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Returning to Venezuela: Part 1 – Bribery, Corruption and the Risks You Must Confront Before You Enter

When US energy companies talk about returning to Venezuela, the conversation almost always starts with opportunity. Yet the CEO of Exxon has said Venezuela is ‘uninvestible’. There is another set of problems that every corporate compliance team will face if their company decides to enter the Brazilian market. For the compliance professional, it must start with corruption. Not episodic corruption. Not bad actors at the margins. Systemic, embedded, institutionalized corruption that touches government agencies, state-owned enterprises, procurement systems, and the judiciary. This is not a theoretical risk. It is the operating environment.

The Department of Justice (DOJ) has made clear in the Evaluation of Corporate Compliance Programs (ECCP) that high-risk jurisdictions require tailored, well-resourced, and empowered compliance programs. Venezuela is the textbook example of why. Over the next several blog posts, we will explore key issues every company and CCO will face when considering whether to enter (or re-enter) Venezuela. In Parts 1 and 2, I will consider the top 10 anti-bribery/anti-corruption (ABC) risks a compliance professional will face. (Part 1, risks 1-5; Part 2, risks 6-10). We will then consider AML risk, export control and trade sanctions, security risks, and end with operational risks.

1. Systemic Corruption Is the Baseline Condition

Risk

Venezuela is not a market where corruption appears as an exception. It is the default condition against which all business activity must be measured. For compliance professionals, this means risk assessments cannot ask whether corruption exists. They must assume it does and ask where pressure will arise. Licensing, customs, inspections, labor issues, utilities, and currency all present opportunities for improper advantage. Boards must understand this upfront. Entering Venezuela without acknowledging systemic corruption is not optimism. It is a governance failure.

Compliance Framework Response

Before addressing individual risks, the compliance function must establish baseline principles governing how risk is assessed and managed in Venezuela.

  1. Assume corruption pressure exists. The risk assessment does not ask if corruption will arise, but where and how.
  2. Controls must be operational, not theoretical. Policies without authority, monitoring, and escalation are not controls.
  3. Risk ownership must be explicit. Every risk category has a business owner, a compliance owner, and a board oversight hook.
  4. Boards govern risk; they do not run operations. Oversight is mandatory. Tactical interference is prohibited.

2. PdVSA as a Prominent and Persistent Risk

Risk

Any discussion of bribery risk in Venezuela must begin with Petróleos de Venezuela S.A. (PdVSA), which has been at the center of some of the most significant corruption schemes in modern enforcement history, involving contracts, invoices, intermediaries, and payment routing. Indeed, 10 years ago, I wrote that it would cost a fortune to schedule and confirm a meeting. But companies make the mistake of treating PdVSA as a single risk node. In reality, it is a network risk. Joint ventures, service contracts, maintenance agreements, and procurement relationships all radiate outward, exposing the organization to corruption. If your counterparty touches PdVSA, you have inherited PdVSA risk.

Compliance Framework Response

The starting point is a Venezuela-specific bribery and corruption risk assessment, refreshed whenever business scope, counterparties, or operating conditions change.

This assessment must:

  • Map all government touchpoints.
  • Identify all third parties by function, not just by name;
  • Distinguish systemic risk from transactional risk; and
  • Flag PdVSA exposure explicitly.

Outputs are not static reports. They are control design inputs.

3. Joint Ventures and Service Contracts: Shared Risk, Shared Liability

Risk

Joint ventures are often framed as risk mitigation tools. In Venezuela, they frequently do the opposite. Local partners may be politically connected. Governance structures may be opaque. Control rights may be illusory. Compliance professionals must scrutinize who appoints management, who controls procurement, and who interacts with government officials. Under the ECCP, regulators ask whether compliance has authority commensurate with risk. In a Venezuelan JV, symbolic compliance oversight is not enough.

