Tag: FCPA

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Profit Sharing as Bribery: The Honeywell FCPA Enforcement Action: Part 3 – The Comeback

To close out 2022 in Foreign Corrupt Practices Act (FCPA) enforcement actions, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) announced settlements of FCPA enforcement actions with Honeywell UOP, a US-based subsidiary of Honeywell International Inc. For its actions, Honeywell agreed to a criminal penalty of about $79 million, with the DOJ crediting up to $39.6 million of the criminal penalty for Honeywell’s payments to authorities in Brazil in related proceedings. The company agreed to pay the SEC $81.5 million in disgorgement and prejudgment interest and the SEC provided for an offset of up to $38.7 million for payments to Brazilian authorities. Today, I want to conclude with some lessons learned.

Honeywell’s Comeback

  1. Overcoming a Failure of Culture

When the underlying facts of this enforcement action began, Honeywell had one of the most corrupt cultures you could have imagined. As I noted yesterday, the bribery scheme in Brazil began with the business unit outright lying to the compliance function about a corrupt agent. But do not absolve the company’s compliance function as apparently they performed no due diligence or did even the bare minimum for agents in a clear high-risk jurisdiction. Unfortunately, this outright corruption and/or malfeasance only went downhill from there. There was a profit-sharing agreement with the corrupt Petrobras agent which clearly showed malfeasance from Honeywell’s finance folks for paying such a scheme where there was no written agreement or any other evidence which warranted payments of over $10 million. The bribery scheme in Algeria involved the corrupt third-party Unaoil and once again bribe payments were approved all the way up the business and compliance line with Honeywell Belgium finance signing off as well.

Yet even with this clear culture of corruption, Honeywell received a 25% discount off the minimum fine and penalty under the US Sentencing Guidelines. They did this without self-disclosing. Once again since Unaoil was involved, it would be a logical assumption, the Unaoil executive brought to the US and given immunity proved the initial information on Honeywell’s corruption. Honeywell did turn things around so that in addition to the 25% discount, they were not required to sustain a monitor. All in all, quite a comeback.

2. Extraordinary Cooperation

According to the Deferred Prosecution Agreement (DPA), Honeywell received full credit for its cooperation with the DOJ through its “(i) proactively disclosing certain evidence of which the Fraud Section and the Office were previously unaware; (ii) providing information obtained through its internal investigation, which allowed the government to preserve and obtain evidence as part of its own independent investigation; (iii) making detailed presentations to the Fraud Section and the Office; (iv) voluntarily facilitating interviews of employees; (v) collecting and producing voluminous relevant documents and translations to the Fraud Section and the Office, including documents located outside the United States.” The SEC added in its Order, “Honeywell cooperated in the Commission’s investigation by identifying and timely producing key documents identified in the course of its own internal investigation, providing the facts developed in its internal investigation, and making current or former employees available to the Commission staff, including those who needed to travel to the United States.”

2. Extensive Remediation

Honeywell was given credit by both the SEC and DOJ for its remedial efforts. The SEC said, the “remediation included: (i) strengthening its ethics and compliance organization; (ii) terminating sales directors involved in the misconduct in Brazil and demoting an employee with significant supervisory responsibilities over the misconduct in Brazil; (iii) implementing a program to eliminate UOP’s use of sales agents altogether (as of 3Q 2021, UOP had reduced its sales agent force by two-thirds); (iv) enhancing Honeywell’s policies and procedures including with respect to due diligence of third parties (including consolidating the due diligence process into one automated system and requiring third parties to submit quarterly reports and FCPA certifications); (v) improving Honeywell’s financial controls over third parties (including implementing digital end-to-end controls over payments to third party sales agents and ensuring that payments to sales intermediaries are made by wire transfer to an account belonging to the same party and to a bank account where the sales intermediary resides); and (vi) enhancing training provided to Honeywell employees and sales intermediaries regarding anti-corruption, controls, and other compliance issues.”

