Tag: compliance

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31 Days to More Effective Compliance Programs

Day 1-What 2021 Brought to Compliance


Welcome to a special podcast series on the Compliance Podcast Network, 31 Days to a More Effective Compliance Program. Over these 31 days series in January 2021, I will post a key part a best practices compliance program each day. By the end of January, you will have enough information to create, design or enhancement 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 plan to join each day in January for this exploration of best practices in compliance.
2021 was a very significant year for every compliance practitioner and compliance program. While there was a paucity of corporate FCPA enforcement actions, the three enforcement actions were significant with multiple lessons for the compliance professional. In Deutsche Bank, we learned about the costs of a corrupt culture and recidivism, in Amec Foster Wheeler, we saw happens to a company which pays bribes and then tries back out; the criminals they are dealing with have them in an untenable position that they must continue to pay the bribes and how catastrophic failure in pre- and post-acquisition due diligence can lead to massive FCPA violations. Finally, in WPP, we saw how accepted business incentives can become perverse, what happens when you ignore whistleblowers. However, there were two major policy announcements from the Biden Administration which every compliance professional needs to not simply be aware of but study and implement solutions based upon these announcements.
In late October, Deputy Attorney General Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). The key changes announced in the Monaco Speech were as follows: (1) “today I am directing the department to restore prior guidance making clear that to be eligible for any cooperation credit, companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue. To be clear, a company must identify all individuals involved in the misconduct, regardless of their position, status or seniority.” This portends a return to the strictures of the Yates Memo. (2) “The second change I am announcing today deals with the issue of a company’s prior misconduct and how that affects our decisions about the appropriate corporate resolution. (3) The final change I am announcing today deals with the use of corporate monitors.” This final change is a rejection of the strictures laid out in the Benczkowski Memo regarding the DOJ use of corporate monitorships.
In November, the Biden Administration released the United States Strategy on Countering Corruption (the “Strategy”); subtitled “Pursuant To The National Security Study Memorandum On Establishing The Fight Against Corruption as a Core United States National Security Interest”; in response to President Biden’s prior declaration of corruption as a national security issue of the United States. While obviously focused on the US government’s role in leading the fight against corruption, the entire document portends a major sea change in the approach of fighting bribery and corruption, literally on a worldwide basis. For this reason alone, it should be studied by all compliance professionals. Obviously, this more holistic approach is most welcomed. Corruption does more than simply steal money from the world economy.
Three key takeaways:

  1. The Biden Administration released its Strategy on Countering Corruption.
  2. Deputy Attorney General Lisa Monaco gave a speech refocusing the DOJ’s efforts on FCPA and other white-collar crime.
  3. Even with a paucity of FCPA enforcement actions, there were multiple lessons for the compliance professional.
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Blog