Compliance Framework Response

1. Assessment Controls

  • Government interaction mapping by function and frequency
  • Identification of pressure points where discretion exists
  • Historical analysis of delays, denials, or unexplained variability

2. Management Controls

  • Pre-approval requirements for all government-facing interactions
  • Clear prohibitions on facilitation payments
  • Mandatory escalation for any demand tied to speed, access, or discretion

Monitoring

  • Trend analysis of approvals and delays
  • Comparison of processing times across regions or projects

1. Board Oversight Questions

  • Where do we face the highest government discretion risk?
  • What interactions cannot proceed without a compliance sign-off?

4. Procurement as the First Corruption Flashpoint

Risk

Procurement is where corruption pressure materializes fastest. Vendors expect to be paid for access. Officials expect influence. Intermediaries promise to “make things happen.” This is even more true in Venezuela. This is where third parties begin to matter and where compliance must be in place before contracts are signed. Retrospective diligence does not cure a corrupted procurement process. Boards should demand visibility into how vendors are selected, not just who they are.

Compliance Framework Response

1. Assessment Controls

  • Explicit identification of direct and indirect PdVSA touchpoints
  • Mapping of PdVSA influence over pricing, approvals, and payments
  • Review of historical enforcement patterns tied to similar structures

2. Management Controls

  • Enhanced due diligence for any counterparty touching PdVSA
  • Compliance approval of all PdVSA-facing contract terms
  • Segregation of duties around invoicing and change orders

Monitoring

  • Continuous review of intermediaries interacting with PdVSA
  • Red flag monitoring for unusual invoice timing or routing
  1. Board Oversight Questions
  2. How are PdVSA’s risks different from those of other SOEs we engage with?
  3. What controls exist beyond standard third-party diligence?

5. The Illusion of “Routine” Government Interaction

Risk

Companies often underestimate corruption risk by labeling interactions as routine: inspections, permits, customs clearances, utilities, and labor approvals. And yes, the DOJ has said it will back off on enforcement of small payments, which may be traditionally made, but in Venezuela, routine functions are often monetized.  Compliance programs must draw hard lines early and firmly.

Compliance Framework Response

1. Assessment Controls

  • Governance and control-rights analysis
  • Identification of who appoints management and controls procurement
  • Mapping of partner government relationships

2. Management Controls

  • Contractual compliance rights with audit and termination authority
  • Compliance veto power over high-risk activities
  • Mandatory training for JV-appointed personnel

Monitoring

  • Periodic compliance audits of JV operations
  • Review of partner interactions with officials

1. Board Oversight Questions

  • Where do we lack real compliance leverage in our JVs?
  • Are control rights aligned with our risk exposure?

Join us tomorrow as we look at ABC risks 6-10, including third parties, extortion, organized crime, currency issues, and a weak rule of law.

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Sunday Book Review

Sunday Book Review: January 18, 2026, The Top Books on Innovation ’26 Edition

In the Sunday Book Review, Tom Fox considers books that would interest compliance professionals, business executives, or anyone curious. It could be books about business, compliance, history, leadership, current events, or anything else that might interest Tom. In this episode, we look at some of the top books on innovation, both those already published and those scheduled for 2026.

  1. Twin Transformation: A Gripping Tale of How AI and Sustainability Converge, and the Race to Get It Right by Michael Wade & Konstantinos Trantopoulos 
  2. The Innovation Approach: Overcoming the Limitations of Design Thinking and the Lean Startup by David C. Roach
  3. The Shortest History of AI: The Six Essential Ideas That Animate It by Toby Walsh
  4. The Coming Wave: AI, Power, and Our Future by Mustafa Suleyman & Michael Bhaskar
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31 Days to More Effective Compliance Programs

31 Days to a More Effective Compliance Program: Day 18 – Risk Assessments

Welcome to 31 Days to a More Effective Compliance Program. Over this 31-day series in January 2026, Tom Fox will post a key component of a best-practice compliance program each day. By the end of January, you will have enough information to create, design, or enhance a compliance program. Each podcast will be short, at 6-8 minutes, with three key takeaways that you can implement at little or no cost to help update your compliance program. I hope you will join each day in January for this exploration of best practices in compliance. In today’s Day 18 episode, we discuss the essential role of risk assessments in anti-corruption compliance programs.