The DOJ noted that Honeywell, “(i) commencing remedial measures based on internal investigations of the misconduct prior to the commencement of the Fraud Section’s and the Office’s investigation; (ii) disciplining certain employees involved in the relevant misconduct, including terminating one employee; (iii) strengthening its anti-corruption compliance program by investing in compliance resources, expanding its compliance function with experienced and qualified personnel, and taking steps to embed compliance and ethical values at all levels of its business organization; (iv) substantially reducing its anti-corruption risk profile by taking steps to eliminate the Company’s use of sales intermediaries and, in the interim, rolling out a single, automated sales intermediary due diligence tool that requires responsible managers to provide quarterly compliance certifications for all existing sales intermediaries; (v) establishing monitor and audit processes to regularly review and update the compliance program; and (vi) enhancing its internal reporting, investigations, and risk assessment processes.”

From the SEC Order, the two key changes were: “(iv) enhancing Honeywell’s policies and procedures including with respect to due diligence of third parties (including consolidating the due diligence process into one automated system and requiring third parties to submit quarterly reports and FCPA certifications); (v) improving Honeywell’s financial controls over third parties (including implementing digital end-to-end controls over payments to third party sales agents and ensuring that payments to sales intermediaries are made by wire transfer to an account belonging to the same party and to a bank account where the sales intermediary resides);”. Both of these remediations speak to the use of tech solutions to enhance compliance. Under Prong IV, the implementation of one automated system for third parties.

From the DOJ DPA, the key changes were “(iii) strengthening its anti-corruption compliance program by investing in compliance resources, expanding its compliance function with experienced and qualified personnel, and taking steps to embed compliance and ethical values at all levels of its business organization; (iv) substantially reducing its anti-corruption risk profile by taking steps to eliminate the Company’s use of sales intermediaries and, in the interim, rolling out a single, automated sales intermediary due diligence tool that requires responsible managers to provide quarterly compliance certifications for all existing sales intermediaries;”. Once again, the tech solution noted in Prong IV was critical but also note the language found in Prong III about have ‘experienced and qualified [compliance] personnel.

By putting these remedial actions in place, Honeywell was able to avoid a monitor. This means the company not only put the changes in place but have also tested them to the satisfaction of the DOJ and SEC. But more than setting out what Honeywell did to make its comeback; these  remedial efforts of Honeywell provide a clear set of guidelines for the compliance professional to review in looking at your own program. This enforcement actions seems a fitting end for the year 2022 in FCPA enforcement.

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31 Days to More Effective Compliance Programs

Day 3 – Leadership’s Conduct at the Top

DAG Lisa Monaco’s speech in September 2022 announcing the Monaco Memo as articulated in the Monaco Doctrine laid out the very basics of compliance; that the key to every company is culture. She stated, “corporate culture matters. A corporate culture that fails to hold individuals accountable or invest in compliance — or worse that thumbs its nose at compliance — leads to bad results.”

From the enforcement perspective, the DOJ will assess companies for their ethical cultures. From the compliance perspective, the ethical tone of a company and accountability all start at the top and, most specifically, senior management. This requirement is more than simply the ubiquitous “tone-at-the-top,” as it focuses on the conduct of senior management. The DOJ wants to see a company’s senior leadership doing compliance. The DOJ asks if company leadership has, through their words and concrete actions, brought the right message of doing business ethically and in compliance to the organization. How does senior management model its behavior on a company’s values, and how is such conduct monitored in an organization?

I once had a Chief Executive Officer (CEO) observe the following, “You want me to be the ambassador for compliance.” I immediately said yes, that is exactly what I need you to do. As an “Ambassador of Compliance,” a CEO can fully model the conduct that senior management engages in going forward. Another area a CEO can forcefully engage an entire company is through a powerful video message about doing business the right way and in compliance. A great example was a CenterPoint Energy video put out in 2015 after the Volkswagen (VW) emissions-testing scandal became public. The video featured Scott Prochazka, CenterPoint Energy President, and CEO. He used the VW scandal to address the culture and values at the company proactively and used the entire scenario as an opportunity to promote integrity in the workplace. But more than simply a one-time video, the company followed up with an additional resource, entitled, Manager’s Toolkit—What does Integrity mean to you? that managers used to facilitate discussions and ongoing communications with employees around the company’s ethics and compliance programs. Finally, the cost for the video was quite reasonable as it was produced internally.

