We take things a different way in this episode as the commentators throw out five topics for consideration by the group. Last week we had topics from Jay and Matt; this week from Jonathan and Tom. 

Topics from Jonathan:

1. The right to be forgotten in the EU;

2. Big data and compliance-the EU regulators wrap anti-trust issues into data privacy;

3. A wrap up for the 6 years since the Bribery Act came into existence; and

4. The troubling inclination of UK regulators to engage in burden shifting in anti-bribery cases.

Topics from Tom:

1. In view of Trump’s abysmal performance at the G-20, will other countries ramp up anti-corruption enforcement?

2. Will the new book by Jesse Eisinger The Chickenshit Club make any difference? 

3. Three months ago the SFO appeared to be in trouble. Now it is leading the anti-corruption charge. Tying into Q1 above, will we see more aggressive enforcement out of the UK?

4. Now that compliance has become inculcated into the business process of most energy companies, with the attendant benefits, will there a pull back on the business side of things. 

5. Can a new comer really win the AL? What does the panel see in the second half of the season?

The top commentators in compliance are back for another episode of Everything Compliance.

In this episode, Matt Kelly and I take a deep dive into the Dodd-Frank and Sarbanes-Oxley reform initiatives in the House of Representatives and as articulated by incoming SEC Chairman Jay Clayton. Will the new administration gut SOX and Dodd-Frank compliance requirements?For more see Matt Kelly's blog post SEC Chair Clayton Talks Compliance Costs.

In this episode I visit with James Koukios, a partner at Morrison and Foerster on the firm’s newsletter, Top Ten International Anti-Corruption Developments for May 2017. Our topics include: 

1. FCPA Assistant Chief BJ Stieglitz has been selected for detail to UK Financial Enforcement Authorities. We discuss how does a prosecutor work overseas, what this might mean for prosecutions going forward both in the US and UK and what is the relationship of the DOJ with its British counterparts?
2. The DOJ has moved to terminate its DPA over Hewlett-Packard. We discuss what it means to have a DPA terminated and what is the role of the DOJ in this phase? We also consider what is the decision-making process if a DPA has to be extended due to continued or new conduct by a company under such an agreement.
3. Finally, we consider some of the difficulties of some of the DOJ’s Challenges in Obtaining Foreign Evidence, through a recent ruling in Civil Forfeiture Case. On May 9, 2017, In the case of United States v. Prevezon Holdings Ltd., Southern District of New York Judge William H. Pauley III, ruled that certain evidence obtained by prosecutors from foreign sources was admissible in a civil asset forfeiture case, notwithstanding that the documents lacked the requisite certifications under the Federal Rules of Evidence. We consider the process for getting information from overseas; why it takes so long, what happens if it does not meet US evidentiary or even admissibility standards? 

To see a full copy of the firm’s publication, Top Ten International Anti-Corruption Developments for May 2017, click here.

This week, Jay and I return for a wide-ranging discussion on some of the week’s top compliance and ethics related stories, including: 

1. Will Canada approve DPAs for use in anti-corruption prosecutions? TI-Canada recommends they come into use. See article in Corporate Compliance by clicking here. Also see interview with RCMP Superintendent Denis Desnoyers in GIR.
2. Midyear FCPA enforcement report by Stanford Law Journal. See article in WSJ.
3. The first half of 2017 has brought the final resolutions of only two FCPA matters from the new administration, but they were both declinations. Both declinations have significantly strengthened the FCPA Pilot Program as a clear path forward for every company that finds itself in FCPA hot water. See Tom’s article in Compliance Week.
4. Are Mexican anti-corruption efforts moving forward or not. See pro see article entitled, New Mexican Anti-Corruption Law Enters into Force Global Compliance News. For con see article by Juan Montes Mexican Antigraft Efforts Falter, in WSJ.
5. With the departure of Walter Shaub from the US Office of Governmental Ethics and Hui Chen as the Compliance Counsel, who will lead the US ethics and compliance efforts. See Jaclyn Jaeger’s article in the Compliance Week.
6. Everything Compliance-Episode 14 is out. Topics include Walter Shaub’s departure from OGE and does it even matter? Jesse Eisinger’s book The Chickenshit Club; the SFO, UK Bribery Act and the Rolls-Royce enforcement action; differences in DPA practice in the US & UK; Trump Administration & FCPA enforcement; EU’s GDPR; and Hui Chen’s departure from Justice Department; both her public rebuke of Trump, and the substance of how she believes her guidance has been mis-interpreted. Episode 15 will go up on July 27.
7. Former Haitian Telco exec pleads guilty, Dick Cassin reports in the FCPA Blog. Dmitrij Harder jailed five years for FCPA offenses. See article by Dick Cassin the FCPA Blog.
8. The twins are back home from summer camp. What does it mean for the Rosen household?
9. Jay previews his weekend report.

