Tag: Vin DiCianni

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Culture: Day 2 – Getting Culture Right

Vin DiCianni, founder of Affiliated Monitors, Inc. (AMI), talked about the Monaco speech and culture. He said, “The announcement by Deputy Attorney General Lisa Monaco and the Justice Department reignited the agency’s concentration of corporate liability for white-collar crimes. In doing so, she emphasized to businesses, their leadership, and the lawyers representing them how important it is to implement and maintain strong, effective compliance programs and how DOJ will con. In other words, the criticality of culture is now paramount. CCOs must focus on growing corporate culture to build the ethical foundation for a successful compliance program.

In the most recent MIT Sloan Management Review issue, Donald Sull and Charles Sull penned an article entitled “10 Things Your Corporate Culture Needs to Get Right”, in which they posited that “knowing what elements of culture matter most to employees can help leaders foster engagement as they transition to a new reality that will include more remote and hybrid work.” It is an excellent review of some of the key elements of corporate culture and how CCOs can move forward to lay the foundation of one.

CCOs and compliance functions face challenges while navigating the post-COVID-19 return to work. According to the DOJ’s regulations, businesses must uphold a healthy culture through corporate culture. The authors conclude, “Understanding the elements of culture that matter most to employees can help leaders maintain employee engagement and a vibrant culture as they transition to the new normal.”

Three key takeaways:

1. What distinguishes a good corporate culture from a bad one in the eyes of employees?

2. A good corporate culture forms the basis of a good compliance program.

3. How many elements of a good corporate culture are in your organization?

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31 Days to More Effective Compliance Programs

One Month to a More Effective Board – Vin DiCianni on Board Inquiries into Compliance

Where does “tone at the top” start? With any public and most private U.S. companies, it is at the Board of Directors. But what is the role of a company’s Board in compliance? We start with several general statements about the role of a Board in U.S. companies. First, a Board should not engage in management but should engage in oversight of a CEO and senior management. The Board does this by asking hard questions, risk assessment, and identification.

A white paper by Deloitte & Touche LLP, entitled, Risk Intelligence Governance—A Practical Guide for Boards, laid out six general principles to help guide Boards in the area of risk governance. These six areas can be summarized as follows:

• Define the Board’s role. There must be a mutual understanding between the Board, CEO and senior management of the Board’s responsibilities.

• Foster a culture of risk management. All stakeholders should understand the risks involved and manage such risks accordingly.

• Incorporate risk management directly into a strategy. Oversee the design and implementation of risk evaluation and analysis.

• Help define the company’s appetite for risk. All stakeholders need to understand the company’s appetite or lack thereof for risk.

• How to execute the risk management process. Maintain an approach that is continually monitored and has continuing accountability.

• How to benchmark and evaluate the process. Systems need to be installed which allow for evaluation and modifying the risk management process as more information becomes available or facts or assumptions change.

All of these factors can be easily adapted to compliance and ethics risk management oversight. Initially it must be important that the Board receive direct access to such information on a company’s policies on this issue.

 Three key takeaways:

1. The Board’s role is to keep really bad things from happening to a company.

2. There are six general areas the point can inquire into and lead from.

3. A Board should have direct access to information on the company’s compliance program.

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31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program with Boards – Board Failures

Next, consider a couple of landmark failures at the Board level around bribery and corruption.

VimpelCom Ltd. In 2015 (now Veon Ltd.), the DOJ alleged that Dutch telecom VimpelCom sought to enter the telecom market through the acquisition of a local player, Unitel, as an entrée into the Uzbekistan market. Unitel made clear to VimpelCom that to have access to, obtain, and retain business in the Uzbeki telecom space, VimpelCom would have to, according to the DPA, “regularly pay Foreign Officials millions of dollars” to Gulnara Karimova, the daughter of the then President of the country. VimpelCom also acquired another entity Butzel, that was at least partially owned by an Uzbeki government official, who hid their interest through a shell company, which was known to VimpelCom. VimpelCom did not articulate a legitimate business reason for the deal and paid $60 million for Buztel.

Ultimately, VimpelCom agreed to pay approximately $800 million in fines for these activities in 2016. 

BizJet. Another FCPA enforcement action involved the Tulsa-based company BizJet International Sales and Support Inc. (BizJet), which had four senior executives convicted for their participation in a bribery scheme. But this case also involved the Board of Directions. In the Criminal Information, it stated that in November 2005:

…at a Board of Directors meeting of the BizJet Board, Executive A, and Executive B discussed with the Board that the decision of where an aircraft is sent for maintenance work is generally made by the potential customer’s director of maintenance or chief pilot, that these individuals are demanding $30,000 to $40,000 in commissions, and that BizJet would pay referral fees in order to gain market share.