 Three key takeaways:

1. Senior management must do compliance; not simply talk-the-talk of compliance but also walk-the-walk.

2. Use your CEO to talk about current events and how those ethical failures are lessons to be learned for your organization.

3. Your CEO as Compliance Ambassador.

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The Corruption Files

Episode 15 – The ABB Settlement

Establishing trust can greatly affect the outcome of a case. Thomas Fox and Michael DeBernardis talk about ABB’s 2022 bribery case in South Africa, how self-disclosure benefits any situation, the DOJ’s approach on cracking down recidivists, choosing the right people for your team, and being wary of waivers.

▶️ The ABB Settlement with Tom Fox and Mike DeBernardis Background facts to the case. (00:00:29)

Tom lays out the facts of the ABB settlement. Michael points out the DOJ’s plans for penalizing recidivists and ABB’s biggest compliance misstep. (00:07:07)

Tom emphasizes the importance of compliance oversight, being vigilant of billing in high-risk jurisdictions, and the benefit of ABB’s “almost” self-disclosure. (00:12:08)

Mike discusses the impact of trust and incentivizing other recidivists to come forward and the risks of going off of real-time information. (00:18:27)

Tom mentions how having someone with experience concluding resolutions in the DOJ can make a difference. Even with a fairly low penalty, ABB is still required to report on its compliance program. (00:24:22)

Mike prefers having an independent monitor in place. However, he highlights ABB’s trust in their team to do a thorough job of reporting. (00:27:31)

Mike gives credit to ABB’s swift actions and extensive remediation, describing the DOJ’s outcome as “threading the needle”. Thomas believes the case is still a win for compliance. Michael drives home how doubling down on compliance pays off.

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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.

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Blog

Profit Sharing as Bribery: The Honeywell FCPA Enforcement Action: Part 2 – The King and Bribery Schemes

To close out 2022 in Foreign Corrupt Practices Act (FCPA) enforcement actions, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) announced settlements of FCPA enforcement actions with Honeywell UOP, a US-based subsidiary of Honeywell International Inc. For its actions, Honeywell agreed to a criminal penalty of about $79 million, with the DOJ crediting up to $39.6 million of the criminal penalty for Honeywell’s payments to authorities in Brazil in related proceedings. The company agreed to pay the SEC $81.5 million in disgorgement and prejudgment interest and the SEC provided for an offset of up to $38.7 million for payments to Brazilian authorities. Yesterday we laid out the broad outlines of the enforcement action. Today, I want to take a deep dive into the bribery schemes.

Bribery Schemes

 1. Brazil and Petrobras

Honeywell’s culture was so corrupt in 2010, when the facts around this matter began, that the business unit dealing with Petrobras could openly lie to the corporate compliance function. As stated in the Deferred Prosecution Agreement (DPA), “On or about May 27, 2010, two Honeywell UOP employees submitted a form requesting that Honeywell’s compliance department approve Brazil Sales Company to serve as Honeywell UOP’s sales agent. To increase the likelihood of receiving internal approvals, the Honeywell UOP employees lied on the request form, stating that Brazil Sales Company had been “known to” Honeywell UOP and a Honeywell UOP employee for two years, when, in fact, the companies had no common history and the Honeywell UOP employee had no prior knowledge of Brazil Sales Company.”

Let’s unpack this for a minute. This is a statement in the DPA, and it speaks to not only how poorly the compliance function was thought of internally but a sales function that openly used lying, cheating and fraud as part of their business practices. But not all blame lies with the business unit as where was the corporate compliance function in their trust but verify role? Apparently non-existent. When you wed a business strategy based on corruption and fraud both internally and externally, you can see where this was headed. By 2010, the corruption rot in Petrobras was well-known literally across the globe and there is no way that the Honeywell compliance function did not know doing business with Petrobras was not high risk.

