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Assistant AG Benczkowski Announces That The DOJ Has Ditched The “Shortsighted” Compliance Counsel Position And Announces A New Corporate Monitor Policy

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In 2015 when the DOJ announced that it had retained a “compliance expert” to “provide expert guidance to Fraud Section prosecutors,” I called the move little more than a public relations move (see here for the prior post).

In mid-2017, the DOJ’s compliance counsel left her position and in doing so attempted to draw much attention to herself and her politics. (See here and here for prior posts).

This March 2018 post checked in with the DOJ regarding its compliance counsel vacancy and mum was the word from the DOJ. The prior post suggested that if the position was that important it would have been filed after nine months, but then again it never was that important but rather a public relations move.

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Stryker Joins The FCPA Repeat Offender Club

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The end of September is traditionally an active period for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year comes to a close.

On the heels of yesterday’s Petrobras enforcement action (see here and here for prior posts), the SEC announced a $7.8 million enforcement action against medical device company Stryker for not having internal accounting controls “sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait” and because “Stryker’s India subsidiary failed to maintain complete and accurate books and records.”

In doing so, Stryker joins the list of FCPA repeat offenders (see here). As highlighted in this prior post, in 2013 Stryker resolved a $13.2 million enforcement action based on alleged conduct in Mexico, Poland, Romania, Argentina, and Greece.

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On Measuring The Effectiveness Of A Compliance Program …

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A reader (a compliance professional at a large publicly traded company with operations around the world) asks:

“One of the things I am struggling with is how to measure the effectiveness of a compliance program.  I find it easy to measure activity, but the real value is in the avoidance of penalties and pre/post expenses, negative publicity, customer retention, share value reduction, etc.  A good compliance program for a global company is a significant and costly investment and one that is always being reviewed and squeezed as business cycles fluctuate.  The catch-22 is that the more effective the compliance program, the less issues that are identified, equaling more questions as to why we need such a significant investment.  The programs own success can be its biggest challenge. Thoughts on ideas on effective measurements of a compliance program?”

Set forth below are my thoughts on this difficult issue – difficult because of what legal authority (as well enforcement agency guidance) actually say vs. seemingly conflicting actual FCPA enforcement actions and enforcement agency double-speak.

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FCPA Flash – A Conversation With Becky Rohr (Former DOJ Principal Deputy Chief And Current VP At Hewlett Packard Enterprise) Regarding A Variety Of In-House Compliance Issues

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The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Becky Rohr (former Principal Deputy Chief in the DOJ’s Fraud Section and current Vice President at Hewlett Packard Enterprise where she leads a team handling anti-corruption compliance in the Ethics & Compliance Office). During the podcast, Rohr discusses: (i) the dynamics of post-enforcement action compliance and reporting obligations; (ii) the DOJ’s suggestion in the FCPA Corporate Enforcement Policy regarding appropriate retention of business records; and (iii) her different vantage points surrounding the FCPA given her prior DOJ experience and current corporate experience.

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… Because FCPA Enforcement Actions Often Involve “Normal” Activity

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This recent FCPA Blog post asks: “why do ‘normal’ employees violate the FCPA?”

Sure, there will always be Foreign Corrupt Practices Act violators like Richard Bistrong (an FCPA Blog contributor and a “training partner” of the FCPA Blog’s owner) who – in the words of the Africa Sting jury foreman – “freely admitted on the stand more illegal acts than the entire group of defendants was accused of, yet was able to plead to only one count of conspiracy to violate the FCPA.” Bistrong himself has stated: “When I am asked, ‘what could have stopped you? My response is quite simple: nothing.”

There is little compliance programs can do as to these sorts of actors. Nevertheless, let me raise my hand and offer a partial answer to the question posed by the FCPA Blog: “normal” employees may violate the FCPA because FCPA enforcement actions often involve “normal” activity.

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