In both cases, this is where the rubber hits the road. If a company is willing to commit bribery and engage in corruption to secure business, no amount of doing compliance is going to help. If senior management is ready, willing, and able to lie, cheat and steal, the Board is the final backstop to prevent such conduct. Both the VimpelCom and BizJet Boards sorely failed in their compliance duties.  

Three key takeaways:

  1. Board liability will be severe based upon similar conduct going forward.
  2. Board members must critically challenge management on its conduct.
  3. The Board is the ultimate backstop against bribery and corruption.

For more information, check out The Compliance Handbook, 4th edition, available here.

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31 Days to More Effective Compliance Programs

One Month to More Effective Internal Controls – Culture as a Foundational Internal Control

To conclude this month’s series on Internal Controls, I am joined by Vin DiCianni, Founder and CEO of AMI. We discuss how corporate culture is a foundational internal control. It is a fascinating topic that is not discussed enough by compliance professionals.

3 Key Takeaways.

  1. It must start at the top.
  2. Hiring is critical to creating and sustaining an ethical culture.
  3. Creative internal controls around culture.
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Blog

Monaco Memo: A Jolt for Compliance: Part 1 – Introduction

Last week saw the announcement of two significant and related releases of information from the Department of Justice (DOJ) around Foreign Corrupt Practices Act (FCPA) enforcement and corporate compliance programs. They were the Monaco Memo and a Speech by Assistant Attorney General Kenneth A. Polite made at the University of Texas Law School. Every compliance professional should study them both.

Over the next several days, I will be blogging about each of them and other DOJ announcements. I will also have a series of podcasts about different aspects of the releases with a variety of guests including Affiliated Monitors, Inc. (AMI) founder Vin DiCianni, Morrison & Foerster LLP (MoFo) partner James Koukios and my Compliance into the Weeds co-host, Matt Kelly. The 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. Today I want to introduce each release and try to place it into the overall context of DOJ communications to the compliance community, compliance professionals and Chief Compliance Officers (CCOs).

The Monaco Memo builds on many of the topics first articulated by Deputy Attorney General (DAG) Lisa Monaco last October in a speech to the ABA White Collar Bar conference. Koukios said he had two major reactions to the Monaco Memo. First, “I think it’s great when the department puts out a Memo like this, that lays out very clearly.” It sets out the DOJ expectations which Koukios believes the DOJ strives to do for the corporate compliance professional and the white-collar defense bar, which they have done so in an iterative matter. From releases of documents such as the Phillips Memo, to the FCPA Corporate Enforcement Policy to the Evaluation of Corporate Compliance Program and its Update. He added, “I think this is another one of those really helpful memos that sets out the factors that the DOJ will consider.”

He sees the Monaco Memo going further by delineating the implications of the factors it sets out.  He went on to note, “I think that there is a lot more in this Memo than there have been in some other, more recent memos.” Moreover, it lays out multiple changes at both “a high level and at the more granular level as well.” Koukios concluded, “I think it’s a very impactful Memo that practitioners’ compliance officers and other people dealing with this space really should spend time reading and understanding.”

I visited with DiCianni on the Independent Compliance Monitorships component. DiCianni believes the Monaco Memo is both further clarification and further guidance for line prosecutors when they are considering whether or not to put a monitor in place. Echoing Koukios in this section of the Memo, he noted that it lays out both broad goals and guidelines and then drills down into specific requirements in a way “we’ve  never seen before.” Further, while many of the factors “are really quite interesting there are not really anything new and from the monitors perspectives.” And while we have seen these factors in a disparate manner, in disparate places, “here they are in writing.” Once again this echoed something Koukios told me, that perhaps the greatest significance is that the Memo sets down all of 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 Speech as complimentary releases which drive home several key changes in DOJ enforcement. Perhaps changes is 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 approach. 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 the area of individual financial penalties and incentives, i.e., clawbacks. Finally, the Monaco Memo lays 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.

The Memo itself said that the DOJ had established the Corporate Crime Advisory Group (“CCAG”)  to evaluate and recommend further guidance and consideration after the Monaco Speech from October 2021. This CCAG included leaders and experienced prosecutors from “components of the Department that handle corporate criminal matters: the Criminal Division; the Antitrust Division; the Executive Office of United States” to both evaluate and provide “revisions and reforms to enhance our approach to corporate crime, provide additional clarity on what constitutes cooperation by a corporation, and strengthen the tools our attorneys have to prosecute responsible individuals and companies.”

The DOJ review considered input from “a broad cross-section of individuals and entities with relevant expertise and representing diverse perspectives, including public interest groups, consumer advocacy organizations, experts in corporate ethics and compliance, representatives from the academic community, audit committee members, in-house attorneys, and individuals who previously served as corporate monitors, as well as members of the business community and defense bar.”