It was at this early junction that the profit-sharing focus as the basis for the bribe payment was structured, “Honeywell Employee 1 and Intermediary 2 offered to pay Petrobras Official 1 one percent of the expected revenue from the Premium Refinery Contract, or approximately $4 million, in exchange for Petrobras Official 1 using his influence to help Honeywell UOP win the contract. They agreed to use a portion of Brazil Sales Company’s expected three-percent sales commission (approximately $12 million) from Honeywell UOP to pay the $4 million bribe. They also agreed that the remaining $8 million from the sales commission paid to Brazil Sales Company would be divided equally between the Intermediary 1 and Intermediary 2.”

Profit sharing with a cap was the basis for the bribe payment. Capitalism at its finest, only topped by the code name given to the corrupt Petrobras employee, the King. The King provided inside information to Honeywell on pricing and terms which the company used to bring in their bid so it would be the winning bid and Honeywell’s profit sharing with the King could commence.

Just how corrupt (or even more charitably inept) was Honeywell during this time frame? Consider the payment mechanisms outlined in the SEC Order. From 2011 to 2014, the Honeywell “employee responsible for processing the Brazil Agent’s commission payments calculated the Brazil Agent’s commission using numbers from UOP’s invoice and neither asked for nor included an invoice from the Brazil Agent before forwarding the payment request to Honeywell’s accounting group. The payment requests lacked relevant information and when the Brazil Agent changed his company’s name and wanted the commission payments routed to a Swiss bank account in the new company’s name, she forwarded the payment requests without question.” Honeywell was paying from US to Swiss bank accounts to parties with no reported due diligence or even contracts with Honeywell. This was not the compliance function making the payments but corporate accounts payable. Just how big an internal controls failure was this?

3. Algeria and Sonatrach

 This bribery scheme involved Honeywell Belgium and the well-known corrupt third-party agent Unaoil. In 2011, Honeywell Belgium hired Unaoil to help facilitate its relationship with Sonatrach. According to the SEC Order, right out of the box, Unaoil officials received “a panicked phone call from the HPS [Honeywell Belgium] Regional GM asking him to make a pass-through payment to a group of people in Europe who purportedly had helped Honeywell Belgium secure a contract with Sonatrach.” Things only got worse from there for Honeywell Belgium. Unaoil, “on behalf of Honeywell Belgium, paid the Sonatrach official $50,000 from a Swiss bank account and an additional $25,000 from the same Swiss bank account on December 28, 2011.”

Thereafter, Honeywell Belgium and Unaoil agreed to a commission structure of 4.5% for contracts landed by Unaoil with Sonatrach with an amount not to exceed $500,000. While no such work was delivered by Unaoil, it billed Honeywell Belgium a lump sum of $300,000 which was approved internally and paid by finance and “falsely recorded as a sales commission. Through a series of intermediary transfers, the Monaco Agent used a portion of the money from Honeywell Belgium to repay the Consultant who had paid the $75,000 in bribe payments to the Sonatrach official. The series of intermediary transfers involved multiple U.S. correspondent banks located in New York. The Monaco Agent admitted that it recorded the payments with internal codes the Monaco Agent sometimes used for bribe payments.”

Join me tomorrow where I conclude with some lessons learned from this final FCPA enforcement action from 2022.

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Blog

Profit Sharing as Bribery: The Honeywell FCPA Enforcement Action: Part 1 – Introduction

To close out 2022 in Foreign Corrupt Practices Act (FCPA) enforcement actions, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) both announced settlements of FCPA enforcement actions with Honeywell UOP, a US-based subsidiary of Honeywell International Inc. For its actions, Honeywell agreed to a criminal penalty of about $79 million, with the DOJ crediting up to $39.6 million of the criminal penalty for Honeywell’s payments to authorities in Brazil in related proceedings. The company agreed to pay the SEC $81.5 million in disgorgement and prejudgment interest and the SEC provided for an offset of up to $38.7 million for payments to Brazilian authorities.

US Attorney Alamdar S. Hamdani for the Southern District of Texas said in the DOJ Press Release,  “This case exemplifies corporate misconduct on a global level. Prosecuting and investigating this type of crime is an important role our office takes seriously in order to ensure fair and equal playing fields for U.S. companies and consumers. We will continue our efforts to aggressively investigate and prosecute those who violate the FCPA and combat corrupt practices in order to preserve the integrity of our nation’s business dealings here and abroad.”

