Tag: Due Diligence

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31 Days to More Effective Compliance Programs

One Month to More Effective Compliance for business – Pre-acquisition Due Diligence in Mergers and Acquisitions

A company that does not perform adequate due diligence before a merger or acquisition may face legal and business risks. Perhaps most commonly, inadequate due diligence can allow a course of bribery to continue – with all the attendant harms to a business’s profitability and reputation and potential civil and criminal liability. While most compliance practitioners have been long aware of the requirement in the post-acquisition context, the FCPA Resource Guide, 2nd edition, focused many compliance practitioners on the need to engage in robust pre-acquisition due diligence.

The 2020 Update made the need for a robust compliance presence in the pre-acquisition phase even more apparent. It stated, “A well-designed compliance program should include comprehensive due diligence of any acquisition targets, as well as a process for timely and orderly integration of the acquired entity into existing compliance program structures and internal controls. Pre-M&A due diligence, where possible, enables the acquiring company to evaluate each target’s value and negotiate for the costs of any corruption or misconduct to be borne by the target. Flawed or incomplete pre- or post-acquisition due diligence and integration can allow misconduct to continue at the target company, causing harm to a business’s profitability and reputation and risking civil and criminal liability.”

Multiple red flags could be raised in this process, which might warrant further investigation. They include if the target has ineffective compliance program elements in their compliance program or if there were frequent breaches of policies and procedures. A target that is in financial difficulty would bear closer scrutiny. Structurally, this could present issues if the company did not have a formal ethics and compliance committee at the senior management or Board of Directors’ level. From the CCO perspective, if the position did not have Board or CEO access or had no regular reports, it could present an issue for compliance. Conversely, if there were frequent requests to waive policies, management override of compliance controls, or no consistent consequence management for violations, it could present clear red flags for further investigation.

Three key takeaways: 

  1. Your pre-acquisition due diligence results will inform your post-acquisition integration and remediation going forward.
  2. Periodically review your M&A due diligence protocol.
  3. If red flags appear in pre-acquisition due diligence, they should be cleared.
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31 Days to More Effective Compliance Programs

One Month to More Effective Compliance for Business Ventures – JV Due Diligence

When you bring two entities together to operate jointly, there are several difficult issues to analyze. For the U.S. company operating under the FCPA, there must be an adequate business justification for a JV with a specific partner, all in writing and approved by an appropriate level of the organization. This is where the due diligence process comes into play. The due diligence process should be built on principles similar to those involving third parties. The procedure should be robust, documented, and address all potential risks. A company should use its due diligence review of the JV partner to properly assess and uncover corruption risks. Using this due diligence and its evaluation, you can move to contractual clauses, certifications, representations, and warranties from a JV partner or insist on other remedial measures to minimize risk exposure.

A U.S. business looking to engage a JV partner must consider the people who make up its JV partner. As you will have to mesh what may be two very different cultures and understandings of compliance, it is important to assess how your potential JV partner will take these obligations before rather than after you ink the JV agreement.

Three key takeaways:

  1. JV’s due diligence must focus on the unique risks.
  2. Ask for a detailed list of information from your potential JV partner.
  3. Be sure to do the onsite investigation of your potential JV partner.
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FCPA Compliance Report

FTX and Risk: Part 2 – Risk Management and Due Diligence

Welcome to the award-winning FCPA Compliance Report, the most senior podcast in compliance. In this episode, I conclude a 2-part series on FTX and risk. I am joined by Gilbert Paiz and Andrew Gay, principals in the Texas Hill Country Advisors. In our previous Part 1, we considered risk and risk management through the lens of US-domiciled financial institutions and how their risk management protocols help assess risk and manage it throughout the life cycle of a banking-customer relationship. In this Part 2, we consider individual risk in investing and what type of background information, questions, and due diligence individuals should engage in and how these questions and background investigations apply equally to larger investments made by sophisticated investors, hedge funds, and institutional investors; who should have made them before investing in FTX but they all failed to do so.