Show Notes for Everything Compliance-Episode 14

Topics from Matt:

1. Trump Administration & FCPA enforcement— we have two declinations now; maybe a compare-and-contrast, and speculation on what a tough Trump Admin enforcement WOULD look like;

2. EU’s GDPR— Do EU regulators really know what they want to do with enforcement of this law; although if they follow the lead of the anti-competition people whacking Google, it could be a big deal; 

3. Hui Chen’s departure from Justice Department; both her public rebuke of Trump, and the substance of how she believes her guidance has been mis-interpreted; and

4. Ethical leadership and the lack thereof; the menace of abusing perks and privilege, connecting my posts about Uber’s leaders and Chris Christie vacationing on a closed beach.

Topics from Jay:

1. How do the Campaign Finance Laws mirror/or differ from the FCPA?

2. Will the Russian Collusion Investigation reveal the ultimate FCPA violation?

3. Regarding Walter Shaub’s departure from Office of Governmental Ethics (OGE), does it matter? What is OGE supposed to do and why did it work for the past 40+ years, but fell on deaf ears with the Trump administration?

4. Dovetailing with Matt’s question about a slow H1 for FCPA enforcement and in light of the just released Gibson Dunn FCPA Mid-Year Report, does the current climate (and lack of vigorous enforcement) provide a perfect storm for companies to look the other way if they fall off the E&C wagon, or do we think that companies are still being vigilant in spite of a perception of decreased enforcement?

Rants are at the end of this week’s episode.

In this episode, Matt Kelly and I discuss the recent Second Circuit Court of Appeals decision in HSBC v. Moore. In this case a federal district court had ordered the release of redacted monitor’s report in the HSBC money-laundering Deferred Prosecution Agreement (DPA), based upon the request of an interested citizen. Both the Department of Justice (DOJ) and HSBC appealed the order and the Court of Appeals supported their position in overturning the trial court’s decision. The case is about a hook, line and sinker overturning of any trial court jurisdiction as one can have. The district court tried to claim it did not have the same role as a “potted plant” but the Court of Appeals left no doubt that is the only role it sees for any district court where a DPA is filed. We discuss the implications for the compliance practitioner, FCPA enforcement and any potential changes going forward. 

For additional reading, see my blog post on this case by clicking here.

This week, Jay and I return for a wide-ranging discussion on some of the week’s top compliance and ethics related stories, including:

1. HSBC monitor report protected from release. See article in Reuters by clicking here.
2. The Odebrecht scandal continues to resonate across South America. See Dick Cassin’s post in the FCPA Blog.
3. The first half of 2017 has brought the final resolutions of only two FCPA matters from the new administration, but they were both declinations. Both declinations have significantly strengthened the FCPA Pilot Program as a clear path forward for every company that finds itself in FCPA hot water. See Tom’s article in Compliance Week.
4. Roy Snell says it’s not who’s who but who gets it. See article in SCCE Compliance and Ethics Blog.
5. Tom announces the rollout of the Compliance Podcast Network. It includes This Week in FCPA, FCPA Compliance Report, Compliance Report-International Edition, 12 O’Clock High, Unfair and Unbalanced, Compliance into the Weeds, Across the Board, Everything Compliance, One Month to a More Effective Compliance Program. See Tom’s article in the FCPA Compliance and Ethics Blog.
6. The next Everything Compliance podcast is in production. Topics include Walter Shaub’s departure from OGE and does it even matter? Jesse Eisinger’s book The Chickenshit Club; the SFO, UK Bribery Act and the Rolls-Royce enforcement action; differences in DPA practice in the US & UK; Trump Administration & FCPA enforcement; EU’s GDPR; and Hui Chen’s departure from Justice Department; both her public rebuke of Trump, and the substance of how she believes her guidance has been mis-interpreted. Part I will go up on Thursday, July 20.

