In this special podcast series, sponsored by Affiliated Monitors, Inc. (AMI); I am joined by AMI Managing Director Rod Grandon. We will be considering the responsibility of federal contractors to maintain their status as “Responsible Contractors” and explore the benefits of having an effective compliance and business ethics program not only to increase business efficiencies and profitability but prepare you in good stead if the regulators come knocking. In this episode, we introduce the concept of Responsible Contractors.
In this series, we examine the impact of two key Federal Acquisition Regulations (FARs), FAR3.1002 and FAR 52.203-13, Contractor Code of Business Ethics and Conduct, in the context of other authorities relating to corporate integrity programs, along with proactive steps contractors can take to better position their companies should federal enforcers come calling. It has certainly been Grandon’s experience that companies that proactively embrace robust ethics and compliance programs tend to become better companies for their employees and customers. Grandon emphasized that the government is focused on what it terms “responsible contractors”. While there is no FAR laying out the definition of this term, Grandon noted it has come to have a very broad meaning.
First, it addresses performance characteristics that a responsible contractor “should have the ability to perform as it said that it would perform pursuant to its contract.” This includes a contract with goods or services. It is beyond ethics and compliance “as it encompasses the concept that a contractor should have the financial wherewithal to complete the contracted task, the facilities or physical plant to perform the work, accounting systems and purchasing systems that are up to the task, property management systems, and all other such systems should be in place. It also means having a workforce that is capable of performing. Finally, it also includes a workforce that is committed to compliance and promoting all they do with integrity.”
Day: September 17, 2020
CONVERGE is in its 5th year of bringing together the world’s leading companies for 2 days of dynamic speakers, thought-provoking breakout sessions, and opportunities to connect with like-minded professionals. This year the conference has gone virtual. You will leave the conference with new resources and best practices allowing you to continue the hard work of driving ethics to the center of your business. In today’s episode I visit with Ian Foxley. We visit about his panel at Converge20 on Whistleblower Protection: The Dawn of the Next Era.
Foxley’s dramatic whistleblower tale brings life to what could otherwise be—and often is—an abstract conversation about the appropriate response to whistleblowing. Join this panel for an enlightening conversation about the theory of whistleblowing, how it differs in practice, and how compliance professionals can lay the groundwork for an ethical response. For more registration and information on Converge20, click here.
In 2016, one of the most interesting non-international focused FCPA enforcement actions was announced by the SEC. It involved a clear quid pro quo benefit paid out by United Airlines, Inc. to David Samson, the former chairman of the Board of Directors of the Port Authority of New York and New Jersey, the public government entity which has authority over, among other things, United’s operations at the company’s huge east coast hub at Newark, New Jersey.
The reason that it is so interesting from an enforcement prospective is that it is not foreign corruption but domestic corruption, therefore not subject to the foreign government official requirement of the FCPA. However, the actions of United’s former CEO, Jeff Smisek, in personally approving the benefit granted to favor Samson violated the company’s internal controls around gifts to government officials. That sounds suspiciously like a books and records violation of the FCPA. The $2.4 million civil penalty levied on United was in addition to its NPA settlement with the DOJ, which resulted in a penalty of $2.25 million. Former Chairman Samson also pled guilty for putting pressure on United to reinstitute a flight service which was near his weekend residence.
At the time, United’s Code of Conduct prohibited “United employees from directly or indirectly making bribes, kickbacks or other improper payments to government officials, civil servants or anyone else to influence their acts or decisions” and that “[n]o gift may be offered or accepted if it will create a feeling of obligation, compromise judgment or appear to improperly influence the recipient.” Only the United Board of Director’s could grant a waiver to the code and none was sought or obtained by Smisek. The Order concluded, “The [Chairman’s] Route was initiated in violation of United’s policies.”
Three key takeaways:
- It is very unusual for the FCPA to form the basis of a domestic bribery violation.
- A Code of Conduct can be an internal control.
- Even a CEO must follow internal controls.
