Categories
Culture Crafters

Culture Crafters – The Increased Importance of Corporate Culture During FCPA Suspension

It is always interesting when the regulators catch up to the business world. That is what has happened around corporate culture. The Department of Justice is now assessing corporate culture for any company under investigation. Yet, more than simply complying with this mandate, companies should strive to foster the best culture that they can achieve. The reason is deceptively simple- the better the culture, the better the company. However, many business executives and even compliance professionals do not know how to craft a culture that allows your employees and your organization to implement such strategies. How can you unlock the power of a thriving workplace culture?

In this podcast series, Sam Silverstein, the most trusted voice in America on accountability, and Tom Fox, the Voice of Compliance, look at how companies can elevate their culture to new heights. In this episode, Tom and Sam begin a three-part series on the increased importance of compliance after Trump’s Executive Order suspending FCPA enforcement.

Key insights:

  • Impact of Trump’s FCPA Suspension
  • Importance of Corporate Culture
  • Culture Audit and Employee Attraction
  • Workplace Culture and Innovation
  • Speak Up vs. Listen Up Culture

Resources:

Sam Silverstein

Sam Silverstein on LinkedIn

Sam Silverstein

The Culture Audit™

Tom Fox

Instagram

Facebook

YouTube

Twitter

Categories
Daily Compliance News

Daily Compliance News: February 26, 2025, The Corrupt World 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:

  • Meta faces a lawsuit for using cheap foreign workers. (Reuters)
  • Why world corruption hurts America. (Foreign Affairs)
  • Coinbase says the SEC will drop the lawsuit. (CNN)
  • Leveling, not raising. (WaPo)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the FCPA Survival Guide on Amazon.com.

Categories
2 Gurus Talk Compliance

2 Gurus Talk Compliance – Episode 46 – The Move to Diligent 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:

  • JPMorgan’s purchase of Frank heads to criminal trial. (FT)
  • Dirty money, fentanyl, Mexican gangs, and China. (WSJ)
  • Mayor Adams imbroglio (Various)
  • McKinsey asks if China is too risky. (Bloomberg)
  • Ethics programs are more than simply compliance. (Forbes)
  • Wells Fargo banks on (Not) risky business. (PYMTNS)
  • Diligent Acquires Spark Compliance, a Leading Compliance and Ethics Consultancy (Press Release) – HERE
  • Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security (Whitehouse) – HERE
  • The Corporate Transparency Act Is Back On (WSJ) – HERE
  • Study Warns on Ethical Culture Disconnect (Radical Compliance) –HERE
  • Florida woman, 44, uses ‘botox’ excuse to explain age after fraudulently applying for hurricane aid: police (Fox News): HERE

 

Resources:

Kristy Grant-Hart on LinkedIn

Spark Consulting

Prove Your Worth

Tom

Instagram

Facebook

YouTube

Twitter

LinkedIn

Categories
All Things Investigations

All Things Investigations – Implications of Trump’s FCPA Executive Order with Mike DeBernardis

Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this podcast, host Tom Fox is joined by HHR Partner Mike DeBernardis to discuss the recent executive order by the Trump administration to pause the enforcement of the Foreign Corrupt Practices Act (FCPA) for 180 days.

They take a deep dive into the potential implications for compliance programs, the continuing relevance of the FCPA, and the broader legal and business effects of this temporary halt. The conversation also explores how companies might navigate this hiatus, consider the long-term implications, and maintain robust compliance standards despite the pause in enforcement. Highlights include Mike’s insights on the intersection of compliance and business efficiency and the potential for non-US authorities to fill any enforcement void created by the U.S. Department of Justice’s pause.

