FCPA Compliance and Ethics Blog

December 7, 2012

How the Noir Novel Informs Your Compliance Program

In the Work Matters column in the December 3 Issue of the Texas Lawyer, in an article entitled, “Ten Phrases Lawyers Hear That Portend Disaster” author Michael Maslanka explored his love of noir fiction, which I share, through listed 10 phases that show the “it” so famous in noir novels is coming. The ten warning signs that he listed are as follows:

1. “Isn’t it obvious?” I hear this from managers when a company refuses to hire a disabled applicant, as in, “Isn’t it obvious that a man with one arm can’t do this job?” The manager unwisely forecloses the inquiry required by the Americans With Disabilities Act: An employer must determine if the employee can perform the essential functions of the job, with or without a reasonable accommodation.

Another example is when a supervisor says, “Isn’t it obvious that we don’t want to hire a convicted felon for this job?” That person unwisely ignores the EEOC’s new emphasis that automatic exclusion of an applicant with a criminal record may be a proxy for race discrimination.

2. “This is a no-lose case with a guaranteed two-comma verdict.” Listen to this quotation from Proverbs 28:20: “[H]e that maketh haste to be rich shall not be innocent.” Isn’t that the truth?

From the fictional Gordon Gekko to the all-too-real Bernie Madoff, those who greedily grasp after riches may be slow to reveal their lack of integrity. They show their true character only under careful attention and scrutiny. The best antidote: Be a person of character. As W.C. Fields wisely remarked, “You can’t cheat an honest man.”

3. “We must decide today!” Here is the greatest enemy of an integrity-based decision: time pressure. “Fire the employee now!” “We have to get this order of widgets out by 5 p.m. — no ifs, ands or buts.”

To paraphrase H.L. Mencken, decisions made under unnecessary time pressures usually are “swift, sure, and wrong.” When under pressure to do something “now,” the wise attorney should ask the client, “If we had 10 times as much time to make this decision, would it be the same decision?”

4. “That’s the other side’s problem.” I hear this from time to time, and I bet many lawyers do. These two statements always are cause to take a timeout:

• “That’s not our problem; it’s the other side’s problem”

• “Let them worry about that.”

When people start saying things like that, ask whether they’re doing so because the statements are true or because the underlying issue involves unpleasant facts that it’s easier not to acknowledge. Recall Ben Franklin’s wise advice: “Half a truth is often a great lie.”

Litigators and deal makers hear phrases like these. Events are percolating along, and someone on the team asks, “Should we be doing this?” or “Does the other party know about this issue?” When the question answers itself, it’s time for the lawyer to ask whether truth or convenience is driving the client’s position. Convenience never trumps ethics.

5 “Everybody else is doing it.” Here is just some of what I have heard in 31 years of practicing law:

• “Companies in my industry don’t pay overtime, so why should I?”

• “The guy with the company down the road fired the union organizer among the employees, and nothing happened to him.”

• “Don’t tell me what I can’t do; I’m paying you for telling me what I can do.”

Those who win the race to the bottom still lose. Stephen Cope, in his book “The Great Work of Your Life: A Guide for the Journey to Your True Calling” explains that “The Bhagavad Gita” teaches that it is better to follow one’s true dharma and fail than to follow others’ false dharma and succeed monetarily. And, let’s face it: The truth comes out in the end.

6. “We can’t change course now. We have too much invested.” This is false-dichotomy territory. How can a lawyer break through this either/or mindset? Mary C. Gentile offers advice in her book, “Giving Voice to Values: How to Speak Your Mind When You Know What’s Right.” She suggests changing the frame. Reject “We did not get what we wanted.” Embrace “What did we learn from this experience?”

Failing to do so conjures up, for me, lines from W. H. Auden’s “The Age of Anxiety”: “We would rather be ruined than changed/We would rather die in our dread/than climb the cross of the moment/and let our illusions die.” Change course. It’s the smart play.

7. Another pair of eyes on the project? You’re joking, right? What a waste.” True, projects are overlawyered and overanalyzed. But active resistance to advice is a telling sign that something maybe seriously amiss. Take it as a warning to press all the more for that other set of eyes.

