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FCPA Compliance Report

FCPA Compliance Report: The Boeing Plea Agreement – Culture is The Key

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. We take things in a different direction today as Tom Fox reposts the recent webinar with Sam Silverstein and Mike Volkov, where we took a deep dive into the Boeing Plea Agreement, the Monitorship, and why culture is the key to a Boeing turnaround.

We explore the recent plea agreement filed by Boeing, the outrage among victims’ families over the proposed penalties, and the appointment of an independent compliance monitor. Key issues discussed include the necessity of a culture overhaul at Boeing, the implications of excluding court jurisdiction over the monitorship, and the role of the board in fostering a culture of compliance and safety. The discussion highlights the critical need to focus on values, accountability, and transparent processes to rebuild trust and ensure long-term organizational integrity.

Highlights of this episode:

  • Details of the Plea Agreement
  • Compliance Monitor Appointment and Transparency
  • The Importance of Culture
  • The Role of Compliance Monitors
  • Board Involvement and Accountability
  • Victims’ Families and Organizational Accountability

Resources:

Sam Silverstein

Mike Volkov

The Culture Audit

Tom Fox

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2 Gurus Talk Compliance

2 Gurus Talk Compliance: Episode 32 — Shout Out to CCI

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!

In this episode of 2 Gurus Talk Compliance Podcast, hosts Kristy Grant-Hart and Tom Fox discuss major developments in the compliance world. The topics include the potential scope of Boeing’s monitorship related to the 737 MAX crashes, Italian raids on luxury brand manufacturers for modern slavery violations, insights from the year’s biggest risk assessment survey, and Florida man’s futile gun battle with a Walmart drone. Additionally, they delve into articles from Corporate Compliance Insights on well-being washing, Supreme Court’s rollback of Chevron deference, trade sanctions screening, effective use of AI in compliance, and the importance of regulating ephemeral messaging. The episode concludes with an entertaining Florida man story involving a shootout with a drone.

Stories Include:

  • To the DOJ: Go Big on Boeing. (CCI)
  •  Well-Being Washing (it’s a real thing). (CCI)
  •  Upgrading TPRM in the age of AI. (CCI)
  • Sanctioned or not? (CCI)
  • International Comms Compliance. (CCI)
  • Raids Find Luxury Handbags Being Made by Exploited Workers in Italy (WSJ)
  • Supreme Court Overrules Chevron, Sharply Limiting Judicial Deference To Agencies’ Statutory Interpretation (Gibson Dunn)
  • 2024 State of Risk & Compliance Report (NAVEX)
  • Is work taking over your life? Here’s how to reclaim your time. (WaPo)
  • A Florida man’s futile gun battle with a Walmart drone. (Fortune)

Resources:

Kristy Grant-Hart on LinkedIn

Spark Consulting

Prove Your Worth

Tom

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Blog

To the DOJ: Think Big and Go Big on the Boeing Monitorship

Perhaps the most significant blog post in the compliance arena was penned by Matt Ellis over 10 years ago when he challenged Walmart to “Go Big” on compliance. (They did.) We are now at another inflection point in compliance but in a very different set of circumstances from Walmart’s breach of the Foreign Corrupt Practices Act (FCPA). It involves the Department of Justice  (DOJ) and its decision on what to do about Boeing Company under the current Deferred Prosecution Agreement (DPA) from the 737 MAX crashes. Today I want to challenge the DOJ to Think Big and Go Big in its approach to dealing with Boeing going forward.

The issue the DOJ is grappling with is whether and how to get Boeing to fix the festering set of problems which led to the 737 MAX disasters and cultural toxicity have continued unabated since the DPA was agreed to by Boeing back in 2021. In May of this year, the DOJ notified Boeing that it was in breach of this DPA for failing “to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.” Now the DOJ is determining the steps to take.

The families of the victims of the 737 MAX crashes have been the loudest about the need to punish Boeing executives with criminal charges. They met with the DOJ and asked about criminal charges and a massive penalty. Now the DOJ has responded. According to the Wall Street Journal (WSJ), “Under the guilty-plea agreement outlined Sunday to families of the crash victims, Boeing would have to agree to hire an outside consultant to monitor its compliance with safety regulations. It also would pay an additional corporate penalty of about $243 million.”