In this episode, Matt Kelly and I take a deep dive into the 4th of July weekend use of the New Jersey beaches by Governor Chris Christie. Governor Christie had closed the beaches in a budget dispute but was still able, as Governor, to give himself and his family full access to the now wide open beaches on the recently passes holiday weekend. We consider Governor Christie’s example of undeserved privilege in the context of ethical leadership and tone at the top. Matt draws upon his Catholic school education to remind us that undeserved privilege is private law, as “privilege” comes from the Latin privus, private law; and lex, law. It’s a private law that benefits only one person, who doesn’t deserve it. 

Read more about the issue and Matt’s thoughts on his blog post Tone at the Top Gone Wrong: The Christie Example.

This week, Jay and I return for a wide-ranging discussion on some of the week’s top compliance related stories, including: 

1. U.S. charges top Colombia anti-graft prosecutor with money laundering. See article by Dick Cassin the FCPA Blog.
2. US Supreme Court may finally settle one of the fiercest debates arising from the Dodd-Frank Act: What is a whistleblower and when are they protected against corporate retaliation? See Joe Mont’s article in Compliance Week.
3. Alstom obtains ISO 37001 certification but does it mean anything?
4. Benefits of FCPA Pilot Program becoming clear after two 2017 declination. See article by Jaclyn Jaeger in Compliance Week.
5. Head of federal government ethics office to step down. See article in The Hill.
6. At nearly the half-way mark, the Astros lead the majors with the best record. See Tom’s article on how and why in the FCPA Compliance Report.
7. New eBook on Trump and Compliance: the First 100 Days is out. It collects the musings from the four amigos on the Everything Compliance podcast (+1). You can download your copy by clicking here.

In this week which starts the 4th of July holiday weekend, Jay and I return for a wide-ranging discussion on some of the week’s top compliance related stories, including: 

1. The second Declination of the Session’s Justice Department, CDM Smith. For a copy of the Declination click here. For article in the FCPA Blog, click here. 
2. The son of Equatorial Guinea's president went on trial this week in France for embezzlement of funds from the country. See trial reports of Days 2 & 3 in the Global Anti-Corruption Blog.
3. Is the DOJ afraid to go to trial in white collar prosecutions. Jesse Eisinger considers this issue in his new book The Chickenshit Club. See review of Eisinger’s book in the Financial Times by clicking here.  
4. Tom nominates former Uber engineer Susan Fowler for top blog of the year (so far). Who is your nominee from the first half of the year? See Tom’s article in the FCPA Blog. 
5. Hui Chen talks to Matt Kelly on a podcast on Radical Compliance.
6. Jay discusses his weekend report, which came out yesterday. You can read by clicking here.
7. At nearly the half-way mark, the Astros lead the majors with the best record.
8. Tom announces the premier of the Compliance Podcast Network, which will make its debut the week of July 10. It will be the only Podcasting Network dedicated to compliance, the compliance profession and compliance practitioners.

The top compliance roundtable podcast is back with a wealth of new topics. Stayed tuned to the end where there are some heartfelt and somber rants in this edition. 

1. Matt Kelly opens with a discussion on Uber from the policies and procedures framework. Matt rants on the danger of overly legalistic approaches to compliance. 

For Matt Kelly’s posts on Uber and the intersection of policies and procedures, see the following:

What Uber Teaches About Culture & Policy Management

Car Crash Governance at Uber

2. Mike Volkov considers blockchain and how it will impact compliance going forward. 

For Mike Volkov’s post on blockchain and compliance, see the following: 

Blockchain and the Future of Compliance 

For reading on blockchain and compliance, see the following:

Will Blockchain Transform Compliance? by Tom Fox

How Blockchain Will Change Organizations, by Don Tapscott and Alex Tapscott in MIT Sloan Business Review.

Blockchain Explained, by Zach Church in MIT Sloan Management Review. 

3. Jonathan Armstrong considers the trend of fake news and mis-information around GDPR. Jonathan most somberly rants on the Grenfell towers disaster. 

For the Cordery Compliance client alert see the following: 

GDPR ‘Fake News’ 

4. Jay Rosen brings a detailed discussion FCPA sabermetrics in the context of of the dearth of FCPA cases brought forward under the Trump Administration and Session Justice Department. He considers the numbers, the continuing departures of numerous Justice Department career employees and new political appointees as well. Jay rants on breaking news. 

