I am privileged to speak across the country on current
Foreign Corrupt Practices Act (FCPA) best practices with Stephen Martin,
General Counsel of Corpedia. The FCPA Tour is sponsored by World-Check. For
those of you who do not know Stephen Martin, he is a former prosecutor in the
Department of Justice (DOJ) and has worked at some of America's largest
corporations while handling significant compliance matters. This background
allows him to bring a substantial white collar prosecution and defense
perspective to our presentations as I have only practiced on the civil side.
All companies which come before the DOJ when an incident
or investigation arises claim that they have the best compliance program that
they can afford in place. However, if a company cannot demonstrate the
'robustness' of its program it might as well be for naught. I have written
several posts on three of the most important components of a FCPA best
practices compliance program; which are: documentation, documentation and documentation.
I believe that it is true that the only manner in which to gage the overall
effectiveness of your compliance program is through documentation. Put another
way, if you don't document it, you cannot measure it and if you cannot measure
it, you cannot refine it. Nevertheless, there is one more important aspect to
documentation. It is through the access of this documentation that a company
put forward support that its compliance program is robust.
One of the points which Stephen emphasizes is that when
dealing with prosecutors, whether from the DOJ; Securities and Exchange
Commission (SEC) or state prosecutors, you and your company's credibility are
paramount. This means more than simply self-disclosure and cooperation. Stephen
drives home this point when discussing your company's documentation of its
compliance program. In addition to your documentation, documentation,
documentation; your company must be able to access your documentation and then
be able to produce it in a reasonable time upon request. This means that if it
takes your company four weeks to produce a list of agents, distributors and
other sales representatives; you will lose credibility with a DOJ prosecutor
because the lengthy time it takes to round up such information is a clear sign
that a company does not have robust books and records.
Whether your company is a multi-billion dollar entity or
one with $250 million annual sales, you must be able to access the
documentation of your FCPA compliance system. It certainly helps if your database
is computerized and you can access it via several different search parameters.
However, if your company keeps all its agents, distributors and sales agent due
diligence in a binder, tabbed and indexed on a shelf of the office of the
General Counsel or Chief Compliance Officer, that should enable you to quickly
and efficiently produce the information. As I have heard Mike Volkov say,
"companies are usually not penalized under the FCPA for the quality of their
due diligence but for the lack of doing any due diligence." So if you can
produce your results you will go quite a long way towards establishing
credibility with a DOJ prosecutor.
I am speaking at the upcoming webinars and World-Check
FCPA Road Show events:
Thursday, April 28 at 12 EDT, I am co-hosting a webinar with Mary Shaddock
Jones, Assistant General Counsel and Director of Compliance at Global
Industries, Ltd., on "Current FCPA Compliance Program Best Practices: Lessons
Learned from Recent DPAs". For information and registration details click here.
Thursday May 12 at 11 AM EDT, I am a co-panelist with Scott Moritz, Managing
Director of Navigant, on a webinar hosted by Dow Jones, entitled, "Risk
Assessment: The First Step in Any Compliance Program". For information and
registration details click here.
II. World-Check FCPA Road Shows
Co-presenting with Stephen Martin, General Counsel of Corpedia, on
"Anti-Corruption/FCPA Developments & Best Practices"
Tuesday, May 3 from 8-10 AM PDT at McCormick & Schmick's Seafood
Restaurant, in Phoenix, AZ. For information and registration details click here.
Wednesday, May 4 from 8-10 AM PDT at San Diego Marriott Del Mar: Santa Fe
Ballroom, in San Diego, CA. For information and registration details click here.
I hope you can attend the webinars, and if you are in
Phoenix or San Diego, come out to hear and meet to myself and Stephen Martin.
Visit the FCPA Compliance and Ethics Blog,
hosted by Thomas Fox, for more commentary on FCPA compliance, indemnities and
other forms of risk management for a worldwide energy practice, tax issues
faced by multi-national US companies, insurance coverage issues and protection
of trade secrets.
This publication contains general information
only and is based on the experiences and research of the author. The author is
not, by means of this publication, rendering business, legal advice, or other
professional advice or services. This publication is not a substitute for such
legal advice or services, nor should it be used as a basis for any decision or
action that may affect your business. Before making any decision or taking any
action that may affect your business, you should consult a qualified legal
advisor. The author, his affiliates, and related entities shall not be
responsible for any loss sustained by any person or entity that relies on this
publication. The Author gives his permission to link, post, distribute, or
reference this article for any lawful purpose, provided attribution is made to
the author. The author can be reached at firstname.lastname@example.org.
© Thomas R. Fox, 2011
For more information about LexisNexis
products and solutions connect with us through our corporate site.