Key highlights:

  • Executive Order on FCPA Enforcement
  • Implications for FCPA Compliance
  • SEC and Business Implications
  • Compliance Programs and Business Practices
  • Future of FCPA Guidance
  • Opportunities for Compliance Officers

Resources:

Hughes Hubbard & Reed website

Categories
10 For 10

10 For 10: Top Compliance Stories For the Week Ending February 15, 2025

Welcome to 10 For 10, the podcast that brings you the week’s Top 10 compliance stories in one podcast each week. Tom Fox, the Voice of Compliance, brings you the compliance professional and the compliance stories you need to know to end your busy week. Sit back, and in 10 minutes, hear the stories every compliance professional should know from the prior week. Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for the compliance professional, all curated by the Voice of Compliance, Tom Fox. Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

  • SEC looks to muzzle shareholders. (WSJ)
  • Was Shell scammed on oil cleanup? (BBC)
  • Acting US Attorney for SDNY quits over Trump interference. (NYT)
  • CFIUS enforcement is likely to continue under Trump. (Reuters)
  • US drops again on TI-CPI. (WaPo)
  • Mike Madigan was found guilty. (Law360) sub req’d
  • A green light for corruption. (FT)
  • CFPB ordered all work to be stopped ‘immediately’. (NYT)
  • Musk is now making referrals to the US Attorney. (Reuters)
  • McKinsey asks if China is too risky. (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

You can check out the Daily Compliance News for four curated compliance and ethics-related stories each day here.

Connect with Tom 

Instagram

Facebook

YouTube

Twitter

LinkedIn

Categories
Blog

Right is Right/Wrong is Wrong: Trump, The FCPA and Effective Compliance

In a surprise to no one, President Trump said he was suspending Foreign Corrupt Practices Act (FCPA) enforcement. Why is it no surprise? Because the FCPA commits illegal bribery and corruption against foreign officials and employees of state-owned enterprises outside the US. Trump wants to make such business tactics legal for US companies, as he thinks US companies cannot compete with other international actors without engaging in such illegal conduct. But the reality is that Mark Twain was correct; ‘right is right and wrong is wrong,’ and Trump’s pronouncement of non-enforcement did not make bribery and corruption of foreign officials and employees of state-owned enterprises outside the US legal. This announcement also puts more US companies at risk for shakedowns by corrupt foreign officials.

For the compliance professional, this suspension of FCPA enforcement will make having an effective corporate compliance program even more important for the upcoming 3+ years of Trump’s final term. I want to break down the reasons for continued effective compliance into legal and business.

Criminal Reasons

A. 5-Year Statute

The FCPA is still the law of the US. Any company or person who now engages in bribery and corruption of foreign officials and employees of state-owned enterprises outside the US will violate the FCPA. There is a five-year statute of limitation on FCPA enforcement, so even if your organization decided to start bribing today, there would be a five-year window of potential liability. Moreover, it is five years from the discovery of the illegal conduct, so unless your organization affirmatively states via its books and records that it has engaged in illegal activities and violated the FCPA, there will be an even longer tail for investigation and prosecution.

B. SEC and Books and Records

Remember, the FCPA has two basic provisions. One, thou shalt not bribe foreign officials and employees of state-owned enterprises outside the US. Second, thou shalt have accurate books and records. The Securities and Exchange Commission (SEC) enforces this second component of the FCPA. It has two parts: (a) financial books and records that accurately reflect the financial condition of the organization and (b) effective internal controls that prevent bribery and corruption. Is the SEC now going to turn its back by allowing companies that engage in illegal actions to puff up their profits to defraud the American public?

C. Individual Prosecutions Outside the US

The stakes are even higher for the individual corporate employee doing business outside the US. NO country in the world says that bribing our government officials is legal. That makes any such bribe illegal. This is not about an extra-territorial law such as the FCPA, where China or Nigeria would come to the US and arrest a US citizen for actions in China or Nigeria. Instead, it is about China or Nigeria enforcing their domestic laws. Remember the GlaxoSmithKline PLC (GSK) bribery conviction in China in 2014. A Chinese court fined the company nearly $500 million dollars. Equally significant was the criminal conviction of the Country Manager and several of his direct reports. With the Trump Administration aiming more tariffs and other trade sanctions at China, does anyone not think the Chinese government may well open investigations, warranted or not, at US corporations doing business in China and US individuals working in China? (For a full discussion of the entire sordid affair of GSK in China, read my book on it, available on Amazon.com)