An ostrich-like attitude of self-delusion can lead to disaster. Listen to Proverbs 1:30-31: “They would none of my counsel: they despised all my reproof. Therefore shall they eat the fruit of their own way, and be filled with their own devices.”

8. “We’ve always thought about it this way, and we always will.” I can do no better than Justice Felix Frankfurter, who decided a legal issue one way in 1943 and then completely reversed course in 1949. He gave this explanation in his opinion in Henslee v. Union Planters Bank: “Wisdom too often never comes, and so one ought not to reject it merely because it comes late.” Genius.

9. It is what it is.” Huh? This phrase now is used principally by those who want to sound insightful and wise but who are just dazed and confused. Only Buddhist monks are allowed to talk like Buddhist monks.

10. You are the most wonderful person I have ever met. We were meant to start this business/do this deal/win this suit.” Beware flattery without facts, especially when it comes too fast, too soon. It is a sign of a sociopath. They target their victims (people they can use), compromise their targets’ integrity, exploit them and toss them aside when finished. The whole cycle starts with false flattery.

These also have application for the compliance practitioner. If you hear a third party mention any of these, either in the due diligence process or in your relationship going forward, you need to drop what you are doing and begin an investigation. If you hear anyone in your company utter these, move post-haste as well. But most of all, these phrases should remind you just how great this classic American fiction is and how you can use it to inform your compliance program.

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For those of you unaware, the Houston Texans will play the New England Patriots in Foxboro this weekend. I have friendly wagers with two of my favorite Patriot fans, Matt Kelly, Editor of Compliance Week and Jay Rosen, Vice President, Language Solutions Merrill Brink International. For the Compliance angle, see the piece by Matt entitled, “Sportsmanlike Conduct”. Go Texans!

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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 tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

June 4, 2012

Best Practices for Localizing Corporate Ethics and Compliance Policies

Ed. Note-I had asked my friend Jay Rosen if he would submit a post from his perspective as VP of Merrill Brink International. I did not know the subject of his blog and so when I received it Friday afternoon after my post last Friday on “The Need to Recognize Cultural Differences When Creating a Compliance Program” I thought true serendipity had arisen. Thanks, Jay.

In the fall of 2011, Tom Fox was kind enough to invite me to post a guest blog,  “Don’t Get Lost in [FCPA] Translation”.  In that piece, I presented how language solution decisions come into play at the onset of an active internal corruption or cross-border investigation.

Today, I will look at the recommended translation and localization policy decisions that should be put in place as part of a robust ethics and compliance program, well in advance of an emergency “boots on the ground” situation.

Depending on the type of organization (manufacturing, sales, distribution, or a combination of all three) and the number of countries (and various languages) where your company conducts global business, the Company will most likely need to translate or localize some if not all of the following documents:

  • Code of Conduct
  • Anti-Bribery Policy
  • Anti-Corruption Policy
  • Third Party Due Diligence Questionnaire
  • Contracts
  • Employment Agreements
  • Leases

Ethics and legal compliance documents usually fall under the scope of corporate legal or compliance, HR, internal audit or training (eLearning) stakeholders.  In some corporations, the documents may also belong to an import/export or ITAR group.  Source material will most often be in English and require translation into a number of languages.  These services may be sourced directly by the Company or through outside counsel.

Due to the high stakes involved in mitigating FCPA investigations, it is recommended that the translation of these materials be done through a qualified Language Solutions Provider (LSP) capable of issuing a Certificate of Accuracy (COA) to confirm that the documents have been faithfully translated to impart the precise meaning of the English-based ethics and compliance policies.

Often, local stakeholders may suggest engaging “in-country” resources to translate these materials.  These resources are often bi-lingual employees whose primary role is something other than translation. While certain internal communications may be best handled by “in-country” resources, the timely translation of ethics and compliance documents is usually best accomplished when outsourced to a trusted LSP who is accountable for meeting quality standards and delivery deadlines.  “In-country” resources can be a valuable partner in reviewing translated content to ensure it meets local standards and such partnerships between outside LSP and internal resources is highly recommended.