The Memo itself is designed to “promote consistency across the Department” by applying it  Department-wide. Some announcements establish the first-ever DOJ-wide policies on certain areas of corporate crime, “such as guidance on evaluating a corporation’s compensation plans; others supplement and clarify existing guidance. The policies set forth in this Memorandum, as well as additional guidance on subjects like cooperation, will be incorporated into the Justice Manual through forthcoming revisions, including new sections on independent corporate monitors.”

I hope you will join me tomorrow where I look at individual accountability and internal investigations.

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Innovation in Compliance

Not Your Father’s Monitor-Part 5: Vin DiCianni on Where Monitors are Going in 2022 and Beyond


In October, Deputy Attorney General (DAG) Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). Monaco’s remarks should be studied by every compliance professional as they portend a very large change in the way the DOJ will utilize monitors going forward. Over this podcast series, sponsored by AMI we will consider why DAG Monaco’s remarks herald a new era for monitorships.
Over this podcast series we have considered Monaco’s remarks from a variety of perspectives. Bethany Hengsbach considered this change in monitorships from the white-collar enforcement and defense perspective. Mikhail Reider Gordon looked at global aspects of the new DOJ monitor’s focus. Cristina Revelo discussed how E&C assessments help drive more compliant companies. Jesse Caplan brought his views on the intersection of the twin topics of antitrust and healthcare compliance. In this Episode 5, we conclude our series with AMI founder Vin DiCianni who looks at where monitors currently are and where monitorships are going in 2022 and beyond.
Highlights of this podcast include

  1. Why monitorships are an appropriate tool for both the DOJ and companies to utilize.
  2. Why now is the right time for the DOJ to refocus on the usefulness of monitors and monitorships.
  3. Why both monitor selection, and a monitor road map are critical to the success of a monitorship.

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Vin DiCianni
Affiliated Monitors Inc.

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Blog

Not Your Father’s Monitor – Vin DiCianni on Monitorships in 2022

In October, Deputy Attorney General (DAG) Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). Her remarks reframed a discussion about the uses of, reasons for and perceptions on independent monitors and monitorships. I asked Affiliated Monitors Inc. (AMI) founder Vin DiCianni for his thoughts around the remarks on monitors. He said, “For Affiliated Monitors this refreshed approach by DAG Monaco highlights the seriousness which businesses must place on the investment in their programs and in addressing what has for some been a negative experience with a monitor. For those who might be the subject of a monitorship, DAG Monaco recognized that the negativity that has sometimes surrounded monitorships as being punitive, should be seen in a different light bringing value, pointing a way forward and as a solution which has had great success in resolving matters.”
Monaco’s remarks should be studied by every compliance professional as they portend a very large change in the way the Department of Justice (DOJ) will utilize monitors going forward. Over this podcast series, sponsored by AMI, we have considered why DAG Monaco’s remarks herald a new era for monitorships from a variety of perspectives. Bethany Hengsbach discussed this change in monitorships from the white-collar enforcement and defense perspective. Mikhail Reider-Gordon looked at global aspects of the new DOJ monitor’s focus. Cristina Revelo discussed how ethics and compliance (E&C) assessments help drive more compliant companies. Jesse Caplan, Managing Director of Corporate Oversight, brought his views on the twin topics of antitrust and healthcare compliance. We conclude the series in Part 5, with AMI founder Vin DiCianni who takes a look down the road where monitorships are going in 2022 and beyond.
DiCianni heard a couple of different things in the Monaco Speech as they related to monitors. First, monitoring now has been around for quite some time. The DOJ used it historically with much greater frequency under prior administrations. DiCianni believes, “It works, so why not go back to a sanction that can help companies improve? And when you think about it, that’s what a monitorship is. It’s allowing the entity to stay in business, you know, to remain viable through, an independent monitor.” The Monaco Speech simply recognized the use of monitorships is a very good tool for DOJ to use.
Second, the Monaco Speech recognized companies are “perhaps becoming a little bit more lax about compliance, notwithstanding the DOJ guidance that has come out over the years.” DiCianni believes the Monaco Speech reinvigorated the point that companies need to go back and look at their compliance programs. Yet the reality is that it is sometimes hard for a company to make that type of dispassionate analysis. An independent monitor can assist in that process by looking at, for instance, your E&C program and controls around compliance.
Another key insight from the Monaco Speech was that going forward monitors would not be viewed as punitive, and they would not act as prosecutors. Here DiCianni noted, “I think the evolution of monitoring, and it’s an evolution and it’s continuing to evolve, has included consideration that the monitor is not simply an arm of the government.” He believes that the government saying to the monitor, “be a mentor, tell them how to fix them. You’ve seen it, compare it to other companies.” Once the settlement agreement is in place, “the whole notion is let’s fix this. I think that that’s crucial to this whole notion of how monitorships have evolved, because it’s no longer just, you know, a check the box. Are they doing this, doing that now it’s make recommendations on improvement and let’s see if the company make those changes.”
We considered the types of monitors and the types of skills a monitorship needs. It all begins with the settlement agreement, whether it is a Deferred Prosecution Agreement (DPA) or other form of resolution. A monitor must have the necessary skills to be able to look at things like business development, so they can understand how a company is going after business? Another growing area is in data analytics, as sometimes the monitorship is driven by data. This could require the monitor to have a data analytics team that can analyze test and look at data in various ways. Sometimes you do need forensic accounting. Sometimes you need an expert in healthcare when the monitorship is dealing with issues such as coding and billing. The AMI approach is to “shape each monitorship to make sure that we have a team that has the various perspectives, what would the government be looking for, but equally importantly how can this be helpful to the entity? Those are the most successful monitorships that we have engaged in. I think that having that broader perspective as you approach a monitorship is crucial.”
I concluded by asking DiCianni where he saw monitors going down the road. DiCianni believes that the use of monitors will increase, in many different areas such as different non-governmental groups and agencies, federal government agencies, state, and municipal agencies. For instance, AMI works with attorney inspector generals, the World Bank and other organizations. They will continue to be used as a tool, as more agencies that have never used them before are starting to recognize the benefits of them. He stated, “I think monitorships are going to continue to grow. The fear that I have is the bad monitoring, where the monitor that does not understand what they are doing and does not know what type of issues to look at or the kinds of things that they should be looking at. This will give everybody a bad name in terms of monitoring.” He concluded, “if you’re going to put a monitor in place to make sure that the selection of the monitor is appropriate. But I think it’s going to be a growing opportunity for both regulators and businesses.”
Affiliated Monitors
Vin DiCianni