For Jay Rosen’s posts see the following:

The members of the Everything Compliance panel include:

• Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
• Mike Volkov – One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
• Matt Kelly – Founder and CEO of Radical Compliance, is the former Editor of Compliance Week. Kelly can be reached at mkelly@radicalcompliance.com
• Jonathan Armstrong – Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

In this episode, Matt Kelly and I take a deep dive, literally into the weeds of the convergence of the compliance profession and the nascent cannabis industry. While several states have made pot for medical use legal and one state, Colorado has made it legal for personal consumption, it is still illegal under federal law. We consider such questions as:

• Lawyers and accountants are required to report large cash transactions to the federal government—but large cash transactions are common in the cannabis industry, since commercial operators don’t have easy access to the banking system. So if you report one of these transactions, are you turning over evidence of illegal activities of your client to authorities? Or do you not report, and risk sanctions against yourself?
• If the Justice Department does act against a commercial weed business, will prosecutors really seek to impanel a federal grand jury, with jurors drawn from a state where they voted to legalize? Could prosecutors ask a candidate juror whether he or she smokes weed? Could that juror invoke the Fifth Amendment?
• Should lawyers be allowed to own equity in a legally operating marijuana business? What about judges? Do the two groups need different standards? 
• Professional conduct rules for lawyers require competency in rendering legal advice. What does competency even look like in this branch of business conduct, when the laws are so new and in conflict with federal law?
• Will the nascence of the cannabis industry allow for innovations such as incorporation of blockchain to create fully auditable trails for all aspects of the business?
• Will any state which taxes cannabis sales be required to remit this money under a theory of profit disgorgement from funds generated by illegal activity.

For more from Matt Kelly:

See his blog post Compliance, Careers and Cannabis Industry;

Hear Matt Kelly’s interview with Amy McDougal (yes Matt has his own podcast as well-the Radical Compliance podcast) by clicking here.

After last week’s guest announcers, Jay and I return for a wide-ranging discussion on some of the week’s top compliance related stories, including: 

1. The first Declination of the Session’s Justice Department, Linde gas. For a copy of the Declination click here. For Tom’s discussion of the lessons learned, click here. 
2. The son of Equatorial Guinea's president went on trial this week in France for embezzlement of funds from the country. See article by Dick Cassin in the FCPA Blog. See Day 1 of trial report in the Global Anti-Corruption Blog.
3. The UK SFO charges four former senior executives at Barclays Bank criminally around funding issues in the 2008 financial crisis. See Tom’s article by clicking here.  
4. Embattled Uber CEO Travis Kalanick resigns under pressure. Will there be a backlash, who will run the company? See articles in the New York Times and Wall Street Journal. 
5. Compliance in the 21stcentury, welcome to ComTech. See Tom’s article in Compliance Week. 
6. Hui Chen departs the Justice Department with a flurry of tweets. Matt Kelly reports on Radical Compliance.
7. Jay previews his weekend report.
8. Everything Compliance-Episode 13 is in production and will be released next Thursday. Topics include Matt Kelly on Uber and the need for policies and procedures, Jonathan Armstrong on fake news around GDPR, Mike Volkov on blockchain and how it may change compliance, and Jay Rosen, Linde notwithstanding, on the dearth of recent DOJ FCPA activity. For a sneak peak, listen to Matt Kelly’s rant at the end of this podcast.

On June 16, 2017, the Department of Justice (DOJ) issued a Declination to Linde North American Inc. and Linde Gas North America LLC (collectively “Linde”). This is the first Declination issued by the DOJ in the era of the Trump Administration. For that reason alone, it was instructive and should be studied by the compliance profession. However, the case presented several interesting factors which merit consideration so we are discussing in depth to present lessons to be learned for the Chief Compliance Officer (CCO) or compliance practitioner. 

The Bribery Scheme 

Linde acquired Spectra Gases, Inc. (Spectra Gases) in October 2006. In November 2006, it purchased certain assets from the National High Technology Center (NHTC) of the Republic of Georgia. One of the keys to this purchase was a piece of equipment called the ““boron column,” which were used to produce boron gas.” Sales of boron gas after the acquisition helped fund the purchase price and payout to Spectra executives who stayed on after Linde purchased Spectra Gases. 

Unfortunately, the three Spectra executives who stayed on were in cahoots with corrupt offices from the NHTC who made the sales agreement with Linde. Part of the Earn-Out by the former Spectra (now Linde) officials was paid to these corrupt government officials, both directly and through certain third parties. But the funding scheme to pay the bribes was quite creative and demonstrates once again to the compliance practitioner the myriad ways in which funds can be generated to pay bribes. 