What about detaining US businesspersons on more trumped-up charges? Just look at what purported US ally Nigeria did to Binance compliance officer Tigran Gambaryan in 2024. According to the New York Times (NYT), the “Nigerian government charged Mr. Gambaryan and Binance itself with tax evasion and money laundering — effectively accusing the company and a midlevel employee of the same crimes.” He was held in custody for eight months in a Nigerian prison in Abuja. Both the GSK matter and Gambaryan’s case point to the real risks that US businesspersons may now well face if they engage in bribery and corruption outside the US. Wherever you want to be, a prison in China or Nigeria is not one of those places.

Business Reasons

A. The Bribery Tax

Paying bribes is a cost. Once you pay a bribe, corrupt officials have you in their collective back pockets. Multiple FCPA enforcement actions over the years have demonstrated that corruption officials are never shy about demanding more illegal payments during the life of a business relationship. Does an organization think a one-time bribe payment will secure your contract? Once corrupt government officials eat at the trough of a corrupt company, they always come back for more. Churchill said, ‘One, we have established your morals; now it’s just a question of the amount.’

Bribery can be a one-time payment or much more ongoing. Bribes are a percentage of the overall contract value and can go up or down. Who is going to keep those records, and how does an organization engage in such negotiations? It sounds like trying to negotiate with organized crime. The bottom line is that bribes are a tax that any organization subjects itself to when it engages in corruption.

B. Negative Impact on Revenue

Not only does paying bribes put an individual and organizations at criminal risk, but it can also be more costly and a less effective business strategy in the long run. A CFO.com article reported that George Serafeim and Paul Healy of Harvard Business School released a paper in the American Accounting Association journal The Accounting Review that the business impact of paying bribes “overall effect on a company’s finances is nil—a poor result, given that the practice could trigger damaging media. Yet bribes are costly. The low returns on equity on incremental sales in high-corruption markets for firms [that commit bribery] imply that the costs are not fully recovered through higher prices on corrupt contracts or through scale economies from increased sales.”

Statistically, the authors reviewed some “480 large multinational companies from 32 countries; those with strong anticorruption programs had average sales growth over three years of 2.6% in high-bribery countries or regions, far below the 14.1% achieved by anticorruption laggards. Yet, that didn’t translate to a greater gain in return on equity for the latter group compared with the former. “On average, the sales growth and ROE effects are offsetting.”

C. Department of Bribery and Corruption

Now, think about the business impact of how bribes might be paid. Will your organization go full Siemens or Odebrecht and create an entire department dedicated to bribery and corruption? Will your organization change its Code of Conduct to say that now that the Trump Administration has suspended FCPA enforcement, your company will engage in illegal acts? Are you going to try to hide your newfound business strategy? If so, what is the cost of announcing that your organization believes in unlawful acts to gain business? What business executive will lead this organization and put their head on the chopping block for directing illegal activity?

Your organization would be skewered in the court of public opinion. Just as consumers have no interest in purchasing clothing or other products created by slaves or forced labor, they would have zero interest in companies that pay bribes to garner business. Such actions could also lead to more civil actions for anti-competitive behavior brought by private parties.

But here, the greater risk is internal for companies. After 20 years of training on not paying bribes, how to spot a bribe, and who not to do business with, the Trump Administration expects US companies to change course. What will this do to a culture of doing business ethically and in compliance? If corporate execs set up a Department of Bribery and Corruption or try to hide it, what message does that send to employees? It sends the message that engaging in bribery, corruption, and fraud is acceptable in our organization.

This fraud component may be the most important business reason for robust compliance. Every ACFE Report to the Nations makes clear that corruption is a subset of fraud. Any company that supports bribery and corruption will be more susceptible to employees engaging in fraud. After all, if a company is willing to violate the law to make money, why shouldn’t employees do so as well?

