Compliance Program Roundup: Key Elements of Internal Anti-Corruption Initiatives

“All too often, I hear complaints about compliance officers, general counsels, and outside counsels, who are the so-called ‘deal-killers’ or ‘doomsayers.’ The challenge within any organization is not to stop the work but to consult and advise on ways to meet the requirements of the law and figure out a way to make it work. It is easy to be ‘Dr. No.’ It is harder to say ‘That is a problem. How can we solve it? What can we do to make it work?’” (Mark Twain, Dr. No and Problem Solving by Michael Volkov) 

In today’s global economy, companies can no longer take a hands-off approach to fighting corruption, bribery and other unethical (and illegal) business activities. Instead, they need to create what FCPA lawyer Tom Fox calls a “culture of compliance” that provides context for successful internal efforts to end corruption. 

For your reference, here’s a roundup of recent legal commentary on key elements of internal compliance initiatives: 

Unofficial Messages-Creating a Culture of Compliance (Thomas Fox)

“It is important that senior management not only consistently drives home the message of doing business ethically but should communicate that message in a short, clear values statement. Lomer cites to Chris Bauer for the proposition that ‘If you have to think about it for more than three seconds to really know what it means, it fails the test.’ However, if the message does meet the three second test, it can drive down to become a part of the company’s DNA.” Read more»

The Art of Internal Investigations (Michael Volkov)

“When a company turns to an internal investigation, the board and senior management have to be careful – there are so many risks.  The internal investigation has to focus on an end result and a vision for how to get there.  Of course, you cannot plan out every possible twist and turn but like any investigation, counsel has to know where the investigation is headed and have a reasonable plan for how to accomplish the goal.  Along the way, new tactics may be needed.” Read more»

Ten Rules for Effective Internal Investigation Interviews (Matteson Ellis)

“Conducting interviews is a vital skill for internal FCPA investigators. After reviewing endless emails, technical memos and accounting ledgers, we almost always have to speak directly to someone in order to run potential FCPA violations to ground. Often, the primary objective of such interviews is to elicit as much information as possible about the underlying matter. Here are my ten rules for ensuring this happens.” Read more»

To Disclose or Not To Disclose: That is the Question (Michael Volkov)

“No one can doubt that the engine fueling DOJ’s record fine collections for FCPA violations is the voluntary disclosure process.  Company after company walks through the doors of the Justice Department, confesses their sins and then argues about the proper resolution.  But the voluntary disclosure process remains shrouded in mystery and some have suggested that they have been subjected to varying policies and results.  This is not a good development for the administration of justice.  The process requires effective and fair enforcement through the consistent application of policies and results.” Read more»

Related Commentary and Analysis

Prosecutorial Misconduct Stymies Department of Justice in FCPA Trials (Sheppard Mullin Richter & Hampton LLP)

“With its humbling conclusion, the Aguilar case underscores the evidentiary difficulties the Justice Department can face in bringing FCPA matters to trial. The message the sent to the department regarding prosecutorial misconduct cannot be overstated, particularly since the court dismissed the indictment with prejudice even without finding that the prosecutors’ actions were intentional.” Read more»

The Travel Act – The FCPA’s Red-Haired Stepchild (Sheppard Mullin Richter & Hampton LLP)

“With all the attention being paid to the Justice Department’s aggressive prosecution of the Foreign Corrupt Practices Act, companies might be tempted to celebrate if an internal investigation revealed that no bribes had been paid to foreign officials, even though there had been commercial bribes paid to non-government foreign business representatives… While the FCPA’s anti-bribery provisions may not apply, DOJ can still charge foreign commercial bribes under an alternative, non-FCPA theory.  Most prominent of these is the Travel Act, which DOJ has occasionally used to charge foreign bribes.” Read more»

Sixth Circuit Vacates White-Collar Conviction For Insufficient Evidence (Warner Norcross & Judd – White Collar)

“In an unusual move, the Sixth Circuit ordered that a Tennessee businessman’s conviction for bank fraud must be vacated.  Timothy Parkes has apparently spent more than two years in prison awaiting appeal.  The Sixth Circuit held that the jury convicted him with insufficient evidence of guilt beyond a reasonable doubt.  The Sixth Circuit also held that the Court improperly excluded motive evidence critical to the defense. Finally, the Sixth Circuit held that the federal prosecutor committed misconduct when it implied a falsehood on an excluded issue.  The Sixth Circuit … ordered that Mr. Parkes’ conviction be vacated, and that an acquittal be entered.” Read more»

The Danger of Congressional Oversight (Michael Volkov)

“Congressional oversight poses significant risks to businesses and individuals… Oversight is broadly defined as the review, monitoring and supervision of the implementation of public policy of the executive branch. Congressional power to conduct oversight is rarely circumscribed by the courts. The only rule is that there are no rules. The rules of evidence do not apply, common law privileges usually do not apply, and enforcement proceedings can result in contempt of Congress.” Read more»

IP Rights under the FCPA (Thomas Fox)

“IP rights by their nature are created by a government. Within this context, the authors note that there are several IP Red Flags which should be noted and followed up on if they appear. IP Red Flags include some of the following: a patent being allowed unusually quickly; an opposition to a trademark being granted before the entire process has been completed; and a foreign customs official robustly enforcing company A’s anti-counterfeiting agenda, while ignoring company B’s agenda. Compounding these Red Flags is the knowledge of the company, whether it is a US public or a private equity owner.” Read more»

Latest OFAC Designation Likely to Disrupt Licensed Transactions With Iran (Bryan Cave)

“… the Office of Foreign Assets Control added Bank Tejarat, Iran’s third-largest bank, to the Specially Designated Nationals List for providing assistance to other Iranian banks and entities sanctioned by OFAC for participating in proliferation activities relating to Iran’s nuclear weapon and missile programs… The designation is disruptive to existing licenses and supply chains, as Iranian customers of U.S. exporters and services providers must now identify and establish relationships with other Iranian banks to ensure payments will be processed.” Read more»

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