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Does Fear Motivate Compliance?

By on December 22, 2020 in Compliance
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One component of Foreign Corrupt Practices Act compliance so-called “best practices” is training. But what type of training best minimizes FCPA risk?

Consider two types of training: the first legalese, fear-based training and the second, spot the issues type of training.

As to the first type of training, what sort of participate reaction would result if the trainer begins with saying something along the following lines: “Today I will be talking about a U.S. law that makes it a crime to bribe foreign government officials to get business. Your failure to abide by this law could result in you going to jail.”

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Speaker Fees

By on November 18, 2020 in Compliance, Healthcare Providers As Foreign Officials, Medical Device Industry, Pharmaceutical Industry, Speaker Fees
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Numerous Foreign Corrupt Practices Act enforcement actions have involved the enforcement theory that various foreign health care professionals (HCP’s) are “foreign officials” and thus occupy a status similar to a President, Prime Minister, or other traditional bona fide government official.

Several of these enforcement actions have included allegations that HCP’s received speaker fees or honoraria from pharmaceutical or medical device companies.

For instance, the Sanofi enforcement action included allegations that an HCP was provided “with consulting, speaking, and clinical trial fees over a period of years despite the lack of documentation or other support to demonstrate the services had been provided.”

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Potpourri

By on November 17, 2020 in Canada, Compliance, Damodar Arapakota, Greens, IMEX Systems, Och-Ziff Capital, Och-Ziff Capital Management, Siriwan, Victims
Potpourri

[To the best of my recollection, my first introduction to the word “potpourri” was in watching Jeopardy which I was very fond of as a teenager and young adult. Rest in peace Alex Trebek]

Lingo

Daniel Kahn (Acting Chief of the DOJ Fraud Section) was the guest on this recent episode of the Compliance Perspectives Podcast. During the podcast, Kahn talks about COVID’s impact on DOJ enforcement and certain recent enforcement actions such as Goldman Sachs and Beam.

In terms of the DOJ’s mid-2000 revision to its “Evaluation of Corporate Compliance Programs” policy document, Kahn stated that it certainly is by no means a “game changer.” Call me old-fashioned, but I want to hear the DOJ Fraud Section Chief talk about the law and legal requirements not lingo. Yet, the podcast dishes up plenty of lingo (tone at the top, conduct at the top, tone of upper and middle management, empowering compliance, walking the walk, direct line to the board, dotted line to the board, etc.).

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The FCPA Doesn’t Answer Many Of The Questions Compliance Professionals Have

By on November 13, 2020 in Compliance, Internal Controls
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Naturally, and understandably, those tasked with Foreign Corrupt Practices Act compliance within a business organization want clear answers to many questions.

However, the FCPA rarely provides clear answers and this is particularly true with the internal controls provisions.

The provisions are not rule-based, but principle-based in the sense that the key statutory language is that issuers  shall “devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances” certain financial objectives are met. The FCPA then defines  “reasonable assurances” to mean “such level of detail and degree of assurance as would satisfy prudent officials in the conduct of their own affairs.”

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Goldman – What Should Happen When Compliance Is Decent (And Often Good), But Not Great?

By on October 27, 2020 in Compliance, Goldman Sachs, Internal Controls
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The recent Foreign Corrupt Practices Act enforcement action against Goldman Sachs was the largest in FCPA history in terms of actual settlement amount ($1.66 billion).

Yes, the conduct at issue involved large bribe payments (according to the DOJ approximately $1.6 billion). Yes, the conduct at issue resulted in (according to the DOJ) Goldman obtaining “in excess of $600 million in fees and revenue across its divisions, and increased Goldman’s stature in SE Asia.” Yes, the conduct of the culpable Goldman employees criminally charged (Tim Leissner and Roger Ng) was egregious.

Viewed through the strict lens of respondeant superior, perhaps the record-setting FCPA enforcement action was justified. In this regard, the Goldman press release nicely stated in plain English: “We all share in the benefits when our colleagues perform well for our clients. The opposite must be true as well.  When a colleague knowingly violates a firm policy, or much worse, the law, we – as a firm – have to accept responsibility and recognize the broader failure that individual behavior represents for our firm.”

However, based on the DOJ’s (and SEC’s) allegations, the Goldman enforcement action was much different than certain other top ten FCPA enforcement actions.

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