It is the ‘outside consultant’ where the DOJ needs to ‘Go Big.’ How? By creating the most comprehensive monitoring plan ever used. Why? Because there has never been a corporate case more important to the United States than getting Boeing back on track. This is not a FCPA case where a company has admitted to bribery and corruption, even across the globe. This is not 2008 when banks were ‘too big to fail’. This is something completely different. This is the only major US aircraft manufacturer and one of the two biggest in the world. This is a company that provides products for nearly half of all American as Airlines for Americaestimates that 49% of all Americans flew commercially in 2023. Boeing is estimated to have generated over $77bn in revenue for America alone in 2023.

But Boeing’s importance to America is not simply about economics. Boeing is a key component in US national security. Boeing provides advanced missile defense systems, including the Ground-based Midcourse Defense (GMD) system, which protects the United States from ballistic missile attacks. The company also offers solutions for tracking and monitoring space objects, which is vital for maintaining the safety and security of space operations. Boeing is also a part of the Internal Space Station (ISS), orbital test vehicles and deep space exploration.

In short, there is probably no other single institution as important to the US in manufacturing as Boeing. Nearly 200 million American who fly in Boeing planes are depending on Boeing to get it right. The US (and world) economy need the drive that Boeing provides. The US national security depends on a well-functioning Boeing to lead the technological drive to protect the US for the rest of the 21st century and beyond. Boeing needs to continue its work for our drive as humans into what Gene Roddenberry called ‘space – the final frontier’ as one of the leading companies on space exploration. Finally, and certainly not least, the families of the victims of the two 737 MAX crashes should receive some justice for all they have been through and then seeing Boeing not live up to its agreement in the original DPA.

Most importantly, we all have an interest in Boeing getting its remediation right. Boeing must turn around from a culture where employees are afraid to step forward, there is acceptable slipshod work and work practices, where employees who do report problems are actively harassed, where employees lie and mislead federal regulators over basic safety issues and where the almighty dollar is put so far above safety that literally hundreds of lives are lost. All of this means a monitorship where there are multiple areas monitored, overseen and thoroughly remediated so that they pass the strongest form of testing and controls at the end of a lengthy period (at least 3 years). The Court also needs to stay actively involved in the monitorship, not simply reviewing annual or even greater reporting but testing any claims by Boeing through rigorous data analytics. Boeing has clearly demonstrated it is not capable of turning itself around and a new and daring approach is needed for the company.

I believe the DOJ should appoint an Omnibus Monitor who would oversee multiple monitors in specific subject matter areas. This would be far too big for any one law firm or a single consulting company. The Omnibus Monitor would be in charge of a wide variety of corporate disciplines that Boeing must get right to get out of the terrible corporate fix they find themselves in. What are some of the areas that should have their own monitorship under an Omnibus Monitor? Obviously, safety is at the core but also culture, compliance, Speak Up and Listen Up, Supply Chain, fraud, Export Control, Sanctions. On the overall aircraft manufacturing issues, the DOJ needs to work with the Federal Aviation Authority (FAA) to oversee all of this to meet the FAA regulatory requirements.

This would be by far the biggest monitorship ever because it is by far the most important monitorship ever. Just as Ellis challenged Walmart to ‘go big’ on compliance, I want the DOJ to Think Big and Go Big with an Omnibus Monitor for Boeing. Literally all of America and the world is depending on it.

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2 Gurus Talk Compliance

2 Gurus Talk Compliance: Kristy Gets a Diploma

What happens when two top compliance commentators get together? They talk about 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!

In this episode, we look at reports suggesting China is strategically relocating forced labor from the Uyghur region to different parts of the country in an attempt to bypass US laws prohibiting goods sourced from areas associated with forced labor.

This could trigger wider limitations on goods originating from China, stressing the necessity for intensive audits and transparency in business operations. This issue has sparked bipartisan concern, hinting at potential upcoming legal actions.

Tom stresses the need for companies to react effectively to reduce risks, possibly through on-the-ground audits and increased accountability in business operations in China. Kristy underscores the need for thorough audits and proactive measures in response to the risks associated with forced labor in China. She raises the possibility of legal consequences for companies found to be misleading about their involvement with forced labor. Both perspectives serve to underline the gravity and complexity of this issue.

 Highlights Include:

  • Can shareholders criticize companies (without being sued)? (WSJ)
  • The Brazilian Supreme Court throws out Car Wash convictions.  (FT)
  • Prosecutorial misconduct eviscerates Fat Leonard convictions.   (WaPo)
  • First declination in the export control case. (WSJ)
  • ABC crusader picked as Vietnam’s next president. (Bloomberg)
  • BMW and Jaguar used banned China parts – US probe – BBC
  • Supreme Court Holds CFPB’s Funding Structure Constitutional – Gibson Dunn –
  • Binance Gets Two Compliance Monitors in Settlements With U.S. Authorities – WSJ
  • How Companies Dodge Tariffs – New York Times –
  • Moment motorist jumps into Florida lake to evade police during 90 mph chase after taking test drive too far – New York Post

Resources:

Kristy Grant-Hart on LinkedIn

Spark Consulting

Tom

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Compliance Tip of the Day

Compliance Tip of the Day: Monitor Selection, Is it Still a Thing

Welcome to “Compliance Tip of the Day,” the podcast where we bring you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements.