Some of the highlights include:

·      What due diligence should an individual perform?

·      What should an individual look for in a financial statement?

·      Why is the physical location of businesses and where it might be incorporated such an important piece of information?

·      What are backstops, guarantees, or other mechanisms to retrieve investments?

·      What Due Diligence mistakes did you see in FTX?

·      What are related party transactions, and why are they problematic?

·      Why are audited financials critical?

 Resources

Texas Hill Country Advisors

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Daily Compliance News

December 2, 2022 the Huge Management Failure Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you four compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Stories we are following in today’s edition of Daily Compliance News:

  • More FCPA cases are on the horizon. (WSJ)
  • SBF says it was a ‘huge management failure.’ (NYT)
  • Does anyone perform due diligence anymore? (FT)
  • SA President urged to step down due to corruption allegations. (Aljazeera)
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Blog

Lafarge Part 3: Final Thoughts

We conclude our exploration of one of the most public cases of corporate moral bankruptcy where Lafarge SA and its Syria unit Lafarge Cement Syria, or LCS, each pled guilty to a count of conspiring to provide material support to foreign terrorist organizations and will pay a total of $777.78 million.  According to the Plea Agreement, this amount consisted of a total criminal fine of approximately $91 million and forfeiture of $687 million. As previously noted, this is not a Foreign Corrupt Practices Act (FCPA) enforcement action, but an enforcement action based on USC §2339B for one count of conspiracy to provide material support to one or more foreign terrorist organizations. While this is not a FCPA enforcement action, the mechanisms by which Lafarge paid bribes or otherwise funded the terrorist organizations ISIS and ANF are instructive for the anti-corruption compliance professional. These strategies were laid out in the Statement of Facts and considered in Part 2 of this series.

The Costs of Corruption

One clear message from this matter is the cost of moral bankruptcy and corruption. As noted in the Statement of Facts, “From August 2013 through October 2014, Lafarge and LCS paid ISIS and ANF, through intermediaries, the equivalent of approximately $5.92 million.” For that amount of corruption, through the funding of terrorist and terrorism, Lafarge will pay a total fine of $777.78 million. About the only FCPA matter which comes close to this disparity in the amount of the bribe and penalty was the Avon FCPA enforcement action where bribes totaling $8 million led to led to a reported total penalty of $135 million. By the time of the resolution, Avon also had reported over $300 million in investigative costs.

At the times of the incidents in questions, 2012 to 2014, Lafarge had annual sales in the range of $2 billion plus and annual revenues in the range of $400 to $435 million. Very clearly the bribes paid by Lafarge were not material in the financial accounting sense. That may have been why no one seemed to be looking at the company. However, it drives home the point that a relatively small amount of corporate outgo can generate huge costs in the form of a $777.78 million fine. We have not begun to discuss the pre-resolution costs but in FCPA cases they are in the range of two to six times the final fine. Even if the pre-resolution costs were 1X the fine, that would still drive the all-in cost over $1.5 billion.

Monitoring Non-Standard Communications

One of the areas that bears consideration by the compliance professional is that of internal communications, as, “Many of the Lafarge and LCS executives involved in the scheme used personal email addresses, rather than their corporate email addresses, to carry out of the conspiracy.” In September, the Securities and Exchange Commission (SEC) announced “charges against 15 broker-dealers and one affiliated investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications. The firms admitted the facts set forth in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined penalties of more than $1.1 billion, and have begun implementing improvements to their compliance policies and procedures to settle these matters.”

In a recent speech (Miller speech), Principal Associate Deputy Attorney General Marshall Miller said, after the announcement of the Monaco Doctrine, in a section entitled “Meeting the Compliance Challenges of Communications Technology”, “Now let me turn to an area that we recognize is a big challenge for all organizations — employees’ use of personal devices and third-party messaging platforms for work-related communications… particularly as to detecting their use for misconduct. However a company chooses to address their use for business communications, the end result must be the same: companies need to prevent circumvention of compliance protocols through off-system activity, preserve all key data and communications and have the capability to promptly produce that information for government investigations.”