Key highlights:

  • The Importance of Regular Risk Assessments
  • Methodologies for Risk Assessment
  • Steps in Conducting a Risk Assessment

Resources:

Listeners to this podcast can receive a 20% discount on The Compliance Handbook, 6th edition, by clicking here.

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31 Days to More Effective Compliance Programs

31 Days for a More Effective Compliance Program: Day 17 – Podcasting for Compliance

Welcome to 31 Days to a More Effective Compliance Program. Over this 31-day series in January 2026, Tom Fox will post a key component of a best-practice compliance program each day. By the end of January, you will have enough information to create, design, or enhance a compliance program. Each podcast will be short, at 6-8 minutes, with three key takeaways that you can implement at little or no cost to help update your compliance program. I hope you will join each day in January for this exploration of best practices in compliance.  In this Day 17 episode, we explore the transformative potential of podcasting in compliance training and fostering corporate culture.

Key highlights:

  • Podcast Storytelling: A New Approach
  • Branded Podcast Series for Compliance
  • The Benefits of Podcasting for Compliance

Resources:

Listeners to this podcast can receive a 20% discount on The Compliance Handbook, 6th edition, by clicking here.

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Blog

Greek Philosophers Week: Part 5 – Euclid and Proving Your Program Is Effective

We conclude our exploration of how ancient Greek philosophers influence compliance and ethics in 2026 and beyond. In this series, we have considered Socrates, Plato, Aristotle, and Pythagoras. Today, we conclude with Euclid.

Pythagoras teaches compliance professionals how to measure, analyze, and detect ethical risk through data, proportion, and pattern recognition. But measurement alone never closes the loop. At some point, regulators, boards, and senior leadership ask a harder question: Can you prove your compliance program actually works? That is where Euclid becomes the natural capstone of this philosophical journey.

Euclid was not concerned with numbers in isolation. He was concerned with structure, logic, definition, and proof. His Elements did not merely describe geometry. It demonstrated how a coherent system is built from first principles, how each part follows logically from the last, and how conclusions are proven rather than asserted. That methodology aligns almost perfectly with modern expectations for compliance program effectiveness under the DOJ Evaluation of Corporate Compliance Programs (ECCP).

If Pythagoras gives compliance professionals the tools to see risk, Euclid shows them how to organize those insights into a defensible, durable system. We also circle back to Hui Chen, the original Corporate Compliance Counsel to the DOJ, who would challenge Chief Compliance Officers (CCOs) and their counsel when they came before the DOJ in settlement negotiations, demonstrating the effectiveness of their compliance programs through data rather than anecdote.

First Principles Are the Foundation of Compliance Credibility

Euclid begins with definitions, axioms, and postulates. He does not assume shared understanding. He defines it. Everything that follows depends on clarity at the start. Many compliance programs struggle precisely because they skip this step. Policies proliferate. Controls multiply. Training expands. Yet foundational questions remain vague. What does ethical behavior actually mean in this organization? What risks are intolerable regardless of business pressure? What decisions require escalation without exception?

The ECCP begins with 3 fundamental questions:

  1. Is the corporation’s compliance program well designed?
  2. Is the program being applied earnestly and in good faith? In other words, is the program adequately resourced and empowered to function effectively?
  3. Does the corporation’s compliance program work in practice?

Throughout the ECCP, the DOJ repeatedly asks whether a compliance program is well designed. That evaluation begins with clarity of purpose and scope. A Euclidean compliance program explicitly defines its terms, principles, and boundaries. Without that clarity, enforcement becomes inconsistent, and explanations to regulators become fragile. In daily operations, this means compliance professionals must insist on precision. Ambiguity is not flexibility. It is a risk.