On the Naughty List – Urban Meyer

We conclude our pre-Christmas Naughty List review and today we have one person who is on the Very Naughty List. That person is now former Jacksonville Jaguars head coach Urban Meyer. The missteps, inanity and downright irresponsible actions taken by Meyer during his abortive less than one season with the Jags is not only one for the annals in National Football League (NFL) history but provides multiple lessons learned for the compliance professional.
Meyer was a very successful college coach winning national titles at two schools, Florida and Ohio State. But he was clearly out of his depth in the NFL, which of course is professional football and not college football. But the red flags were all there for any who cared enough to look. Clearly, they were ignored by the Jags owner, now to his shame and humiliation. It began almost immediately after Meyer’s hiring when he tried to retain a strength and conditioning coach who had been fired at Iowa for allegations of racial abuse.
Michael DiRocco reported, “In February, Meyer hired former Iowa strength coach Chris Doyle, who was accused of making racist remarks and belittling and bullying players while with the Hawkeyes. Doyle resigned a day later after the Jaguars were criticized for the hire by the Fritz Pollard Alliance.” Before the resignation, Meyer had claimed he had done his due diligence on Doyle with Meyer adding, he “did not consider the implications of hiring him.” Later in the summer, the NFL “fined the Jaguars $200,000 and Meyer $100,000 for excessive contact during a June 1 organized team activity. The team also must forfeit two OTAs during the first week of the 2022 offseason, meaning they will have only eight.”
Please note the season had not even started yet.
The Jags got off to an ignominious start losing to the pathetic Houston Texas and began the season 0-4. It was at this point, missteps turned into inanity. After losing to the Cincinnati Bengals to reach 0-4, Meyer did not travel back to Jacksonville with the team but went to Columbus OH to unwind, relax with friends and to visit with his grandchildren. Almost immediately, “a video began circulating on social media on Oct. 1 that showed a woman who was not Meyer’s wife dancing close to his lap at his Columbus restaurant. Meyer apologized in positional group meetings early in the week, then at a news conference and again in a team meeting later in the week. Khan also issued a public rebuke.”
As the losing wore on, Meyer’s true personality came out. Andrew Gastelum, reported that in November Meyer “was involved in multiple disputes with players and coaches over the last two weeks, including a heated argument with receiver Marvin Jones and that Jones was reportedly so angry with Meyer’s criticism of Jaguars receivers that he left the team facility. According to Pelissero, staff convinced the receiver to return only for him to get into a heated argument with Meyer at practice.” Moreover, “Meyer reportedly challenged assistants to defend their résumés individually during a staff meeting where he told his coaching staff that he was a winner and that they were losers.” Of added significance to this reporting was, according to Tom Pelissero, that the sources for this story came from the NFL office, not simply Jag players. Predictably, in an incredibly inane move, as reported by Jordan Dajani, Meyer denied both events ever happened.
Yet even Meyer was capable of achieving another low, moving to complete irresponsibility.
Enraged and wrongfully believing that the source of this latest escapade came from inside the Jags, he announced anyone that blew the whistle on him would be unceremoniously shown the door, as in immediately. Then last week, Ryan Glasspiegel, reported that former Jags kicker Josh Lambo accused of Meyer of kicking him at practice in August. Lambo said, “It certainly wasn’t as hard as he could’ve done it, but it certainly wasn’t a love tap. “Truthfully, I’d register it as a five (out of 10). Which in the workplace, I don’t care if it’s football or not, the boss can’t strike an employee. And for a second, I couldn’t believe it actually happened. Pardon my vulgarity, I said, ‘Don’t you ever f–king kick me again!’ And his response was, ‘I’m the head ball coach, I’ll kick you whenever the f–k I want.’”
Unsurprisingly Meyer denied this also ever happened. Yet this is where complete irresponsibility turns to the surreal. While Meyer was denying the event ever took place, he had his lawyers threatening the reporter who broke the story. But here is the surrealness, as the lawyers did not dispute that Meyer kicked Lambo, only how hard. So, Meyer’s lawyers admit there was an assault, it just was not serious.
Finally, even the Jags owner had enough and when the assault allegations broke, he fired Meyer that night. The owner, Shad Khan claimed that he had intended to fire Meyer after the latest loss on Sunday, but it took him several days to get his ducks in a row. Of course, while the owner was doing so, Meyer was still coaching the Jags. Me thinks something is rotten with that story.
What are the lessons for the compliance professional in all of this?
Let’s start with due diligence. Meyer was penalized in Columbus for his less-than-ethical behavior around an assistant coach accused of assaulting his wife. He somehow managed to lose or deleted multiple text message on the topic. He was suspended for three games by Ohio State for his conduct. All of this was in the public record and there for all to see. Think executive due diligence is not important? Think again (and while you are thinking about it call Candace Tal.)
Internal Controls. Yes, there are internal controls in football. One such control deals with player safety based upon amount of physical contact which can occur during offseason training camp (OTA). Meyer and the Jags were fined for having players engage in contact drills. In typical Meyer fashion, he had the Jags deny the team had done anything wrong as it was the players who simply could not contain themselves.
Discipline. Pro football has a Neanderthal governance structure (with the noted exception of the Green Bay Packers, who exist in a parallel socialist world). There is no public company, no Board overseeing the company. There is an owner and every significant employee reports directly to the owner. Clearly the owner, who did not do due diligence on Meyer’s character, was not going to discipline him. Although he belatedly claimed he was going to do so after the most recent loss, that seems like “Monday Morning Quaterbacking” to me. Do you really think that if any other Jag employee engaged in any of this behavior they would not have been sacked? Discipline must be delivered uniformly and fairly. That is called Institutional Fairness and is the responsibility of the Chief Compliance Officer (CCO). It is also a requirement of a compliance program. As was noted in the original FCPA Resource Guide, compliance has to apply from the “Board room to the shop floor.” Even in the recent Securities and Exchange Commission (SEC) enforcement action involving JPMorgan, the SEC required “an evaluation of who violated policies and why, what penalties were imposed, and whether penalties were handed out consistently across business lines and seniority levels.”
Perhaps now you might understand why Urban Meyer is on the Very Naughty List. But you can use the lessons learned to help keep your organization off the Naughty List in 2022 and beyond.