Now consider that whopping fine and enforcement action in the context of the fraud of Lafarge executives. The Miller speech focused on both messaging apps and other forms of corporate communications. In the Lafarge matter, the communications were very basic, on company computers using non-company emails through channels like AOL or Gmail. The Lafarge executives were using these outside of standard communication channels to facilitate their crimes with ISIS and ANF. This part of the enforcement action has not received much scrutiny but is something every compliance professional needs to consider – are your employees (or execs) using non-company emails or other forms of communication tools outside of standard company communication methods? The compliance function needs to work with their corporate IT folks to make sure no executives or employees are using such channels for communications and to monitor them if they are.

Failures in M&A Due Diligence

The final area for consideration is that of Mergers and Acquisitions (M&A). The Statement of Facts noted, “LAFARGE and certain of its executives, in fact, failed to disclose LCS’s dealings with ISIS and ANF to Holcim throughout discussions of the transaction and after completion of the deal. LCS had ceased producing cement in Syria by the time the transaction with Holcim was completed, and in the approximately seven months between the completion of the acquisition and the emergence of public allegations regarding the misconduct in Syria, Holcim did not conduct post-acquisition due diligence about LCS’s operations in Syria.”

Not only did the Lafarge executives not disclose this corruption to Holcim, but they also actively discussed continuing the corruption payment so as not to derail the transaction. Moreover, Holcim apparently did not conduct due diligence into LCS or any of these matters. Perhaps the non-material nature of the payments was a factor. Whatever the excuse for this pre-acquisition due diligence failure, it cost Holcim dearly. Even if Holcim was not assessed the fine, they were the entity which bore the administrative and emotional costs of the investigation leading up to the resolution. Dan Chapman once told me that in an all-encompassing investigation, it could take up to 25% of senior executives time. Given the number of investigations across the globe on this matter, that figure might be lower. All of these factors bear witness to the extraordinary costs for the failure of an acquiring company to perform compliance due diligence prior to closing.

We are now at the end of this short blog series. The Lafarge case is perhaps the first corporate matter since the oil-for-food cases where complete corporate moral bankruptcy has played such a factor. We can only hope that it will be that long until we see the next such example.

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Innovation in Compliance

Supply Chain and ESG – What You Need to Know: Episode 5 – Responsible Minerals, Supply Chain and ESG with Jared Connors and Daniel Zamora

 

Jared Connors and Daniel Zamora join Tom Fox in the final episode of the Supply Chain and ESG – What You Need to Know series, to discuss how market expectations have evolved with regards to due diligence in the responsible sourcing field.

 

 

Due diligence used to be a data collection exercise where you get transparency into your supply chain, but now it’s all about what you do with that information after you collect data – how a company can move from being reactive to being proactive. The first step to making this move is collecting data more efficiently; this allows you to have the resources in place to perform risk management within your supply chain. You need to know who’s on your supply chain, and you need to have a specific program in place to identify the risks of smelters.

 

Under the Biden administration, there has been a major focus on critical minerals when it comes to sanctions and regulations. Critical minerals are not specifically tied to the Dodd-Frank Act, but this focus has emphasized to stakeholders in the industry to be vigilant about them in general. Having an entity in your supply chain that is tied to a sanction puts you at risk no matter how direct or indirect that linkage is.