III. Compliance is the Key

I have set out all of these scenarios to explain why compliance will become even more important during this second Trump administration. If doing ethics is doing the right thing when no one is looking, then compliance should be seen as the business process that follows up to ensure it is all happening. Going forward, the need for effective compliance will only increase, and the pressure on compliance professionals will intensify. An effective compliance program will make your business run more efficiently and more profitably. It will protect your organization from various woes brought on by the current administration.

Categories
Compliance Into the Weeds

Compliance into the Weeds: End of FCPA and CFPB?

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to explore a subject more fully. Are you looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this Compliance into the Weeds episode, Tom Fox and Matt Kelly review the Trump Administration’s attempts to end enforcement by the CFPB and corruption under the FCPA.

Last week, significant alterations were made to enforcement policies related to the Foreign Corrupt Practices Act (FCPA) and the Consumer Financial Protection Bureau (CFPB), resulting in a noticeable reduction in enforcement efforts and a shift in focus towards issues like corporate bribery associated with drug cartels and human trafficking. These actions will create risks for U.S. businessmen in countries like China, who might face false charges due to the de-emphasis on traditional FCPA enforcement, and these policy shifts might expose U.S. companies to anti-corruption investigations leveraged by other countries in retaliation to Trump’s trade policies.

Matt Kelly emphasizes the need for businesses to maintain robust compliance programs despite the enforcement rollback, warning that legal risks remain due to the statute of limitations, and stresses the importance of upholding corporate compliance and ethical standards to prevent corruption. Through their extensive experiences in compliance and corporate governance, both Tom and Matt highlight the complexities and potential repercussions of these enforcement changes on global business operations.

Key highlights:

  • Introduction: Unpacking the Current Situation
  • Emphasis on Corporate Bribery in Enforcement Changes
  • Upholding Compliance Duties Amid Enforcement Changes
  • FCPA and CFPB Statute of Limitations
  • Global Business Impact of Trump’s Trade Policies

Resources:

Matt in Radical Compliance

Tom

Instagram

Facebook

YouTube

Twitter

LinkedIn

Categories
Daily Compliance News

Daily Compliance News: February 11, 2025, The Pause in FCPA Enforcement 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:

  • Trump orders pause in FCPA enforcement. (WSJ)
  • What is illegal DEI? (NYT)
  • AI washing for lawyers. (Reuters)
  • US companies whine about EU and ESG rules. (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the FCPA Survival Guide on Amazon.com.

Categories
10 For 10

10 For 10: Top Compliance Stories For the Week Ending February 8, 2025

Welcome to 10 For 10, the podcast that brings you the week’s Top 10 compliance stories in one podcast each week. Tom Fox, the Voice of Compliance, brings you the compliance professional and the compliance stories you need to know to end your busy week. Sit back, and in 10 minutes, hear the stories every compliance professional should know from the prior week. Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for the compliance professional, all curated by the Voice of Compliance, Tom Fox. Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

  • Fay Vincent warned MLB of the corruption from gambling. (NYT)
  • Do we need eyes on compliance gatekeepers? (The Regulatory Review)
  • MLB fires ump for shared betting accounts. (ESPN)
  • WVU replaces DEI with “Dept. of Engagement and Compliance”. (12WBOY)
  • Will Trump DOJ drop corruption charges against NYC Mayor? (Reuters)
  • Shien IPO runs into Uyghur issues. (Reuters)
  • Top SEC crypto lawyer reassigned to IT. (WSJ)
  • Pam Bondi confirmed as new AG. (Bloomberg)
  • Bondi cuts back on FCPA enforcement. (Radical Compliance)
  • Is the Rooney Rule still legal? (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

You can check out the Daily Compliance News, which features four curated compliance and ethics stories each day here.

Connect with Tom 

Instagram

Facebook

YouTube

Twitter

LinkedIn

Categories
Daily Compliance News

Daily Compliance News: February 7, 2025, The Transactional, Not Material, World 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:

  • New AG signals FCPA retreat. (Radical Compliance)
  • With apologies to Madonna, it’s a transactional world. (FT)
  • Shein, forced labor, and the EU DSA. (TechCrunch)
  • Is the Rooney Rule still legal? (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out The FCPA Survival Guide on Amazon.com.