Whether you’re a seasoned compliance professional or just starting your journey, our aim is to provide you with bite-sized, actionable tips to help you stay on top of your compliance game.

Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law.

Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.

In this episode, we ask the question of whether monitor selection is still something an organization needs to consider.

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Everything Compliance

Everything Compliance – Episode 131, The Whistleblower Edition

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows. In this episode, we have a quintet of commentators; Jonathan Marks, Matt Kelly, Jonathan Armstrong, Jay Rosen, and Special Guest Mary Inman; all hosted by Tom Fox.

1. Matt Kelly bemoans the lack of monitoring in recent FCPA enforcement actions. He shouts out to Ken Buck for his resignation from Congress.

2. Host Tom Fox shouts out to the Ides of March and the Mooring Theater Company’s Production of Shakespeare’s play Julius Caesar,  starring Corin and Vanessa Redgrave.

3. Jonathan Armstrong reviews NIS2 and the changing climate around cybersecurity regulation. He rants about the disaster management failures of the British Crown around Kate Middleton.

4. Jay Rosen looks at the enforcement action involving Gunvor S.A. and the potential Vice-Presidential candidacy of Aaron Rogers and says, “You ain’t no Bill Bradley.”.

5. Special Guest Mary Inman takes a deep dive into the DOJ whistleblower bounty program.  She shouts out to whistleblower John Barnett and rants about the need for mental health resources to be made available to whistleblowers.

6. Jonathan Marks looks at the DOJ’s renewed call for self-disclosure. shouts out a fast-thinking and fast-acting McDonald’s employee who used CPR to save a customer who had a heart attack.

The members of the Everything Compliance are:

Jay Rosen– Jay can be reached at Jay.r.rosen@gmail.com

Karen Woody – One of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu

Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com

Jonathan Armstrong –is our UK colleague, who is an experienced data privacy/data protection lawyer in London.

Jonathan Marks can be reached at jtmarks@gmail.com.

The host, producer, ranter (and sometimes panelist) of Everything Compliance is Tom Fox, the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

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Great Women in Compliance

Great Women in Compliance – Alejandra Montenegro Almonte on Workplace Culture and Compliance

Welcome to the Great Women in Compliance Podcast. In this episode, Lisa visits with Alejandra Montenegro Almonte, who is a member at Miller & Chevalier and is the Chair of their International Practice and Practice Co-Lead, Workplace Culture. Prior to joining Miller & Chevalier, she was General Counsel for the North American and Latin American Division at Gategroup and an associate at Weil, Gotshal & Manges.  Alejandra has won awards and recognition from Chambers, Best Lawyers in America and Latin America, among others.

In this episode, Alejandra discusses her experience in global ethics and compliance programs, from advising on best practices to workplace investigations.  Alejandra has leveraged her experience in-house and at law firms to provide practical advice and explains her approach to advising clients.

Alejandra also provides insight on her experiences with monitorships, as she has advised clients in monitorships and acted as a monitor.  She talks about the importance of a proactive relationship between the monitor and the organization, as well as some thoughts about best practices for communications and meetings.

She applies a similar set of principles to all of her work, focusing on learning about a business, including its market dynamics and risks, as part of building the best program for that organization.  She uses that as a foundation for her work on program enhancements and on how to conduct workplace investigations.

As this is Women’s History Month, Alejandra provides some ideas on how we can best support women and diversity in our workplaces.

Key Highlights:

  • Building Global Ethics & Compliance Programs
  • Experience in Monitorships as an Advisor and a Monitor
  • Providing Practical Advice on Compliance Risks
  • Cultural Nuances in Global Workplace Dynamics
  • Insights During Women’s History Month

Resources

Join the Great Women in Compliance community on LinkedIn here.

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Compliance Into the Weeds

Compliance into The Weeds: To Monitor or Not to Monitor: What is even The Question?

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 more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt take a deep dive into the seeming inconsistency in approaches to monitoring (or lack thereof) in two recent DOJ enforcement actions involving eBay and SAP.