 

Resources

Assent

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Blog

Supply Chain and ESG – What You Need to Know: Responsible Minerals, Supply Chain and ESG

I recently had the opportunity to visit with several folks from Assent Inc. for a sponsored podcast series entitled Supply Chain and ESG – What You Need to Know. We discussed: ESG drivers with Jared Connors and James Calder; UFLPA, Supply Chain and ESG with Travis Miller and Jamie Wallisch; the New World of Product Compliance and ESG, with Cally Edgren and Devin O’Herron; Emissions Reporting Strategies with Devin O’Herron and Jared Connors; and Responsible Minerals, Supply Chain and ESG, with Jared Connors and Daniel Zamora. Today, in our final post, we consider responsible minerals, supply chains and ESG.

We began with a review of the evolution on responsible mineral sourcing. It started with conflict minerals, which has been around for 10 years or so. This led to a rather dramatic shift in the worldwide corporate mindset and companies and stakeholders determined that there needed to be more engagement all levels within the supply change. Zamora pointed to the example of due diligence. “It began as a data collection exercise where you get transparency into your supply chain, but now it’s all about, what can you do  with that information after you collect data? What you see from the expectations of stakeholders is performing risk management, right to diligence activities within your supply chain.” This means going beyond regulatory requirements, it means risk management activities related to identifying sanctions within your supply chain.

One of the key themes of this series has been how a comprehensive ESG program can bring a much more integrated, holistic approach to not simply regulatory compliance but also in overall business operations. That also presents the opportunity to use an ESG approach to move from simply a reactive to proactive program. With Zamora, we look at steps a company can take to facilitate this change.

Zamora said, the “first step is you need to collect data efficiently. Once you do that officially, it allows your organization to have the resources in place to focus at how to perform risk management from within your supply chain. Number two, you need to have a specific program in place that would allow you to see and identify the risks so you can see where minerals are coming from and where the minerals are going afterwards. This allows you to identify those risks ahead of time, having risk assess verifiable sources out there that will allow determine who the bad actors are before then engage in bad behaviors.”

All of this allows a company to make better business decisions in terms of risk management. Zamora said, “it gives them time. It gives them a lot of power to take corrective actions, according to those risks. It could be communicating that those risks within their own supply chain. It could be passing that information along to their legal team. Once you have that ability to see these risks live as if an organization is being proactive about it instead of being reactive and waiting for those risks to show up in your supply change; a company will have a lot of power to have corrective action in order to mitigate those risks.”

We concluded with a discussion of the stakeholders who might be concerned with responsible minerals and how a corporation can use an overall ESG program to engage with them. This can include the shareholders, it could include customers, it could include employees, it could include third parties your organization does business with, and it could include the locales where a company does business or operates. Zamora said, “conversations have definitely changed,”. Now it has expanded to “even metal associations.” These conversations are also at “multiple levels within the supply chain. It is no longer the downstream companies and the shareholders right now, you see expectations at the mid-tier suppliers, you see these conversations at the smelters and at the upstream level.” All these levels are getting engaged in discussions and conversations around the ESG requirements.

To listen to the podcast this blog post is based upon, click here.