According to the DOJ Press Release, “between 2010 and 2014, Honeywell UOP conspired to offer an approximately $4 million bribe to a then-high-ranking executive of Petróleo Brasileiro S.A (Petrobras) in Brazil. Specifically, Honeywell UOP offered the bribe to secure improper advantages in order to obtain and retain business from Petrobras in connection with Honeywell UOP’s efforts to win an approximately $425 million contract from Petrobras to design and build an oil refinery called Premium.” The company also ran into trouble in Algeria, as was noted in the SEC Press Release which stated, “in 2011, employees and agents of Honeywell’s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official to obtain and retain business with the Algerian state-owned entity Sonatrach.”

In Brazil, Honeywell entered into an agency agreement with a sales agent for the purpose of funding and paying the $4 million bribe to the high-ranking Petrobras executive. Interestingly, the corrupt Petrobras executive was paid a percentage of the contract value, which was funded with the full knowledge of Honeywell’s US corporate office. In exchange for the bribe payments and after obtaining business advantages, including inside information and secret assistance from the Petrobras executive, Honeywell won the contract. Honeywell earned approximately $105.5 million in profits from the corruptly obtained business. The Algerian bribes were paid by Honeywell Belgium through the well-known corrupt entity Unaoil and were made via a pass-through payment to a group of people in Europe who purportedly had helped Honeywell Belgium secure a contract with Sonatrach.

Honeywell was able to secure a Deferred Prosecution Agreement (DPA) from the DOJ and although the company did not self-disclose its conduct and therefore did not receive any discount for doing so, the company did receive a 25% discount through for its cooperation with the Fraud Section’s and the Office’s investigation “by, among other things, (i) proactively disclosing certain evidence of which the Fraud Section and the Office were previously unaware; (ii) providing information obtained through its internal investigation, which allowed the government to preserve and obtain evidence as part of its own independent investigation; (iii) making detailed presentations to the Fraud Section and the Office; (iv) voluntarily facilitating interviews of employees; (v) collecting and producing voluminous relevant documents and translations to the Fraud Section and the Office, including documents located outside the United States.” The SEC Order stated, “Honeywell cooperated in the Commission’s investigation by identifying and timely producing key documents identified in the course of its own internal investigation, providing the facts developed in its internal investigation, and making current or former employees available to the Commission staff, including those who needed to travel to the United States.”

Interestingly, while the DPA does require Chief Compliance Officer (CCO) certification, it does not mandate a monitor. According to Attachment F in the DPA, the Chief Executive Officer (CEO) and CCO are both aware of the compliance obligations of Honeywell as laid out in the DPA, and “based on a review of the Companies’ reports submitted to the Department of Justice, Criminal Division, Fraud Section and the United States Attorney’s Office for the Southern District of Texas pursuant to Paragraph 12 of the Agreement, the reports are true, accurate, and complete.” Moreover, both the CEO and CCO must certify that, based on their “review and understanding of Companies’ anti-corruption compliance programs, the Companies have implemented anti-corruption compliance programs that meet the requirements set forth in Attachment C to the Agreement. The undersigned certifies that such compliance programs are reasonably designed to detect and prevent violations of the anti-corruption laws throughout the company’s operations.”

Finally, as noted herein, the case was truly international both in the scope of the bribes paid and in the use of the well-known corrupt energy industry agent Unaoil by Honeywell. The Unaoil connection was most probably how the DOJ was first notified about Honeywell’s bribery and corruption. Enforcement was also international in scope with a part of both the DOJ and SEC fines and penalties credited to payments made by Honeywell based upon the investigation in Brazil by the Controladoria-Geral da União (CGU), the Ministério Público Federal (MPF), and the Advocacia-Geral de União (Attorney General’s Office).

Join me tomorrow where I take a deep dive into the bribery schemes, or profit sharing with a King.

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31 Days to More Effective Compliance Programs

Day 1 – What 2022 Brought To Compliance Programs

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 2023, I will post a key part of a best practices compliance program daily. 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 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.