Once the documents have been translated, the LSP should maintain a Translation Memory (“TM”) that can be leveraged to minimize the costs of future code and policy updates as well as repurposing ethics and compliance material for eLearning, HR, internal audit, and training.

Finally, engage an LSP with specific subject matter expertise in FCPA and UKBA ethics and compliance translation and localization.

By seeking out a professional and reputable legal translation solutions provider, the Company will be taking an important first step in guaranteeing the quality of its ethics and compliance translations and establishing the cornerstone of a global corporate compliance and ethics translation program.

Jay Rosen is a Vice President, Language Solutions at Merrill Brink International, based in Los Angeles, where he advises businesses and law firms on translation solutions for FCPA, Ethics, Compliance, Code of Conduct and eLearning. He can be reached via email at jay.rosen@merrillcorp.com and via phone at 310-729-6746.

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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. 

June 1, 2012

The Need to Recognize Cultural Differences When Creating a Compliance Program

In an article in the June issue of the Harvard Business Review (HBR), entitled “Why ‘I’m Sorry’ Doesn’t Always Translate”, authors William W. Maddux, Peter H. Kim, Tetsushi Okumura and Jeanne M. Brett wrote about the lack of understanding between Americans and Japanese over a “seemingly simply concept: the apology.”  The authors provided two examples, the first being that “Americans were unmoved by Toyota CEO Akio Toyoda’s effusive apologies in 2010, after widespread reports of malfunctioning accelerators.”, which they contrasted with the fact that the Japanese “bristled” when a US sub commander did not immediately apologize for surfacing without noticing a Japanese fishing boat was above him and thereby sinking the fishing trawler.

So what is the difference? The authors believe that Americans see an apology as an admission of “wrongdoing”. The authors found that Americans tend to link apologies with blame based upon our tendency to attribute actions to individuals and apologies often serve to establish personal responsibility. Conversely they found that East Asian cultures have a more group oriented culture. They noted that the Japanese “see it as an expression of an eagerness to repair a damaged relationship, with no culpability implied.” This leads to apology focusing on the larger consequences of the error. This dichotomy plays out in other areas, for instance, when the Japanese investigate a matter, it is usually designed to find a solution to the underlying problem. In the US, post-incident investigations tend to try to assess blame for the incident in question.

There are certainly other examples of cultural differences but the authors’ message is that something as simple as an apology can be one aspect “of a broad semantic disconnect between East and West that’s too often ignored in the rush to globalization.” This is also the message that my colleague Jay Rosen of MerrillBrink, short-term suffering Red Sox and Celtic fan, continually sends out to be sensitive in translations because if you are not sensitive you will certainly lose something in the translation. The authors end by noting that “Only with a deep understanding of such differences can executives make efficient use of the apology as a tool for facilitating negotiations, resolving conflicts and repairing trust.”

So what does this mean in your compliance program? Simply implementing a Western-centric anti-corruption or anti-bribery program without some cultural sensitivity can set the program up for failure. The issue of gifts and gift-giving in the Far East is quite different than in the US. It is often expected that a small gift be presented when meeting a person for the first time. Some companies ban all gifts to governmental officials based upon the perceived requirements of the Foreign Corrupt Practices Act (FCPA). I do not believe that the Department of Justice (DOJ) has ever taken the position that all gifts must be banned.

You can certainly present a small dollar value gift that is unique and might well be considered very appropriate under the circumstances. I would opine that you should have two considerations in determining the gift and making the presentation. The first is that whatever the gift is, it should not be readily convertible to cash. This means no gift cards of any kind, even a $5 gift card to Starbucks. If you can have your company name on the gift that is probably the best thing you can do to remove its monetary value on the secondary market. The second consideration is transparency. Can the gift be presented in public in front of the receiver’s co-workers? If the answer is yes, this would lead me to suggest that the gift is appropriate. However, if either the gift presenter or gift receiver does not feel comfortable in having the gift presentation in public, I think that you may have a problem.