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Compliance Kitchen

Year End Wrap Up


The Kitchen wraps up its 2021 with a look back at some of its top stories from the past year.

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Blog

Farewell to Dr. Shirley McBay and the US Strategy on Countering Corruption – Innovation Going Forward

We are exploring the recently released the United States Strategy on Countering Corruption (the “Strategy”); subtitled “Pursuant To The National Security Study Memorandum On Establishing The Fight Against Corruption as a Core United States National Security Interest”; in response to President Biden’s prior declaration of corruption as a national security issue of the United States.  Over this 5-part blog series I have delved into the Strategy and considered how it will impact the compliance professional. We have considered Pillar 1, modernizing, coordinating, and resourcing US government efforts to fight corruption. Next, we took up Pillar 2, curbing illicit financing. With Pillar 3, we looked at holding corrupt actors accountable. Under Pillar 4, we looked at preserving and strengthening multilateral anti-corruption architecture. Today, we conclude our series by looking at Pillar 5, Improving Diplomatic Engagement and Leveraging Foreign Assistance Resources to Advance Policy Goals.
First, however, we celebrate the mathematician Dr. Shirley McBay. Mathematics professors rarely have obituaries in the New York Times (NYT). Dr. McBay was the first African American to garner a PhD from the University of Georgia. After receiving her degree she taught at Spelman College, turning it into a powerhouse for mathematics, where even today, “more Black women with doctorates in science and engineering have undergraduate degrees from Spelman than any other institution.” From Spelman, McBay moved to “the National Science Foundation, where she developed and ran a program to help minority-focused institutions improve their course offerings and research capacities. Five years later, she moved to M.I.T.” At M.I.T., she “made her greatest mark on her field as the dean of student affairs at the Massachusetts Institute of Technology in the 1980s. She confronted the challenge of bringing more students from underrepresented minorities into science, technology, engineering and math, both at her university and in higher education broadly.”
The US will elevate diplomatic engagement through five steps. They include:

  • Diplomatic engagement. The US government “will elevate anti-corruption as a priority within its diplomatic and public diplomacy efforts”, focusing local conditions. Additionally, it will ramp up its support for “governmental and nongovernmental actors combatting corruption through bilateral and multilateral contexts.”
  • Expand assistance. The US government will expand its anti-corruption assistance and will monitor and evaluate its efficacy throughout the process.
  • Anti-corruption considerations. There will be an integration of anti-corruption considerations across a wide variety of areas such as “development assistance, including global health, anti-crime and rule of law, conflict and fragility, and humanitarian assistance.”
  • Rule of law. There will be “new and expanded foreign assistance programs to enhance the capacity and independence of oversight and accountability institutions, including legislatures, supreme audit institutions, comptrollers, and inspector generals.” The government will focus on tools, procedures and programs to “follow the money.”