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Blog

Death of dos Santos and Leadership at the Top

José Eduardo dos Santos, who served nearly four decades as Angola’s president, died on Friday in Spain where he had been living in self-imposed exile. According to his New York Times (NYT) obituary, “he was widely accused of corruption and nepotism, and the economic boom he presided over benefited mainly his family and a coterie of advisers.” If the name sounds familiar it may be due to his flamboyant daughter Isabel dos Santos who has been “accused of plundering institutions including Sonangol, the state petroleum company, to create a business empire with stakes in diamond exports, the dominant cellphone company, banks and the country’s biggest cement maker. In 2020, she was charged with embezzlement, money laundering and other financial crimes. She denied the charges, saying she was the victim of a witch hunt. She has been living mostly in Dubai, seeking to avoid arrest. Mr. dos Santos’s son José was found guilty of financial transgressions and sentenced to five years in prison.” In other words, it all started at the top.
The death of Santos is a good reminder of why substantive and deep dive due diligence needs to go into the background check on every business leader and C-Suite Executive. Candice Tal, founder and President of Infortal Worldwide, has long been telling us for this need for many years. Now a new article from the Harvard Business Review (HBR) by Aiyesha Dey, entitled “When Hiring CEOs, Focus on Character”, bears Tal’s warnings out with research. The author has “studied the ways in which the lifestyle behaviors of CEOs—in particular, materialism and a propensity for rule breaking—may spell trouble for a company.”  Her conclusion bears out why Tal has been saying all along, “Firms led by CEOs with even minor traffic tickets or excessive spending habits are disproportionately prone to fraud, insider trading, and other risky business activities.” Dey concludes by noting “that boards should pay attention to executives’ off-the-job behavior.”
Dey’s research centers on straight-forward questions: “Instead of focusing on systems and controls, should we be looking more closely at the people leading these companies?” Her conclusion is that taking a deeper dive into the background of those who become the C-Suite leaders at an organization bears more scrutiny as they can be “early warning signs” of trouble to come. That sounds like exactly what Boards would want to consider when reviewing potential C-Suite candidates. (I hope they will call Candice Tal to perform the actual due diligence recommended by Dey.)
The first area explored by Dey was in rule breaking, as “criminology researchers have found that people who flout even minor rules are subtly communicating that they don’t believe restrictions apply to them.” Indeed, Dey found that “18% of CEOs had been cited for infractions ranging from minor traffic offenses to driving under the influence, disturbing the peace, drug crimes, reckless behavior, domestic violence, and sexual assault.” Dey took this information a step further by asking, “Is fraudulent reporting more likely at a company if its CEO has a criminal record? Is the CEO (or CFO) more likely to be personally implicated in the fraud if he or she has a criminal record? Not surprisingly, the answer to both questions was yes… we found that if the CEO had a criminal infraction, the firm was more than twice as likely to be involved in fraud, and the CEO was seven times more likely to be personally named as a perpetrator.” Somewhat amazingly, even minor legal infractions such as traffic tickets were significant.
Dey then considered the effect of controls, such as insider trading blackout periods as a deterrence. Dey found “they had little effect on executives who committed serious crimes. Seemingly, then, governance structures and formal control systems are unlikely to rein in the worst actors. That’s discouraging news for boards and regulators that wish to curb opportunistic insider trading and limit other undesirable behavior.”
An area of Dey’s research, which was surprisingly insightful, was around “materialism.” Dey looked at it from the perspective of “the zealous pursuit of wealth and luxury regardless of the cost to others.” She and her teamed picked three criteria for review. (1) Ownership of a private home valued at twice as much as the median in the area; (2) Ownership of a car worth more than $75,000; and (3) Ownership of a boat more than 25 feet in length. “In our sample of CEOs, 58% had one or more of those markers and qualified as materialistic; we classified the remaining 42% as frugal.”
What Dey found “was a gradual weakening of the control environment in firms led by executives whose personal spending was excessive. Specifically, we observed more use of equity-based incentives (which can encourage managers to mislead capital markets by inflating reported performance), more appointments of materialistic CFOs, less intensive monitoring by the board, and a greater probability of a weakness in internal controls.”
In the financial sector, Dey “found that those with materialistic CEOs had relatively lax systems for risk management and thus faced more threat of significant negative performance than banks led by frugal CEOs.” Even more troubling for the compliance function, Dey “found that materialistic CEOs also contributed to a deterioration in corporate culture that led employees to more aggressively exploit insider-trading opportunities during the 2007–2009 financial crisis. Another correlation was in “corporate social responsibility (CSR) performance,” where Dey “found that firms with materialistic leaders received lower scores from CSR ratings agencies than did firms with frugal leaders. Our finding aligns with other scholarship showing that materialistic people display a lack of concern for the well-being of others and the environment.”
I asked Candice Tal what companies can do to investigate these issues. Tal stated, “Behavioral issues can be picked up during in-depth reference interviews by trained investigators, and can also be detected through patterns observed with type and frequency of civil lawsuits, such as sexual harassment, class action lawsuits, fraud and breach of contract matters. Themes around egregious behavioral issues can also be found when conducting deep web investigations on executives. This goes far beyond Google searches incorporating OSINT Open Source Intelligence. Tal notes that patterns and themes in behavioral traits should never be ignored. Executive due diligence backgrounds should be conducted by corporations on new executive hires and new board members.  Executives will be in the highest positions of trust, a simple background check will not reveal these types of issues, however, effective due diligence investigations enable this information to be discovered thus protecting the board and shareholders from unnecessary risk exposure.”
All this information should be digested by corporate compliance functions and Boards of Directors. Even in the Foreign Corrupt Practices Act (FCPA) world, nearly every major corporate scandal starts with a lax attitude at the top of the organization. Indeed, it is such CEOs who inevitably cry about ‘rogue employees” and not what their organizations stand for. But the myth of the rogue employees is just that, a myth, and it really all does start at the top. Boards need to take note.