Logical Structure Is a Compliance Control

Euclid’s brilliance lies in sequencing. Each proposition follows logically from what came before. Nothing is random. Nothing is decorative. The system works because it is internally consistent. Compliance programs often fail this test. Risk assessments do not inform training. Training does not influence monitoring. Investigations do not drive remediation. Each function operates competently, but not coherently.

The ECCP explicitly evaluates whether compliance programs operate as integrated systems rather than as disconnected components, stating, “Ensure the compliance program is well-integrated into the company’s operations and workforce.” Prosecutors want to see feedback loops, escalation pathways, and continuous improvement mechanisms. That is Euclidean thinking applied to compliance. In practice, compliance leaders should be able to explain how a risk moves through the system from identification to mitigation. If that explanation requires hand-waving, the system is not structurally sound.

Proof, Not Assertion, Is the Regulatory Standard

Euclid never asks the reader to trust him. He proves every claim. That lesson may be his most important contribution to modern compliance. Companies often assert that their programs are effective because training is delivered, policies are updated, or hotlines exist. Hui Chen led the charge on this concept when she was the DOJ Compliance Counsel. The ECCP has reiterated Chen’s requirement for evidence, as prosecutors now routinely request proof of effectiveness. How quickly are issues identified? How consistently is discipline applied? How does remediation prevent recurrence?

A Euclidean compliance program is designed to generate proof. Controls are documented. Decisions are recorded. Metrics are reviewed and refined. Effectiveness is demonstrated through data and outcomes, not narrative assurances. This is not about bureaucracy. It is about credibility. When regulators ask how you know your program works, Euclid provides the answer: because the proof is built into the structure.

Precision Enables Fairness and Trust

Euclid’s definitions leave little room for interpretation. In compliance, precision serves a similar function. Clear definitions reduce bias, inconsistency, and resentment. Vague policies create uneven enforcement. Uneven enforcement destroys trust. Employees quickly learn whether rules are real or elastic. The ECCP’s emphasis on consistent discipline reflects this reality. The ECCP states, “Have disciplinary actions and incentives been fairly and consistently applied across the organization?”

Daily compliance operations should therefore prioritize clarity. What constitutes a conflict of interest? What thresholds trigger approval? What timelines govern investigations? Who owns decisions at each stage? Precision protects both the organization and the compliance function. It allows fairness to be demonstrated, not merely claimed.

Systems Must Be Built to Endure

Euclid’s work has endured for more than two millennia because it was built as a system, not a response to a crisis. Compliance programs should aspire to similar durability. Programs that rely on personalities, informal influence, or unwritten norms collapse when leadership changes. The ECCP evaluates whether compliance programs are institutionalized, supported by governance structures, and able to withstand turnover. A Euclidean compliance program embeds ethics into processes, charters, reporting lines, and documentation. Knowledge is transferred. Decisions are repeatable. Improvements are systematic. This durability is not accidental. It is designed.

Why Euclid Completes the Series

Socrates teaches compliance professionals to ask uncomfortable questions. Plato teaches them to design ethical governance structures. Aristotle shows how ethics are lived through habit and judgment. Pythagoras introduces measurement, analytics, and AI. Euclid brings all of it together. He shows how inquiry, governance, behavior, and data become a coherent system that can be explained, defended, and proven. In modern compliance, that is the difference between aspiration and effectiveness.

5 Key Takeaways for the Compliance Professional

1. Compliance programs must be grounded in clear first principles.

Euclid reminds us that systems fail when foundations are vague. Compliance programs should clearly define ethical expectations, risk boundaries, and escalation triggers. The ECCP evaluates whether programs are thoughtfully designed, not merely comprehensive. Clear first principles guide daily decisions, reduce ambiguity, and support consistent enforcement. Without them, controls become reactive, and credibility erodes under scrutiny.