The Department of Justice’s (DOJ) seemingly inconsistent approach to corporate enforcement and compliance monitoring has been a topic of much debate and confusion. Or has it? This inconsistency is particularly evident in the assignment of compliance monitors and CCO certification, as seen in the contrasting cases of eBay and SAP. Does the DOJ have a contradictory approach? What are the criteria for assigning monitors? Are local U.S. Attorneys may be following their own agendas, leading to this inconsistency. Is there a lack of logic and effectiveness in the DOJ’s policies? To delve deeper into this issue, join Tom Fox and Matt Kelly in this episode of Compliance into the Weeds.

Key Highlights:

  • Effectiveness and Consistency of Compliance Monitors
  • Incentivizing self-disclosure and remediation in corporate enforcement
  • Inconsistent assignment of monitors based on misconduct
  • Inconsistent enforcement practices by U.S. Attorneys

Resources:

Matt on Radical Compliance

Tom 

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2 Gurus Talk Compliance

2 Gurus Talk Compliance – Episode 17: Self-Improvement 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! In this episode, Tom and Kristy take on various topics, including the self-improvement of Florida Man gone astray.

Challenges are constant in the ever-evolving regulatory compliance and risk management world, and strategies must be dynamic. Tom highlights the technological shortcomings of many compliance programs and the critical role of compliance officers in mitigating reputational damage. He emphasizes continuous improvement and vigilance, ensuring due diligence and monitoring compliance strategies. Kristy acknowledges the progress made in the field over the past two decades but also points out the technology gap in integrating governance, risk, and compliance data. She underscores the need for better handling of integrated reporting in the future. Join Tom Fox and Kristy Grant-Hart as they delve deeper into these issues in this 2 Gurus Talk Compliance podcast episode.

Highlights Include:

  1. What does the lull in FCPA enforcement mean for chief compliance officers? (FCPA Blog)
  2. CA enacts climate change disclosures. (HLS Forum on Corp Governance)
  3. CFTC and monitors. (Compliance and Enforcement)
  4. U.S. Warns Businesses to Guard Against Iran Missile Push (WSJ)
  5. Combining COI and Risk Assessments. (COI Blog)
  6. U.S. Lifts Broad Sanctions Against Venezuela for Six Months (WSJ)
  7. The Gap In SEC Individual FCPA Enforcement Actions Is Over Three Years (FCPA Professor)
  8. Report: Insourcing Up, Confidence Too (Radical Compliance):
  9. Prosecutors in Sam Bankman-Fried trial compare defense argument to ‘Dumb and Dumber’ (CNBC)
  10. Florida man’s quest to fulfill ‘daily theft quota’ lands him in jail across county lines, deputies say (Fox Orlando)

 Resources: 

Kristy Grant-Hart on LinkedIn

Spark Consulting

Tom

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Everything Compliance

Episode 114, The Monaco, Polite & ECCP Edition

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows. Everything Compliance has been honored by W3 as the top talk show in podcasting. In this episode, we have the quartet of Tom Fox, Jonathan Marks, Matt Kelly and special guest Scott Garland from Affiliated Monitors, who discuss at the recent speeches by DAG Lisa Monaco and Kenneth Polite, announcing changes in the DOJ’s Evaluation of Corporate Compliance Programs. We conclude with our fan fav Shout Outs and Rants section.

  1. Matt Kelly looks at the changes around clawbacks. He shouts out to the PCAOB for reminding folks that cryptocurrency ‘reserve reports’ are not worth the paper they are printed on.
  2. Jonathan Marks considers what the two speeches and changes in the ECCP mean for corporate governance. He shouts out to US House of Representatives for overwhelmingly voting to investigate the origins of Covid-19.
  3. Tom Fox looks at the changes to incentives, both financial and non-financial in the 2023 ECCP. He rants about the Tennessee legislature attempt to ban Shakespeare, movies such as Tootie and Some Like It Hot, politicians such as George Santos; all in the guise of banning drag shows.
  1. Special Guest Scott Garland looks at the changes in the monitor selection process and what that means for the line attorney prosecuting a FCPA violation. He shouts out to the Department of Justice for their continued evolution in their thinking about compliance and compliance programs.

The members of the Everything Compliance are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Karen Woody – One of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu
  • Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong –is our UK colleague, who is an experienced data privacy/data protection lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com
  • Jonathan Marks is Partner, Firm Practice Leader – Global Forensic, Compliance & Integrity Services at Baker Tilly. Marks can be reached at marks@bakertilly.com

The host and producer, ranter (and sometime panelist) of Everything Compliance is Tom Fox the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.