For reasons not made clear, Linde did not purchase the boron column outright but allowed the former Spectra executives and the corrupt NHTC officials to form two new entities to own and operate the boron column, Spectra Investors LLC (Spectra Investors) and Spectra Gases Georgia, which was wholly owned by Spectra Investors. Spectra Investors was owned 51% by the corrupt NHT officials and 49% by the Spectra Gases executives who now worked for Linde. Spectra Gases Georgia was formed as a separate management company, by the NHTC officials, which was claimed to provide services to Spectra Investors for which it would receive recompense. Of course, there was no evidence of services being delivered under this arrangement as it was simply a mechanism to funnel monies to the corrupt officials. 

As a result of the ownership structure of Spectra Investors, with 51% being owned by corrupt NHTC officials and the management services contract, the corrupt NHTC officials received “approximately 75% of the profits generated by the boron column” while Spectra Gases received 25% of the profits. Clearly even with bribery and corruption, it was a bad business deal. In January 2010, Linde dissolved Spectra Gases and became its successor-in-interest and at some point later discovered the illegal conduct. Prior to the time of the dissolution, Spectra Gases had “received approximately $6,390,000”. After Linde became the direct owner, it “received approximately $1,430,000 as a result of the corrupt” actions. 

The Declination 

While there is a dearth of fact about how the matter came to the attention of Linde and when it disclosed the matter to the DOJ, the decision to decline to prosecute was based on the following factors: (1) Linde’s timely self-disclosure; (2) a “thorough, comprehensive and proactive investigation” [emphasis supplied]; (3) Linde’s full cooperation and meeting the Yates Memo requirement for disclosing all known relevant facts about the “individuals involved in or responsible for the misconduct”; (4) full profit disgorgement; (5) Linde’s enhancement of its compliance program and internal controls; and (6) Linde’s full remediation, including termination or discipline of the three Spectra executives and lower-level employees involved in the misconduct; termination of the fraudulent management contract between the corrupt NHTC officials and Spectra Investors and termination of the Earn-Out payment due to the former Spectra executives who became Linde employees. The company also made the following payments. 

 Lessons Learned 

This was yet another Foreign Corrupt Practices Act (FCPA) action where a company performed insufficient due diligence in the acquisition phase. The timing of the Linde purchase of Spectra Gases and Spectra Gases’ purchase of the income producing assets is too close in time to be a coincidence. It would certainly appear that Linde purchased Spectra Gases to facilitate its acquisition of the boron column and other assets. If your company is going to make such a multi-step acquisition, you must perform due diligence on all the actors and the assets involved. 

The Byzantine corporate structure created for the ownership of the boron column, its operation and management contract are clear red flags that any CCO should sniff out immediately. While I am sure the internal corporate excuse for this clear ruse was the ubiquitous ‘tax considerations’; every such transaction should be reviewed by compliance as well. Anytime there is more than one entity to accomplish one task, there is the possibility of fraud present. Further, it is not clear how Linde could not have been aware of the ownership interests of a company which it ultimately controlled. It would seem that the company did not even make any inquiry. 

Even in 2006, the Republic of Georgia’s reputation for bribery and corruption was quite high. The 2006 Transparency International-Corrupt Perceptions Index (TI-CPI) listed Georgia at 99 out of 176 countries listed so that alone warranted red flag scrutiny. If you are purchasing an entity in a country with such well known affinity for corruption, extra care is warranted. Perhaps back in 2006, Linde did not view the FCPA as something which it would deal with in such a situation. 

Yet even with all the apparent miss-steps and non-steps of compliance, the company was able to secure a declination from the DOJ. While there may be some additional penalties or sanctions by the Securities and Exchange Commission (SEC) for the failures of internal controls, the result obtained by Linde was certainly a superior result. The company would seem to have met the four pillars under the FCPA Pilot Program through (a) self-disclosure, (b) extraordinary cooperation, (3) full remediation, and (d) profit disgorgement. Interestingly, the profit disgorgement in this case would appear to have been beyond the five year of limitations for profit disgorgement under the recent Supreme Court decision in Kokesh. If there is a FCPA enforcement action brought by the SEC perhaps additional facts will be recited in any resolution documents. 

Nevertheless, kudos are due to Linde and its counsel for obtaining this declination. Every CCO should study it for both the superior result received and underlying facts to see if you face anything similar in the Republic of Georgia or elsewhere.

For a full copy of the Linde Declination, click here. 

