FCPA Compliance and Ethics Blog

March 28, 2014

Tales From the Crypt-Rule 6: Never Mix Business With Pleasure

Tales from the CryptEd. Note-this week on am on a Spring Break college tour with my daughter. The Two Tough Cookies whom are penning the Tales From the Crypt Series have graciously agreed to contribute a week’s worth of workplace Tales from their crypts so help illustrate some key compliance and ethics concepts. Today they look at why you should never mix business with pleasure…

This Tale from our Crypt highlights the treacherous abyss of dating in the workplace, especially when it involves senior management.  We have alluded in prior posts that management doesn’t always want to get involved in personal matters, and in this instance, that reservation was in full force. The rumor mill was in high gear pertaining to a certain US-based manager and an overseas executive.  If the rumors were right, the two of them were managing a global whirlwind romance, which seemed a bit of a stretch to those of us in HQ, so we really didn’t pay much attention when the rumors first surfaced.  After all, if it didn’t interfere with either individual’s work commitments, it was not “our place” to interfere.

Imagine my surprise when I received an anonymous email, written as if a committee had crafted the contents, pleading for help because the overseas executive appeared to be too distracted by his temptress’s charms to mind the shop, and critical business decisions either weren’t being made, or were being made without full consideration of the outcome.   “Business” meetings hours long in length were being held behind closed doors between the executive and the manager, notwithstanding the fact that the executive was married, and the manager was not one of his direct reports. Ultimately, the allegations  escalated to the level of accusing the executive of turning the keys of the kingdom over to his “princess” who was running the subsidiary as the de facto executive, making decisions on employee roles and responsibilities.

Our first reaction was to reply to the email, seeking some nuggets of information that would give us a bit more than simply lack of discretion and “suspected” unauthorized delegation of authority. It wouldn’t be the first time, and most certainly not the last, that an illicit workplace affair would surface – it happens sometimes.  Rumors start, regardless of the truth of the allegations, whenever two people of spend a lot of time together.  In fact, I have been suspected of having an affair with a junior colleague although the suspicions were baseless.  We simply got along incredibly well, and I would never think of jeopardizing my extremely happy marriage (not to mention my career) with even a moment of workplace indiscretion.

When we started to dig after receiving some more detail from the anonymous source, we also started to hear rumors that the pair were recently seen, holding hands while out in public, during one of those extended business trips the executive made to the States.  While there was no allegation of misconduct in violation of the Code of Conduct or any other policy in the organization, the tone of the concerns inferred a serious lack of management oversight by the executive, with work assignments, customers and special projects all being assigned favorably to the manager or her “friends.”  As we started to look a bit closer, we found she had convinced her Stateside manager that her skills were in “desperate need” at the foreign subsidiary, and she had been making frequent trips there with the costs charged back to the sub.  Her boss didn’t care as long as she got her work done, and the bills for her frequent trips were not on his P&L.

Once again, we started a forensic review of each party’s computer records to determine if there were any inappropriate communications between them.  While the executive’s email account was purged nightly based on his settings, the manager’s wasn’t, giving us some insight into the true nature of their relationship.  The smoking gun surfaced when I discovered an email just prior to the most recent ‘business trip’ with a demand for expensive lingerie and perfume as “presents” for their next “meeting.”  So I tagged that email, and started a mail server search of all related messages, and a treasure trove opened wide for me.  Jaw dropping material, revealing pet names and an intimate relationship that easily spanned upwards of a year.  A review of the subsidiary’s financial records revealed bills paid for a rent on house, a car, clothing allowances… the works, with all of these “perks” earmarked for the manager charged back to (and paid for by) the subsidiary, of course.

I decided to expand the scope of my search, and asked IT to patch me into the executive’s system when he would be away from the office, during off hours.   We sent out a memo to the location, advising the local management team that all computers had to be left on each night for the following week so that critical updates and software patches could be remotely made to their computers from HQ.  What I found when I finally got “in” shocked me to the core.  Not only were there intimate emails from the manager squirreled away on his hard drive, but oh, so much more…. A whole folder devoted entirely to hard core porn. What WAS that guy thinking!?!  Sometimes my job is actually distasteful – copying those images onto our servers to “preserve” the evidence, along with an image of the file hierarchy on his hard drive, made me squeamish.  When I shared my findings with the General Counsel, his face beet red in embarrassment at the images I called up, he told me he had seen enough.  We had to plan what to do, because removal of this executive entailed a lengthy process under local laws.

Putting our collective heads together, we determined the best course of action would be to offer the executive the opportunity to resign.  We prepared the papers, and consulted with a local board member who we trusted with our findings.  The shock that registered on his face when he learned our news told a tale of utter devastation.  The innocent lives of his family and loved ones were to be ruined with this man’s single act of selfish impropriety if we did not act with care. This was no time to make a public example of the executive – we needed to act with delicacy and tact.  The manager, on the other hand, was not our concern.  We had no issue taking prompt action with her for her lack of discretion.

It is only when I received a note of thanks from my anonymous source that I understood the true impact we Integrity and Compliance professionals have on others’ lives.  I was satisfied with the outcome against the executive.  He clearly breached his duty of trust to the organization, but more importantly, he lost the trust of the very people who looked up to him, day to day.  Another set of circumstances may have resulted differently, but these people cared about the company, cared that their “leader” was absent.  We owed it to them to care as well.

The anonymous note of thanks which I received warmed me to my very core:

The head is today held high in pride of working for a Company which has …. demonstrated unflinching commitment to ethics and values… the recent action taken has brought unprecedented respect and esteem in the minds of the entire working community. [We] want to personally thank you for …. restoring faith and confidence that any violation in ethics or values in this company, if reported to the [correct people], shall be dealt with immediately … professionally …  and transparently. Since complete confidentiality has been maintained, people now know that what has gone wrong is more important than who has reported the issue…. Thank you once again and forever indebted…….

No, my dear colleagues, the Company is in your debt for demonstrating unshakable courage during a time which must have provoked intense fear and uncertainty.

Who are the Two Tough Cookies? 

Tough Cookie 1 has spent the more than half of her 20+ legal career working in the Integrity and Compliance field, and has been the architect of award-winning and effective ethics and compliance programs at both publicly traded and privately held companies.  Tough Cookie 2 is a Certified Internal Auditor and CPA who has faced ethical and compliance challenges in a variety of industries and geographies and recently led a global internal audit team. Our series “Tales from the Crypt: Tough Choices for Tough Cookies” are drawn largely from real life experiences on the front line of working in Integrity & Compliance, and personal details have been scrubbed to protect, well, you know, just about everyone… 

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