Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...
By Yin Wilczek
Oct. 8 — The failure to expand compliance programs when companies grow is an “overarching theme” driving many of the recent compliance problems flagged by the Department of Justice, a senior official said Oct. 7.
“At a minimum, expanding corporations must extend their compliance programs to all of their subsidiaries,” especially those that were recently acquired, said Marshall Miller, Principal Deputy Assistant Attorney General for the DOJ's Criminal Division. In addition, companies must “ensure that all compliance policies are understood and implemented by all employees, no matter what country they work in,” Miller said.
Miller spoke at the Practising Law Institute's Advanced Compliance and Ethics Workshop.Filip Factors.
Under the Principles of Federal Prosecution of Business Organizations, or Filip factors, the DOJ must consider the existence and effectiveness of a company's compliance program as one factor in deciding whether to charge the company.
Miller said good corporate compliance program have three hallmarks:
To illustrate his point, Miller cited, among other examples, the DOJ's prosecution in November 2013 of Swiss oil and natural gas company Weatherford International Ltd. under the Foreign Corrupt Practices Act for bribing officials in the Middle East and Africa . The company agreed to enter into a deferred prosecution agreement and to pay more than $87 million to settle the charges.
Among other shortcomings, Weatherford—despite its global presence—didn't translate its compliance policy into languages other than English, Miller said. The company also admitted that before 2008, it had no dedicated compliance officer or compliance personnel, and didn't undertake anti-corruption training.
The Weatherford case is a “stark example of a problem that we're seeing more and more frequently: the failure of a compliance program to bridge the geographic divides and cultural gaps exposed by global corporate expansion,” Miller said.Wrong Tone.
The DOJ official also cited the case involving BNP Paribas SA. In July, the French bank pleaded guilty to violating U.S. economic sanctions and agreed to pay a record $8.97 billion to resolve related state and federal probes. High-ranking BNP officials had ignored warnings that the company was running afoul of U.S. sanctions, telling compliance officers that the illegal transactions had the “full support” of BNP management in Paris, Miller noted.
“The BNPP case is thus not a simple story of a poor compliance policy, but a more complex tale of leadership failure and institutional greed,” he said.
A good compliance program must have the ability to uncover corporate misconduct and the individual wrongdoers, even on a global scale, Miller said. “A compliance program's ability to uncover wrongdoing and the responsible individuals, coupled with a corporation's decision to disclose that information to the government, is significant in our evaluation of the compliance program and the company's overall posture with the government,” he said.
To contact the reporter on this story: Yin Wilczek in Washington at email@example.com
To contact the editor responsible for this story: Mike Moore at firstname.lastname@example.org
The text of Miller's speech is available at http://www.justice.gov/opa/speech/remarks-principal-deputy-assistant-attorney-general-criminal-division-marshall-l-miller-0
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)