In a most-welcomed initiative, the US will work to protect those who report on and blow the whistle on bribery and corruption. It will do so in a variety of ways and through several different initiatives. They include support for journalists by deploying new and existing “programming to respond to rapidly evolving threats to, and harassment of, reformers, journalists, and other
anti-corruption change agents” There will be increased education in the global ABC community about existing global emergency assistance programs, which can provide short-term financial assistance to whistleblowers or others “who have been threatened or attacked for their work, including those engaging in anticorruption or transparency efforts.” The US government will work to counter nuisance suits against journalists and activists and will work such programs and policies. When possible, the US will coordinate actions with partner countries taking similar steps.
Next the US will use innovation as a key to be combating corruption. This innovation can come through the use of technology to prevent, detect and remediate issues before they become corruption issues. It can also take the form of a rapid response team and tools to “emerging areas of increased risk for corruption. Allowing for more agile response capabilities among partners will provide increased critical assistance, particularly to new democratic and reform-minded regimes and global civil society partners, as they more effectively investigate, prosecute, and adjudicate corruption and kleptocracy; and better address the role corruption plays in facilitating transnational organized crime and malign influence from state actors.” In the arena of ‘new domains’ the US government will consider “how to further incorporate a transnational lens into its anti-corruption foreign assistance, including by expanding support for international networks of investigative journalists, civil society advocates, and criminal justice practitioners.”
Finally, near and dear to the heart of every compliance professional, the US will direct a wide swath of the US and others to create better tools for and use risk assessments. This will help not only to identify where corruption issues may arise but to help deploy, on a proactive basis, strategies to prevent, detect and remediate any such issues. Here the US “will review existing approaches to assessing and addressing corruption risk in development and humanitarian assistance, evaluating whether gaps exist in current frameworks; and whether those frameworks need to be more robustly implemented.” There will be pilot programs to effectuate change through a “proof of concept” to determine best practices “for future interagency collaboration in using foreign assistance to combat corruption, and to pursue innovation, experimentation, adaption, and reflection on existing approaches.”
This final Pillar demonstrates the government has learned by working with private sector players, many of the lessons of best practices in compliance. The use of innovation such as data and technology have been a mainstay on corporate compliance programs for several years. Even the discussion around risk assessments in this Pillar derives from the Department of Justice’s (DOJ) Evaluation of Corporate Compliance Program and its update. All of this means not only collaboration with the private sector but an opportunity for the private sector to garner lessons that the US and other governments learn in this truly international fight.
The Strategy on Countering Corruption is both welcomed and should be celebrated by every compliance professional. The Strategy does not simply elevate the work of compliance to the US and indeed international arena but the ongoing interplay and interaction between the public and private sector will lead to innovation, enhancement and truly international engagement in the worldwide fight against bribery and corruption.

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Everything Compliance - Shout Outs and Rants

Everything Compliance – Year End Shout Outs and Rants from Episode 91


In this special edition of Everything Compliance – Shout Outs and Rants, the gang looks at their favorite or most poignant Shout Out or Rant from 2021. They include:
1. Karen Woody shouts out to starting early Emmy buzz for Ted Lasso.
2. Jay Rosen shouts out to civility.
3. Matt Kelly shouts out to the NJ sandwich shop Hometown International, which with $35K in annual sales resulting in a $100MM market cap evaluation.
4. Jonathan Armstrong shouts out to who show true leadership in a crisis and the Spirit of Christmas.
5. Jonathan Marks expands on his rant about Hall of Fame horse trainer Bob Blaffert.
6. Tom Fox shouts out to John Lee Dumas, who as a college senior on 9/11, knew that night he was going to war, and to all the men and women who served in combat in America’s 20-year war in Iraq and Afghanistan.

