin writes about Colombia investigating a dozen companies for overseas bribery
  6. FCPA Blog– Ankura’s Spinelli and Pilosio: Why is the construction industry so vulnerable to corruption?
  7. WSJ Risk & Compliance Journal– Ben DiPietro — The Morning Risk Report: Companies Need to Look Deeper at Supply Chains
  8. WSJ Risk & Compliance Journal– Henry Cutter — DOJ Targets ‘Duplicative Penalties’ Through Increased Coordination. See full text of Rosenstein remarks here.
  9. Tom reports on a week of speaking to compliance professional in Brazil. See his blog post Reflections on Week of Compliance in Brazil.
  10. Tom announces publication date of his next book, The Complete Compliance Handbook, which will be available on May 21, 2018 on It is available for PreSale here.

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

I conclude this five-podcast exploration of working with monitors, where I have been joined by Don Stern, Managing Director, Corporate Monitors and Consulting Services at Affiliated Monitors, Inc. (the sponsor of this five-part series) on working with monitors. In this final episode we consider lawyers using monitors, most typically where the clients are under investigation for some regulatory issue, such as a Foreign Corrupt Practices Act (FCPA) enforcement action.

Stern said the biggest mistake lawyers make is to wait too long before bringing in an independent monitor. His experience is that if  you wait until after the conclusion of a matter, you have lost valuable time and potentially cost yourself money, in the form or higher fines and penalties, by waiting. The government expects compliance shortcomings to be remediating during the pendency of an investigation. A monitorship can even begin before  self-reporting to the government. This is because a company should want to find the problem before it voluntarily reports the problem to the government. In this manner, the company could receive get the credit for having done so. It also allows the company to package the entire process “in a way to say not only we discovered the problem, not only are we reporting the problem, but we fixed the problem. We did with an independent third party and we may even want to keep that third party with us to independently assess how we do going forward. That’s very persuasive to prosecutors and I’ve certainly seen situations where in some cases it’s resulted in a declination or in a significantly diminished” fine and penalty.

This is using an independent monitor in a pro-active manner which demonstrates how serious the company is about compliance. It can also be a way to demonstrate any illegal conduct may simply have been an outlier and does not reflect the values, culture and the way the company generally does business. This can provide quite a positive story to present to prosecutors, particularly under the new FCPA Corporate Enforcement Policy.

If your company is active in the remediation phase, particularly through an independent monitorship, it is looking at the problem in a holistic approach. It is more than assessing that problem, coming up with some solutions and then implementing the solutions. More importantly an organization is taking that information and looping it back in, in a literally a feedback loop so the companies can improve their compliance program. This is an approach which can be persuasive to regulators.

Stern noted this approach is even more critical for what he called ‘repeat customers’ or recidivist actors. He said government regulators are becoming much more sophisticated in understanding whether a compliance program is simply a paper program. The government wants to know if this a real program. One clear indicia is the feedback loop from an assessment by an independent monitor looping the information back to the company, making changes, testing to see whether the changes are real changes are working changes.

One final area that using an independent monitor is in the area of credibility. One thing I have consistently heard from white-collar practitioners perhaps the most important thing in any FCPA investigation or enforcement action is credibility with the prosecutors. By having a truly independent monitor who is even independent of the outside counsel, who may be heading up an investigation and assessing the compliance program; is one more way to bring that credibility to a, in front of the prosecutors. Stern noted that as the former US Attorney for Massachusetts, your reputation in representing clients before the government is absolutely critical. Having that independence as a monitor can aid a company by giving credibility to their compliance program efforts and this can pay off with real benefits in terms of lesser penalties all the way to a declination.

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

In this first emergency Compliance into the Weeds podcast, Matt Kelly and myself review the information that Michael Cohen was paid by several US and international multi-national organizations for insight on and influence upon the Trump Administration. We consider it from the compliance angle and what steps a company is going to take if it hires the President’s personal lawyer as its paid lobbyist.

For more see Matt’s blog post on Radical Compliance entitled “Oh Lord, Michael Cohen Risk Is Now a Thing

And for even more see Matt’s piece in entitled, “It’s Harder To Pay Off Foreign Governments Than The US One

I continue my five-podcast exploration of working with monitors. I am joined by Don Stern, Managing Director, Corporate Monitors and Consulting Services at Affiliated Monitors, Inc. (the sponsor of this five-part series) on working with monitors. Today we consider the various manners in which regulators at all levels, from the federal, to state and local levels, use monitors. We also consider how monitors can be used outside the regulatory context in areas as diverse as mergers and acquisitions, business ventures, IP and licensing.

Most compliance practitioners are aware of the role monitors play in the Foreign Corrupt Practices Act (FCPA) enforcement arena. However, the use of independent monitors is much broader than simply in criminal or civil enforcement actions involving a Deferred Prosecution Agreement, Non-Prosecution Agreement, Corporate Integrity Agreement or other form of resolution. Federal agencies use monitors for a wide variety of roles to ensure compliance with agreements.

At its most basic level, an independent monitor is a way for the government to extend its reach. Both in terms of lengthening out the time that you have true government oversight and in terms through many of the techniques we discussed earlier:  focus group meetings, review documents, talking senior and middle management. It is a very cost-effective way for federal, state and even local governments to extend out their reach. This cost-effectiveness is driven home by that fact that the cost is not borne by the governmental entity or the regulators. The cost is borne by the entity involved.

Stern pointed to the use of an independent monitor by the Federal Communications Commission (FCC) to ensure that the conditions around anti-competitive and other issues, the FCC approved for the merger between AT&T and Direct TV, were fulfilled. He went on to provide an example where “one of the conditions was  they had to offer a discounted broadband service to certain low-income households. The FCC  wanted access to broadband for low income families, particularly for school kids. The monitor assessed the marketing program on this issue, looking at their efforts to provide discounted broadband, low income households.”

Stern provided another example of regulator use of an independent monitors, this time by a state regulator, the Attorney General of Rhode Island in the area of hospital conversions. This is the situation where a non-profit hospital is purchased by a for profit chain. In such situations, the state attorney general in most states will have to approve that transfer of assets from charitable assets to for-profit assets, applying certain conditions. It could be in the area of recruiting  physicians or requiring the acquiring institutions to keep the mental health services open. You don’t have to spend x millions of dollars on new equipment. It is generally around very specific metrics  and it is “increasingly being used by government agencies as a way of not only having confidence that the regulatory decisions are being followed but provides some comfort and confidence to the public knowing that who is looking over the shoulder of the organizations in the public’s interest.”

Yet an independent monitor can be used in non-regulatory areas. One that certainly comes up is pre-acquisition due diligence in the FCPA realm. An independent monitor can be used to assess whether a target or takeover candidate has a robust compliance program. These same concepts also work in the licensing area in pre-acquisition work and even for company which want to test the audit compliance of customers.

The bottom line is independent monitors can come in and look at the system of controls in a wide variety of regulatory and legal areas. This is true because there is no substitute for having somebody independent of the company with some expertise and common sense and practical reality coming in and asking, how are you doing? Stern concluded, “You don’t have to do this all the time. It isn’t something you need to do even every year, but every once in a while, have somebody come in and take a hard look at how you’re doing and then reporting back internally to the company. It is money well spent because you have established that the organization being reviewed has a good program and if you need to fine tune your program in certain ways. Here again, I think that’s all to the good.”

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