In this episode, James Koukios, a partner at Morrison & Foerster returns to discuss the firm's newsletter Top Ten International Anti-Corruption Developments for April 2017. In this episode we highlight the three following matters for discussion and what lessons can be garnered from them.  

World Bank Veteran to Change Positions.The World Bank announced that Pascale Helene Dubois would become the new head of the World Bank Group’s Integrity Vice Presidency, known as INT. The INT is an independent unit within the World Bank Group that investigates and pursues sanctions related to allegations of fraud and corruption in World Bank Group‑financed projects. Dubois is well known in the anti-corruption community and has long been a thought leader in this space. In her current post, she has worked to increase transparency and due process at the World Bank generally and in the Office of Suspension and Debarment specifically. Koukios relates how Dubois’s work and that of INT has helped foster greater cooperation between the World Bank and law enforcement agencies around the world.

Engineering Firm and Its Executive Debarred by World Bank for Bribery in Southeast Asia.

In April the World Bank Group announced the debarment of Denmark-based Consia Consultants ApS and its managing director. According to the World Bank, INT’s investigation revealed evidence that the company made payments to officials to influence contract awards in connection with the World Bank-financed Strategic Road Infrastructure Project in Indonesia. The World Bank stated that the company further failed to disclose its agreement and commissions paid to its agent in connection with the project and misrepresented the availability of key staff it has claimed would be assisting with the execution of its technical assistance contract under the project. The World Bank also said it found evidence that the company made corrupt payments in Vietnam in connection with the Hanoi Urban Transport Development Project, in addition to fraudulent misconduct relating to the Second Northern Mountain Poverty Reduction Project. The World Bank debarred the company for 14 years and its managing director for 3.5 years.

Former Diplomat Pleads Guilty to FCPA Charges in United Nations Bribery Case, While Judge Denies Motion to Dismiss FCPA Charges against Another Defendant.

On April 28, 2017, Francis Lorenzo, a former deputy ambassador from the Dominican Republic, pleaded guilty in the Southern District of New York to conspiring to violate the FCPA and to pay and receive bribes and gratuities in a bribery scheme allegedly involving Ng Lap Seng, a Chinese national and real estate developer accused of bribing former U.N. General Assembly President John Ashe. Lorenzo pleaded guilty to related charges in 2016 and is expected to testify against Seng at trial, currently set to begin May 30, 2017. Two days before Lorenzo’s guilty plea, on April 26, 2017, Southern District of New York Judge Vernon S. Broderick denied Seng’s motion to dismiss FCPA and related charges against him, finding that the superseding indictment sufficiently presented the essential facts underlying the charges and that the prosecution had made sufficient disclosures concerning the nature of the charged offenses by other means, including through the various complaints filed in the case, extensive discovery, agent affidavits, and a written response to Seng’s letter request for a bill of particulars.

To read a full copy of the firm's newsletter, click here. 

In this episode, I visit with Roy Snell about his recent announcement that he is stepping down as head of the SCCE. We review the current state of the SCCE and how the Roy has seen the compliance evolve from its start after the 1992 US Sentencing Guidelines. We discuss where Roy sees compliance going in the next several years and where the SCCE may go to support the profession. 

This announcement comes when the SCCE has grown to 50 staff members and one of the has one of the strongest boards in the professional association world. the SCCE has a strong footprint in the US and is a material player internationally with 17,500 members in 95 countries. It has a great reputation and its success to date has been quite remarkable. 

The call for applications will close on August 20th 2017.  A detailed job description and position summary are available at http://www.corporatecompliance.org/CEO.  SCCE plans to complete the interview and selection process in the Fall of 2017 and onboard a Deputy CEO in early 2018. The Deputy CEO will likely assume the role of the CEO sometime in 2019. Roy will stay on with the organization for roughly one year to work on special projects. To be considered for the CEO of SCCE and HCCA, please fill out the questionnaire with return instructions available at: http://www.corporatecompliance.org/CEO.