2. Logical integration is a core element of effectiveness.

Disconnected compliance components create blind spots. Euclid teaches that a system works when each part follows logically from the previous one. Risk assessments should drive policies. Policies should inform training. Training should influence monitoring. Investigations should lead to remediation. The ECCP rewards programs that demonstrate this internal logic. Integration is not administrative elegance. It is risk management.

3. Proof of effectiveness must be built into the program.

Assertions no longer satisfy regulators. Euclid’s insistence on proof mirrors the ECCP’s demand for evidence. Compliance programs should be designed to generate data demonstrating timely detection, consistent discipline, and meaningful remediation. When proof is embedded in the system, credibility follows naturally.

4. Precision enables fairness and protects trust.

Clear definitions and thresholds reduce inconsistency and perceived bias. Euclid’s precision offers a model for compliance policies and procedures. The ECCP scrutinizes the fairness of disciplinary proceedings and investigations because trust depends on it. Precision protects employees, managers, and the compliance function alike.

5. Durable compliance programs are designed, not improvised.

Euclid’s work endures because it was built as a coherent system. Compliance programs should aim for the same longevity. Institutionalized governance, documented processes, and structured improvement allow programs to survive leadership changes and regulatory shifts. Durability is a marker of maturity and a signal of seriousness to regulators.

Euclid teaches compliance professionals the final lesson in this series: effectiveness is not claimed. It is demonstrated.

Conclusion

The enduring relevance of the ancient Greek philosophers to modern compliance and ethics lies in their not theorizing in the abstract. They were grappling with the same human pressures that drive misconduct today: power, incentives, rationalization, fear, and convenience. Socrates teaches compliance professionals the discipline of ethical inquiry and the courage to ask uncomfortable questions. Plato shows that values without governance structures are fragile, while Aristotle grounds ethics in habit, judgment, and daily behavior rather than aspiration. Together, they mirror the DOJ’s insistence that effective compliance programs begin with understanding risk, designing systems to manage it, and ensuring those systems operate in practice.

What makes these philosophers especially relevant today is how naturally their ideas align with modern regulatory expectations. Pythagoras anticipates the role of data, analytics, and AI in measuring compliance effectiveness, while Euclid provides the blueprint for structure, precision, and proof that regulators now demand. In an era of complex global operations and heightened enforcement scrutiny, compliance programs succeed or fail based on inquiry, governance, behavior, measurement, and demonstrable effectiveness. The ancient Greeks understood those dynamics long before corporate compliance existed, which is why their lessons remain not only relevant but essential for modern compliance and ethics professionals.

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AI Today in 5

AI Today in 5: January 16, 2026, The More Chatbots in Recruiting Edition

Welcome to AI Today in 5, the newest addition to the Compliance Podcast Network. Each day, Tom Fox will bring you 5 stories about AI to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the AI Today In 5. All, from the Compliance Podcast Network. Each day, we consider five stories from the business world, compliance, ethics, risk management, leadership, or general interest about AI.

Top AI stories include:

  1. Shadow AI is a compliance problem. (PYMNTS)
  2. Sovereign Core SW to scale AI. (Intellectia)
  3. Scaling AI-driven compliance. (FinTechGlobal)
  4. AI has arrived in Gmail. What you need to know. (NYT)
  5. McKinsey is moving to chatbots for recruiting. (Bloomberg)

For more information on the use of AI in Compliance programs, my new book, Upping Your Game, is available. You can purchase a copy of the book on Amazon.com.

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2 Gurus Talk Compliance

2 Gurus Talk Compliance – The Corruption is Free Speech Edition

What happens when two top compliance commentators get together? They talk compliance, of course. Join Tom Fox and Kristy Grant-Hart in 2 Gurus Talk Compliance as they discuss the latest compliance issues in this week’s episode!