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Blog

End of Roe – Lessons and Concerns for Compliance

Last week, after having leaked a preliminary opinion, the US Supreme Court struck the 50-year law legalizing abortion, Roe v. Wade in the case of Dobbs v. Jackson Women’s Health. The opinion was a complete mis-statement of US Constitutional law, was intellectually dishonest and was as clear an example of result-oriented legal decision making as you will ever likely see. However, the opinion was widely expected particularly after the leaked draft, but the reality is that all the justices who signed onto the opinion had long ago signaled their collective desire to overturn precedent and throw out Roe. While most Supreme Court decisions usually do not have direct compliance lessons and even broader criminal implications for the compliance profession, this opinion certainly does so I wanted to look at those issues from the compliance perspective.
Due Diligence
If there was ever an example of why you need robust due diligence for senior executives, the overturning of Roe provides the supreme example. All the justices who signed on to overturning Roe had said in their Congressional hearing that they would not vote to overturn Roe, and they would respect the Doctrine ofStare Decisis. As reported by Jacob Shamsian, writing in BusinessInsider.com, said, “When US Senators questioned Samuel Alito at his confirmation hearing in 2006, the now-Supreme Court Justice, author of Friday’s decision to overturn Roe v. Wade, hinted that the landmark 1973 abortion ruling was an “important precedent.” Alito went on to state, “It is a precedent that has now been on the books for several decades. It has been challenged. It has been reaffirmed.” At the same hearing, he talked about the principle of “stare decisis,” where Supreme Court justices respect the precedents set by previous decisions in making their rulings.”
Even Susan Collins, that alleged protector of women’s rights, said she had been “mislead” by now Justice Kavanaugh in a private meeting where the New York Times (NYT) reported that  Kavanaugh told her “Roe is 45 years old, it has been reaffirmed many times, lots of people care about it a great deal, and I’ve tried to demonstrate I understand real-world consequences,” he continued, according to the notes, adding: “I am a don’t-rock-the-boat kind of judge. I believe in stability and in the Team of Nine.” In the same article, Senator Joe Manchin said that his trust had been abused by Kavanagh for private comments made to him.
All this means that people will lie to you during their employment interview. Unfortunately for the people of the United States, the employment interview was for a lifetime tenured position. Are lying to Congress, mis-leading and abusing the trust of Senators impeachable offenses? An open question at this point.
The point of due diligence is to take the information provided to you and investigate further to both verify it and see if there is anything further which might be a red flag. Companies can get into big trouble for failures of due diligence. Witness the Moderna ‘CFO for a Day’ when, as Bloomberg reported, “Moderna Inc.’s chief financial officer [Jorge Gomez] stepped down just one day after starting his new job.” It turned out that his prior employer was investigating accounting fraud which occurred under his watch. It cost Moderna one year’s salary of over $700,000 and a huge black eye in the court of public opinion for this most basic due diligence failure. What do you think Gomez said when asked if there was anything they needed to know about his employment history?
What about the Cleveland Browns and their signing of Deshaun Watson? How much due diligence did Cleveland do before it signed Watson to a fully guaranteed $231 million contract. After signing the contract, the NYT broke the story that Watson had used “at least 66 different women in just the 17 months from fall 2019 through spring 2021” rather than the 40 in five seasons he had previously claimed. Conor Orr, writing in Sports Illustrated, reported that the Browns had engaged in due diligence the team described as an “odyssey” to become “comfortable” with Watson.  He went on to add, “If nothing in the Times report was new information to the Browns, they should come out and admit as much. If much of what surfaced in the Times report is new information to the Browns, they should come out and admit as much.” What do you think Watson told the Browns when they asked ‘Is there anything else we need to know about?”