2022 was a very significant year for every compliance practitioner and compliance program. While there was a paucity of corporate FCPA enforcement actions, three actions were significant, with multiple lessons for the compliance professional. In ABB, we learned about the costs of a corrupt culture and recidivism. In Glencore, we saw what happens to a company that engages in worldwide systemic bribery and corruption. Finally, in Stericycle, the company had a culture of corruption burned into the DNA of the LATAM business unit, which was so thorough that it was documented via bribery spreadsheets and analysis of revenue based on payments of bribes in LATAM. Yet even with this corrupt culture, the Stericycle enforcement action demonstrated how a company could take advantage of the discounts available under the FCPA Corporate Enforcement Policy by extensive cooperation and remediation during the pendency of the FCPA investigation, as the company obtained a 25% reduction off the bottom of the applicable US Sentencing Guidelines fine range.

September saw the announcement of a significant refinement of Department of Justice (DOJ) enforcement policies on the Foreign Corrupt Practices Act (FCPA) enforcement and corporate compliance programs. It was encapsulated in the Monaco Memo and a speech by Deputy Attorney General Lisa Monaco announcing the Monaco Doctrine. There was additional commentary by Principal Associate Deputy Attorney General Marshall Miller in a speech and by Assistant Attorney General Kenneth A. Polite. Every compliance professional should know them in detail as they significantly turn the heat up on corporate compliance programs. The Monaco Memo is further clarification and guidance for line prosecutors when considering whether to put a monitor in place. While we have seen these factors in a disparate manner, in disparate places, here they are in writing. Perhaps the greatest significance is that the Memo sets down all these matters in writing, which leads to a blueprint for DOJ thinking and a roadmap for anyone who finds themselves in an FCPA investigation or enforcement action. Finally, the Monaco Memo cemented the new DOJ requirement for CCO certification of compliance programs at the end of a resolution.

The final key event for compliance in 2022 was very much under the radar. The DOJ hired Matt Galvan to help develop data analytics expertise and capability for the FCPA Unit and the Fraud Section. Galvan was most recently the CCO at AB InBev and perhaps the top compliance professional in data analytics for a corporate compliance program. It will be most interesting to see where Galvan and the DOJ take this initiative, but it does portend the increasing use of data analytics in FCPA enforcement and compliance.

 Three key takeaways:

1. Key FCPA cases in 2022 were Glencore, ABB, and Stericycle.

2. The Monaco Memo refocused the DOJ’s efforts on FCPA and other white-collar crime and put the heat on compliance programs.

3. The DOJ’s hiring of Matt Galvan will focus on the DOJ’s expertise in data analytics and their employment in compliance programs.

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Blog

What 2022 Brought to Compliance

2022 was a very significant year for every compliance practitioner and compliance program. While there was a paucity of corporate FCPA enforcement actions, there were three enforcement actions were significant with multiple lessons for the compliance professional. In ABB, we learned about the costs of a corrupt culture and recidivism, in Glencore, we saw happens to a company which engages in worldwide, systemic bribery and corruption. Finally, in Stericycle, the company had a culture of corruption burned into the DNA of the LATAM business unit which was so thorough that it was documented via bribery spreadsheets and analysis of revenue based on payments of bribes in LATAM. Yet even with this corrupt culture, the Stericycle enforcement action demonstrated how a company can take advantage of the discounts available under the FCPA Corporate Enforcement Policy by extensive cooperation and remediation during the pendency of the FCPA investigation, as the company obtained a 25% reduction off the bottom of the applicable US Sentencing Guidelines fine range.

September saw the announcement of a significant refinement of Department of Justice (DOJ) enforcement policies on the around Foreign Corrupt Practices Act (FCPA) enforcement and corporate compliance programs. It was encapsulated in the Monaco Memo and a speech by Deputy Attorney General Lisa Monaco announcing the Monaco Doctrine. There was also additional commentary by Principal Associate Deputy Attorney General Marshall Miller, in a speech and a speech by Assistant Attorney General Kenneth A. Polite. Every compliance professional should all of them in detail as they significantly turn the heat up on corporate compliance programs.