Stories This Week Include:

  • FirstEnergy defendants in Ohio say corruption is simply ‘free speech’. (Ohio Capitol Journal)
  • British national sentenced to 6 years in jail over Wirecard fraud. (FT)
  • Corruption led to the Hong Kong fire disaster. (Bloomberg)
  • Translations as a compliance issue. (BBN Times)
  • Will Trump suspend the FCPA in Venezuela? (FCPA Compliance and Ethics Report)
  • X Faces U.K. Probe Over Grok’s Sexualized Images (WSJ)
  • Six Compliance Events to Watch in 2026 (Radical Compliance)
  • Why Are Your Policies Yelling at Me? It’s Time to Rethink Tone in Rules (CCI)
  • 10 must-know workforce trends for 2026 (Dayforce)
  • Florida man arrested after trying to flee deputies on riding lawn mower (NBC News)

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Compliance and AI

Compliance and AI – Transforming Cloud Investments: The Role of AI Governance

What is the intersection of AI and compliance? What about Machine Learning? Are you using ChatGPT? These questions are just three of the many we will explore in this cutting-edge podcast series, Compliance and AI, hosted by Tom Fox, the award-winning Voice of Compliance. Today, Tom looks at AI and governance with 3 guests, Bill Sanders, Olivia Storelli, and Andrew Stevens.

Bill Sanders, Olivia Storelli, and Andrew Stevens are leading voices in the discourse on AI governance and guardrails, each bringing a unique perspective. Bill, a leader in brand management and consulting, views AI governance as essential for leveraging AI’s potential, emphasizing the need for decentralized decision-making and strategic oversight to ensure safety and strategic foresight. Olivia, CEO of Sakura Sky, underscores the importance of aligning strategy with practical technology execution, advocating for governance as a means to achieve rapid value while maintaining safety and innovation. Andrew, an expert in cloud technology, highlights the need for governance to manage AI’s risks and liabilities, calling for executive leadership to define permissible data use and decision-making to foster a robust, accountable AI implementation. Together, they stress the importance of clear guidelines, organizational readiness, and leadership involvement in navigating the complexities of AI adoption and ensuring its safe and effective integration into business operations.

Key highlights:

  • AI governance is crucial for safe and efficient deployment of artificial intelligence systems in organizations.
  • Collaboration and a mindset shift towards compliance professionals as enablers are essential for safe AI adoption.
  • AI compliance impacts trust, fairness, and security within organizations.
  • Leadership, accountability, and culture are key to success in AI projects.
  • A phased approach with executive sponsorship is crucial for implementing the AI roadmap.

Resources:

Download the AI Executive Whitepaper:

Text the word PLAYBOOK to 415.960.1161. 

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Visit https://whitepaper.download/

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31 Days to More Effective Compliance Programs

31 Days to a More Effective Compliance Program: Day 16 – Effective and Tailored Compliance Training

Welcome to 31 Days to a More Effective Compliance Program. Over this 31-day series in January 2026, Tom Fox will post a key component of a best-practice compliance program each day. By the end of January, you will have enough information to create, design, or enhance a compliance program. Each podcast will be short, at 6-8 minutes, with three key takeaways that you can implement at little or no cost to help update your compliance program. I hope you will join each day in January for this exploration of best practices in compliance. In today’s Day 16 episode, we delve into the evolution and importance of employee compliance training, focusing on fostering a culture of compliance within organizations.

Key highlights:

  • Evolution of Compliance Training Standards
  • Measuring Training Effectiveness
  • Tailoring Training to Audience Needs

Resources:

Listeners to this podcast can receive a 20% discount on The Compliance Handbook, 6th edition, by clicking here.

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Daily Compliance News

Daily Compliance News: January 16, 2026, The Another Basketball Point Shaving Scandal Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Corruption investigation into Italy’s privacy watchdog. (Reuters)
  • Former Ukraine PM charged with corruption. (EuroNews)
  • Another college point-shaving scandal. (ESPN)
  • Kaiser Permanente settles massive medicare fraud claims scandal. (NYT)