This week, as their tribute to their Dad, we are guest hosted by Jay’s daughters, Millie and Michela. They lead us through a wide-ranging discussion on some of the week’s top compliance related stories, including:

1. The Covington and Burling report on corporate culture at Uber. For what it means to the compliance practitioner, see Tom’s piece in the FCPA Compliance & Ethics Blog. For another view on the car crash of corporate governance at Uber, see Matt Kelly’s piece in Radical Compliance. Finally for an article the on investor who took on both Uber and Silicon Valley for similar issues, see this article on NPR.
2. Swiss banker, Jorge Luis Arzuaga pleads guilty to laundering money for FIFA officials. See article by Dick Cassin in the FCPA Blog.
3. DOJ files civil forfeiture complaints Thursday against an additional $540 million in assets allegedly bought with money looted from a Malaysian sovereign wealth fund, 1MDB. See article in the WSJ by clicking here.
4. Adnan Khashoggi, the Saudi arms dealer in the middle of the giant 1970s bribery scandal that led to enactment of the FCPA died this past week. See article by Dick Cassin in the FCPA Blog.
5. CCOs still struggle with outdated technology, siloed data. See article by Aarti Maharaja in the FCPA Blog. See Ethisphere-Convercent Report, by clicking here.
6. Brazilian prosecutor-turned-lawyer under ethics investigation following J&F settlement. See article by Michael Griffiths in GIR by clicking here (sub req’d)
7. Jay previews his weekend report.
8. Tom continues to talk about the release of his new book 2016 – The Year in Corporate FCPA Enforcement. For more information and to purchase, click here.
9. Happy Father’s Day to all you dads out there.

In this episode, I visit with Lauren Briggerman, a member at the firm of Miller & Chevalier. She discusses the latest edition of the firm newsletter, Executives at Risk: Navigating Individual Exposure in Government Investigations-Spring 2017. We discuss several recent developments in significant government investigations which highlight the tactics prosecutors are deploying and the risks faced by corporate executives: 

• German authorities raided an outside law firm retained by Volkswagen's supervisory board in the emissions investigation, as well as the offices of the company's Audi division. 
• U.S. agents conducted a multi-agency raid of three Caterpillar Inc. offices in Illinois related to the company's effort to shift billions in profit from the U.S. to a Swiss affiliate to secure a favorable tax rate.  
• The founding partners of the law firm at the center of the Panama Papers scandal were arrested by Panamanian authorities on money laundering charges related to Brazil's ongoing "Operation Carwash" corruption investigation.
• The DOJ's Antitrust Division raided the domestic shipping container industry's trade association and issued subpoenas to numerous companies in the industry.  

In this episode I visit with Luciana Silveira, a PhD candidate who is studying the FCPA and how it is has affected international trade flows. Some of the questions she is considering include the following: Was US business abroad affected? Did US companies decide to change their foreign business strategy because of the FCPA? After so many years of the law, what is the private sector overall opinion about the FCPA?

Silveira believes the answers to these questions  are neither straightforward nor simple. To that end, the PhD research she is developing will hopefully provide us with some new and updated answers, as well shed more light to the impacts of the FCPA to US international trade. Equally importantly, she is using the FCPA as reference to my studies on potential impacts of the Clean Company Act, a similar anticorruption legislation that came into force in Brazil in January 2014. To complement a quantitative analysis regarding merchandise trade flows, she is using a 15-questions survey (available at https://ldosilveira.typeform.com/to/uhtKYZ). It is confidential, and there is no question that requires strategic corporate information. She hopes that you will participate as all input is welcome and encouraged.

In this episode, Matt Kelly and I take a deep dive into the corporate governance fiasco which is Uber. We consider the revelations in the failures of corporate governance, culture and internal controls at the organization. The company provides a fascinating study of what happens when a tech start up raised in the fraternity culture is successful and how changes are required for it to act like a multi-billion organization. Both Matt and I have written on Uber. Our podcast comes out the same day the Holder Report to the Uber Board was released so we weave in the recommendations from Covington & Burling as well. 

For more on Uber see the following: 

Matt Kelly’s piece Car Crash Governance at Uber

Tom Fox’s pieces on Uber

 Will Culture Change at Uber Before its Too Late

CEOs and Win at All Costs-Where Does it Lead

Uber and Corporate Culture

For a copy of the Holder Report on corporate governance, cultural and internal controls failures at Uber and recommendations, click here.

Today I am joined again by Professor Samuel Buell, from Duke University School of Law to discuss a recent paper he co-authored with Rachel Brewster entitled, "The Market for Global AntiCorruption Enforcement". In the paper and in this podcast Professor Buell discusses the internal structural changes which took place in the 1980s and 1990s which set the stage for the explosive growth in FCPA enforcement. He then relates the changes on the domestic scene which facilitated its explosive growth. He ends by exposing the myth of the revolving door. 