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Everything Compliance - Shout Outs and Rants

Everything Compliance – Episode 90 Shout Outs and Rants


1. Karen Woody shouts out to the Indianapolis Motor Speedway for providing a great tourist experience.
2. Jay Rosen rants about Tampa Bay receiver Antonio Brown who misrepresented his vaccination status by presenting a fraudulent shot card to the Bucs.
3. Matt Kelly has a Shout Out to the Women’s Tennis Association for their pulling their tennis tournaments out of China in the wake of the Chinese government’s treatment of Peng Shuai after she raised issues of sexual harassment against a high-ranking Party member.
4. Jonathan Armstrong shouts out to the EU Public Prosecutors Office.
5. Tom Fox rants about MLB locking out the players, particularly the inanity of doing so during the offseason. He shouts out to Houston Chronicle sports columnist Brian Smith for editorializing that MLB should use this time to fix the game of baseball, instead of trying to simply save a few pennies.

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Everything Compliance - Shout Outs and Rants

Everything Compliance – Shout Outs and Rants From Episode 89

  1. Jonathan Armstrong shouts out and rants about the fraudster Dr Ruja Ignatova and her fraudulent crypto currency OneCoin.
  2. Jonathan Marks has yet another rants about the hospitality industry and asks if they could give customers rooms which are not currently assigned to other customers.
  3. Matt Kelly shouts out to People Magazine and Paul Ruud. The magazine named him the “World’s Sexiest Man.” Matt starts Oscar buzz for Ruud for his upcoming performance in Ant Man III.
  4. Jay Rosen shouts out to dads everywhere by honoring OBS, Odell Beckham, Sr. for getting his son out of Cleveland and to the LA Rams.
  5. Karen Woody shouts out to the TV show and pop culture phenomenon Succession.
  6. Tom Fox shouts out to the NFL Fashion Police for fining CeeDee Lamb over $15K for having his shirt tail out during a game while fining Aaron Rogers less than $15K for breaking Covid-19 protocols. I am glad their priorities are in the right place.
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Everything Compliance - Shout Outs and Rants

Everything Compliance – Shout Outs and Rants from Episode 88

1. Karen Woody has a shout out WeWork going public via a SPAC.

2. Jay Rosen has a melancholy rant about shooting victims on movie sets.

3. Matt Kelly has an extended rant about the ongoing debt crisis.

4. Jonathan Armstrong shouts out to the graduating class of 2021 and all they went through during Covid-19 to obtain their degrees.

5. Jonathan Marks rants about hotels charging full prices while cutting back on their services.

6. Tom Fox shouts out to Houston Astros who are in the World Series for the 3rd time in 5 years.

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Everything Compliance - Shout Outs and Rants

Everything Compliance – Shout Outs and Rants from Episode 87


Our fan favorite Shout Outs and Rants from the next episode of Everything Compliance is here. In addition to our new “award-winning status”, we are joined by our newest panelist Karen Woody.

  1. Matt Kelly shouts out to Kareem Abdul Jabbar for his evisceration of NBA players in general and Kyrie Irving in particular for their selfish attitudes in failing to get Covid vaccinations.
  2. Jay Rosen, CCEP shouts out to Josh Allen and the Buffalo Bills for being one of the best teams in the NFL this season and advises long-suffering Bills fan Lisa Fine to ‘enjoy the ride’.
  3. Jonathan Armstrong shouts out to Emma Raducanu for her stunning win in the US Open this year.
  4. Karen Woody shout outs domestic tourism in Brown County Indiana.
  5. Thomas Fox rants about Waller County and its lack of criminal charges against drivers who intentionally or negligently run over cyclists.
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Everything Compliance - Shout Outs and Rants

Everything Compliance- Shout Outs and Rants from Episode 84

 

Check out the Shout Outs and Rants from Episode 84 of Everything Compliance. Guest Panelist Mary Shirley joins in the fun. 1. Jay Rosen shouts out to those attorneys at DOJ and State AGs’ offices who stood up when Trump tried to steal the election. 2. Mary Shirley rants about the lessening of the CCO role. 3. Jonathan Marks rants about MLB having a Field of Dreams baseball game and then blacking it out to almost ½ of the country. 4. Jonathan Armstrong has a melancholy shout out, as he honors 1st responders to the Plymouth shooting in the UK. 5. Tom Fox shouts out Texas Governor Gregg Abbott and his inaction on the Texas Power Grid crisis, which increased his campaign contributions from the energy industry.