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The Affiliated Monitors Expert Podcast

The Early Days of AMI


In this episode, I welcome back Vin DiCianni, Chief Executive Officer (CEO) and founder of AMI. We discuss the early days of AMI. DiCianni drew as inspiration for AMI, a number of special Commissions that were created by New York City to address improprieties by construction contractors in building public schools in New York City. Out of those Commissions arose the concept of Independent Private Sector Inspector General (IPSIG) and the model was to bring accounting, legal, and engineering skills into the oversight of construction contractors who were about to lose a contract because of some type of violation of the terms of the contract. This IPSIG model was used to provide oversight for these contractors so that the buildings needed could get built. However, this IPSIG model was very intrusive, with the monitor literally in the back pocket of the contractor reviewing accounting records, engineering drawing and contracts on an almost continuous basis. DiCianni envisioned a less intrusive, more collaborative model. Yet he noted it took time to convince all the relevant parties, the regulators, defense counsel and companies of the effectiveness of this approach. He said there were three key factors in this process.
They were (1) to convince the regulators that a truly independent monitor not only had advantages but would work; (2) many government agencies and state oversight boards did not want to put the licensed companies and persons out of business because the government and people in a state needed the services; and (3) economic pressures which caused cut-backs to funding and the regulators simply did not have the head count to fulfill the oversight role that an independent monitor can perform. DiCianni was able to answer these questions and others; all of which helped in the formation and growth of AMI.
For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit Affiliated Monitors at www.affiliatedmonitors.com.

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Compliance and Coronavirus

Vin DiCianni on Challenges in WFM and Ambassadors for Remote Operations


Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. As the Voice of Compliance, I wanted to start a podcast which will help to bring both clarity and sanity to the compliance practitioner and compliance profession during this worldwide health and healthcare crisis. In this episode, I am joined by Vin DiCianni, founder and CEO at Affiliated Monitors, Inc. We discuss challenges from isolation in this work from home environment and how compliance Ambassadors can facilitate and more fully operationalize compliance.
For more information on Affiliated Monitors, Inc. check out their website here.

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Compliance and Coronavirus

Vin DiCianni on Monitors Under Coronavirus Stimulus Package


Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. As the Voice of Compliance, I wanted to start a podcast which will help to bring both clarity and sanity to the compliance practitioner and compliance profession during this worldwide health and healthcare crisis. In this episode, I am joined by Vin DiCianni, founder and CEO of Affiliated Monitors. We discuss the need for proactive monitorships under the stimulus package and why compliance is even more important during this health crisis.

  • Why is this important for the government, from federal to state to cities to municipalities?
  • Why is this important for businesses seeking stimulus funding?
  • How compliance and ethics will be even more important going forward.
  • Why your organization should take a proactive approach now.
  • Problem companies and those ethically challenged in the past will continue to do so.

This podcast is sponsored by SAI Global. To learn how you can protect your business operations and workforce during these uncertain times, visit saiglobal.com/risk for free resources, expert guidance, and industry-leading technology.