Show Notes for Episode 56, for the week ending June 9, the Who’s On First Edition 

This week, Jay and I have a wide-ranging discussion on some of the week’s top compliance related stories. We discuss: 

1. The Kokesh case at the US Supreme Court is significant for SEC enforcement of the FCPA around profit disgorgement. For what it means to the compliance practitioner, see Tom’s piece in the FCPA Compliance & Ethics Blog. For a legal review of the decision, see Miller & Chevalier client alert authored by Saskia Zandieh. Marc Bohn considered the cased in the FCPA Blog. Marc and I discuss the case on the FCPA Compliance Report, Episode 332.
2. Trevor McFadden to leave the DOJ for federal bench. See article by Matt Kelly in Radical Compliance. Hui Chen’s contract not to be renewed, her position is posted for job applicants. Apply for the position here. Andrew Weissman leaves as head of the Fraud Section to go Special Prosecutor’s staff.
3. Former PetroTiger General Counsel Gregory Weismann is banned from SEC practice. See article in the FCPA Blog. 
4. Matthew Stephenson considers what a Wal-Mart settlement might look like. See his article in the Global Anti-Corruption Blog.
5. The federal judge who sentenced Samuel Mebiame, the bag man for Och-Ziff; criticized the DOJ for its lack of prosecution of any individuals from the company. See article by Sam Rubenfeld in WSJ Risk and Compliance Report.
6. Jay previews his weekend report.
7. Tom continues to talk about the release of his new book 2016 – The Year in Corporate FCPA Enforcement. For more information and to purchase, click here.

 Jay Rosen can be reached:

 Mobile (310) 729-6746

Toll Free (866)-201-0903

JRosen@affiliatedmonitors.com

 Tom Fox can be reached:

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       Email: tfox@tfoxlaw.com

In the case of Kokesh v. SEC, the US Supreme Court held the profit disgorgements operate as a penalty under the Securities and Exchange Act of 1934, as amended. As such “any claim for disgorgement in an SEC enforcement action must be commenced within five years of the date the claim accrued.” The position of the Securities and Exchange Commission (SEC) at the Supreme Court and in all other matters involving this issue was that profit disgorgement were not punitive, hence not a penalty but rather remedial in nature so the SEC could clawback all monies generated as a result of the illegal action. 

The decision, authored by Justice Sotomayor, was a 9-0 opinion which in the rarified world of Supreme Court decisions is about as clear a message as one can get. The Court first determined that profit disgorgement met the definition of a “penalty” under two basis, “First, whether a sanction represents a penalty turns in part on “whether the wrong sought to be redressed is a wrong to the public, or a wrong to the individual.” Second, a pecuniary sanction operates as a penalty if it is sought “for the purpose of punishment, and to deter others from offending in like manner” rather than to compensate victims.” [citations omitted] Thus, if a statute provided a compensatory remedy for a private wrong, it should not be characterized as penalty.

In this episode, I visit with Chris Morton, the SVP, Marketing and Corporate Development for Navex, about the firm's new resource for the Compliance Community, ComplianceNext.com. It is a free, compliance community driven learning platform designed to offer real-world education and skill enhancement for the compliance professional. Morton discusses its launch, the partners involved, highlights some of the content and discusses the user experience. Best of all, this resource is FREE. For more information, check out the site ComplianceNext.com.

This week, Jay and I have a wide-ranging discussion on some of the week’s top compliance related stories. We discuss: 

1. Brazilian meatpacker JBS agrees to the largest fine ever for fine for bribery and corruption, $3.2bn in Brazil. See article in the Wall Street Journal.
2. Samuel Mebiame, sentenced to two years behind bars for paying bribes to help Och-Ziff with lucrative mining deals in Africa. See article by Sam Rubenfeld in WSJ Risk and Compliance Journal. Judge asks why no one else was criminally prosecuted. See article in Bloomberg.
3. Both acquirer and target are under SFO investigation in Wood Group/AMEC merger for their use of Unaoil. See articles in This is Moneyand The Telegraph. 
4. Compliance is making its way into Boards of Directors. See article by Ben DiPietro in the WSJ Risk and Compliance Journal.
5. Did Jared Kushner violate the FCPA? Matthew Stephenson explores this question on the Global Anti-Corruption Blog.
6. Jay previews his weekend report.
7. Tom continues to talk about the release of his new book 2016 – The Year in Corporate FCPA Enforcement. For more information and to purchase, click here.