The Monaco Memo is broken down into four main sections: I. Guidance on Individual Accountability; II. Guidance on Corporate Accountability; III. Independent Compliance Monitorships; and IV. Commitment to Transparency in Corporate Criminal Enforcement. The Monaco Memo is both further clarification and further guidance for line prosecutors when they are considering whether to put a monitor in place. While we have seen these factors in a disparate manner, in disparate places, here they are in writing. Perhaps the greatest significance is that the Memo sets down all these matters in writing which leads to a blueprint for DOJ thinking and a roadmap for anyone who finds themselves in an FCPA investigation or enforcement action.

I see the Monaco Memo and the Miller and Polite Speeches as complimentary releases of information which drive home several key changes in DOJ enforcement. Perhaps changes are too strong, but they these announcements make clear the DOJ is dedicated to individual accountability and prosecution. Corporations will have to reorient their approach to investigations and sharing of information with the DOJ to this new mandate. Next the DOJ is strongly shifting the burden in the investigatory and negotiation phases to make clear the company must come forward with evidence to support lower fines and penalties and greater discounts, particularly in individual financial penalties and incentives, i.e., clawbacks. The Monaco Memo laid out not simply how to avoid a monitor but a program of proactive monitoring which can lead to the prevention of a crime before the FCPA is violation. Finally, the Monaco Memo cemented the new DOJ requirement for CCO certification of compliance programs at the end of a resolution.

The final key event for compliance in 2022 was very much under the radar. It was the DOJ hiring of Matt Galvan to help develop a data analytics expertise and capability for the FCPA Unit and the Fraud Section. Galvan was most recently the CCO at AB InBev and perhaps the top compliance profession in the use of data analytics for a corporate compliance program. It will be most interesting to see where Galvan and the DOJ take this initiative, but it does portend the increasing use of data analytics in FCPA enforcement and compliance.

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Daily Compliance News

December 28, 2022 – The Declination 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:

  • Peru arrests generals for corruption. (DW)
  • Safran gets Declination. (WSJ)
  • Meta settles for Cambridge Analytica. (BBC)
  • Angola court orders dos Santos asset seizure. (Al Jazeera)
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Daily Compliance News

December 15, 2022 – The Neymar Acquitted 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:

  • Ex-Twitter employee gets three years for spying for Saudi. (Reuters)
  • Pods are part of the pump and dump scheme. (NYT)
  • Ericsson gets an additional year of the monitorship. (WSJ)
  • Neymar was acquitted of corruption charges. (ESPN)

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All Things Investigations

All Things Investigations: Episode 17 – Kevin Abikoff and Laura Perkins on the FCPA & Anti-Bribery Fall 2022 Alert

 

Welcome to the Hughes Hubbard Anti-Corruption and Internal Investigations Practice Group’s Podcast, All Things Investigations. In this podcast, host Tom Fox and guests Laura Perkins and Kevin Abikoff of the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group highlight some of the key legal issues in white-collar investigations, locally and internationally.

 

 

Laura Perkins is a Hughes Hubbard partner whose practice focuses on representing clients in Foreign Corrupt Practices Act and white-collar criminal investigations. She also advises clients on issues related to the FCPA, the federal securities laws, the False Claims Act, and other federal statutes. 

Kevin Abikoff is partner, deputy chair at Hughes Hubbard, and Chairman of the firm’s Anti-Corruption & Internal Investigations Practice Group. He specializes in securities and white-collar criminal litigation, enforcement, regulation, and counseling, emphasizing the representation of entities in anti-corruption (including FCPA) matters.

Key ideas we discuss in this podcast:

  • The DOJ’s recent discussions about requiring Chief Compliance Officer (CCO) certifications.
  • The Monaco Memo is a guidance document from the DOJ that sets expectations for prosecutors when investigating and prosecuting companies. 
  • How the Monaco Memo is taking a different approach to monitoring.
  • The Monaco Memo gives companies flexibility in how they approach compliance, demonstrating they take it seriously. 
  • The DOJ can now successfully prosecute internal controls in a criminal context.
  • Assessing the past year in FCPA.

 

Resources

Hughes Hubbard & Reed website 

FCPA & Bribery 2022 Fall Alert

Laura Perkins on LinkedIn

Kevin Abikoff on LinkedIn