Welcome to a special five-part podcast series, sponsored by Exiger, on topics From Third-Party Risk Management to Supply Chain Risk Management: Exiger on the Evolution in Supplier Compliance in COVID. Exiger was founded to fight financial crime, fraud and terrorist financing by introducing technology-enabled solutions to the market’s biggest supply chain, risk, investigation, litigation, and compliance challenges. A global authority on risk and compliance, Exiger serves the world’s largest banks, Fortune 1000 companies and government agencies and regulators. Over the course of the series, we will put a spotlight on Financial Institutions with Tara Loftus and Samar Pratt; focus on corporations with Aaron Narva and George ‘Ren’ McEachern; consider the Federal Government and Supply Chains with Carrie Wibben and Vishnu Anantatmula; review the pillars of good compliance with Brandon Daniels and Carrie Wibben; and end with a review of third-party risk management solutions with Erika Peters and Skyler Chi.
In Part 4, we consider the pillars of good compliance with Brandon Daniels and Carrie Wibben. Wibben is a Senior Vice President, National Security & Intelligence, based in Exiger’s McLean office. As the former Deputy Director of the Defense Counterintelligence and Security Agency (DCSA), Carrie joins Exiger following a distinguished career in homeland defense spanning various government agencies – including the US Department of Defense, the Executive Office of the President, and the Special Security Directorate. Brandon Daniels is the President of Global Markets. A regulatory expert and technology practitioner, Brandon brings more than 15 years in senior management across the financial services, life sciences and energy sectors. He has a reputation for technological innovation in regulatory investigations and compliance management.
Join us tomorrow where we conclude our five-part series by looking at some of the new challenges and new solutions for third party risk management and investigations.
For more information on Exiger, click here.
For more information on Brandon Daniels, click here.
For more information on Carrie Wibben, click here.
Welcome to the only roundtable podcast in compliance. Today, we have the full quintet of Jonathan Armstrong, Jay Rosen, Matt Kelly, Jonathan Marks and Mike Volkov for a potpourri of discussions and ending with a veritable mélange of rants and shouts outs.
- Jonathan Armstrong critiques the recent Aven decision which every compliance practitioner needs to be cognizant of going forward. Armstrong shouts out Abache Tundy, a Nigerian astronaut stranded on the Moon, who is attempting to Crowd Source a rescue mission home.
- Jay Rosen considers recent criminal charges brought by the DOJ and the first Opinion Release in 6 years. Jay rants about the Facebook plan to fight Trump’s fake news posting, which he believes is over 3.5 years too late.
- Matt Kelly considers the actions by the Postal Service execs to gut US mail service leading up the election, from the compliance perspective. Matt rants about Curt Schilling and his ill-advised business decisions off the field.
- Mike Volkov reviews the Business Roundtable’s Statement on the Purpose of a Corporation at the one-year anniversary of it release. He shouts out to Steve Bannon, who is looking at 51-63 months of jail time for fraud.
- Jonathan Marks considers the IIA for beginning the discussion to reconfigure its 3 Lines of Defense but says it does not go far enough. He rants about the unfairness of the criminal justice system, focusing on the Lori Laughlin sentence.
- Tom Fox shouts out to the employees of the German regulator BaFin who set up an investment pool for Wirecard, a company they were allegedly regulating.
The members of the Everything Compliance are:
- Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
- Mike Volkov – One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com
- Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
- Jonathan Armstrong –is our UK colleague, who is an experienced data privacy/data protection lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com
- Jonathan Marks is Partner, Firm Practice Leader – Global Forensic, Compliance & Integrity Services at Baker Tilly. Marks can be reached at marks@bakertilly.com
The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Compliance Evangelist. Everything Compliance is a part of the Compliance Podcast Network. He can be reached at tfox@tfoxlaw.com
In today’s edition of Daily Compliance News:
- House report blasts both Boeing and FAA. (NYT)
- GOP lawmakers blast TikTok sale. (WSJ)
- Companies now prioritizing keeping talent. (WSJ)
- Et tu BP? (Houston Chronicle)