So just as the words “I am sorry” can be mis-interpreted; so can matters in a compliance program. But if you show sensitivity and nuance, you may be able to avoid that “broad semantic disconnect” that the authors are concerned about in their article.

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 tfox@tfoxlaw.com.

© Thomas R. Fox, 2012

November 21, 2011

Don’t Get Lost in [FCPA] Translation

Filed under: FCPA,Investigations — tfoxlaw @ 1:58 am
Tags: , ,

Jay  Rosen

Ed. Note-today we have a guest post by Jay Rosen.

In late October, a colleague and I were having breakfast with Tom Fox in Houston. We were in town to participate in an FCPA event which we were hosting with Akin Gump and Deloitte. While we were trading war stories about past and ongoing investigations, Tom proposed the following scenario:

“You’ve just stepped off the tarmac in Beijing and you are speeding in a SUV to your client’s headquarters to begin collecting documents. What do you need to know before you walk through that door and what steps could you have taken ahead of time to prepare for that day?”

While the answer to his question could take many different angles (depending on your role in the investigation), my response was focused on best practices for managing the foreign language portion of a case. Clients often reach out to me for advice on managing translations for FCPA and white collar investigations, cross-border litigations and related matters. Though each translation matter posses its own unique set of challenges, the common denominator is “What is the most cost effective way to match the proper translation solution with the needs of this case?”

Many clients consider translation to be something they can handle in-house since:

  • “Becky down the hall speaks Spanish”
  • “I’ll use Google Translate”
  • “The associates in our Paris office can handle this”
  • “The forensic accountants in Beijing or the document reviewers in Shenzhen can translate this information on the fly.”

In certain circumstances, all of these options have some validity, but for a mission critical project where accuracy and deadlines are key, these are not typically the best choice.

FCPA matters demand a different level of sophistication and execution. By engaging a professional Language Service Provider (LSP) at the front end of your investigation, you can leverage filtering and translation solutions that will result in a more cost and time efficient language management process. These solutions include:

  • Language Identification
  • Foreign Language Key Word Search
  • Machine Translation
  • Summary Translations
  • Human Translations

This method of filtering foreign language data utilizing technology solutions (Language Identification, Foreign Language Key Word Search and Machine Translation) ensures that you only translate those documents that are absolutely necessary. For example, in a recent Turkish FCPA matter, Merrill Brink’s filtering tools reduced the number of translated documents to 3,000 out of an initial universe of 1,000,000.

While it is tempting to employ the least costly solution, or utilize “boots on the ground” instead of hiring professional translators, the end result of this decision often requires professional translators (who should have started the process in the first place) being brought in to salvage the job and finish it correctly.

In circling back to our initial question — “What do you need to know before you walk through that door and what steps could you have taken ahead of time to prepare for that day?”

Any company with global operations, if they do not already have a trusted translation provider, must seek out a LSP with the capabilities to employ both technology and human translation solutions to minimize the ultimate number of words (pages) to be translated and to match the most cost effective level of translation with each individual stage of the investigation. This is important not only from an investigation and auditing perspective, but these same translation resources can be leveraged to localize compliance, training, eLearning and code of conduct content throughout the organization.

All of these tools should be utilized to reduce the amount of data that require full translation. Thus the only documents requiring full translations are those that must be presented to an official body (DOJ, SEC).

By knowing this information in advance, the team in the speeding SUV can concentrate on the job at hand — securing the location, collecting the data and interviewing employees. After all this information has been collected, and a LSP has been engaged, they can begin to leverage the above mentioned tools and filtering processes to match appropriate translation solutions to each step of the investigation , contain the costs of human translations and most importantly produce the highest quality translations from professional linguists.

Jay Rosen is a Vice President, Language Solutions at Merrill Brink International, based in Los Angeles, where he advises businesses and law firms on translation solutions for FCPA, Compliance, Code of Conduct and eLearning. He can be reached via email at jay.rosen@merrillcorp.com and via phone at 310-729-6746.

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