Criminal Exposure
I do not often have to write about the potential criminal exposure of Chief Compliance Officers (CCOs) but after the eviscerating of Roe, it must be considered. How so, you might ask? The NYT Dealbook has reported, “Local officials in states that restrict abortion are already threatening to punish businesses that help employees gain access to it elsewhere.” If you take the prior Texas example this means every person or entity in the chain who might have provided assistance to a woman who has an abortion in a state where it is legal to do so. Under Texas law that means everyone who played a part in the corporate decision to support such women, including (but certainly not limited to) compliance, legal, human resources, finance, IT and a myriad of other corporate functions.
It would also extend to insurers who provide such coverage, once again even if legal in a state where services were delivered. Think such ideas are beyond the pale? Texas legislators are already considering such legislation, including making it illegal for Texas residents to travel anywhere to receive abortion services. Finally, do not forget that in 2022 one Texas woman, Lizelle Herrera, was charged with felony murder for having a miscarriage, although the charges were later dropped. Yes, this criminalizes the reproductive process.
Think this will end by the overturning of Roe? Alito tried to say that the legal decision only applied to overturning Roe. But the entire world knows about Alito’s inherent flexibility with the truth. Of course, this is just the first step that the MAGA hat wearing court justices want to take to get rid of civil rights. Justice Thomas could not have been clearer in his Concurrence when he said it was not just the right to abortion protected in Roe, but also protections for birth control in Griswold v. Connecticut, same-sex sexual relations in Lawrence v. Texas, same-sex marriage in Obergefell and protections for inter-racial marriage from Loving.
Once again, think that could not happen? The official position of the Texas GOP is that gays are an “abnormal lifestyle choice.” The state of Texas has already moved to criminalize transgender identity for those under 18 by opening investigations to have such children removed from their parents’ care and prosecute their parents for child endangerment. The Texas GOP is simply frothing to bring bills to outlaw same sex marriage, gay lifestyle, ban birth control and outlaw inter-racial marriages and try and make them all criminal conduct. Of course the right to travel freely between states is now in play as well.
Compliance professionals by nature try to get employees to do business ethically and in compliance with laws, rules, regulations and corporate policies. If you have operations in Texas that calculus has now changed. Not just a company headquartered in Texas but if you have any operations in Texas, the state of Texas will use that as an excuse to try and prosecute you. The Dobbs decision was about as bad a decision as the court could have articulated but as the Supreme Court is now formulated, it will only be the first. Every corporation will have to decide if the low tax structure and business friendly confines of the great state of Texas are worth the literal sacrifice of your employee’s health, right to live with and marry whom they please and even have access to birth control.

Categories
Compliance Into the Weeds

Impacts on Compliance of Russian Invasion of Ukraine

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. This week, Matt and Tom take a deep dive into some of the impacts on compliance from the Russian invasion of Ukraine. Highlights include:

·      How will the invasion impact your Supply Chain?

·      What are the attributes of a compliance program that can lead your corporate response?

·      What about cyber?

·      Will all this lead to a more holistic ERM response?

Resources

Matt in Radical Compliance