Just what the compliance doctor ordered

DOJ last week issued corporate compliance guidelines, including more clarity on FCPA enforcement    The U.S. Department of Justice last week quietly unveiled a set of corporate compliance guidelines that should go a long way toward providing instruction as to how that department will view infractions, self-reporting, and remediation measures under a new presidential administration.
   At a more basic level, the guidelines also are a reassurance to the compliance community that several initiatives started or expanded during the Obama administration will be continued.
Compliance blogs last week also noted that the guidelines are actually more specific than any previous set of compliance advice issued by the Justice Department, especially in relation to the agency’s Fraud Section, with 46 sets of questions prosecutors would typically ask about a compliance program.
   “While most of its contents will not strike those well-versed in compliance as particularly ground-breaking, the document does make more explicit and transparent the factors that the Fraud Section considers, and the questions it frequently asks, in assessing compliance programs,” the law firm White & Case noted Feb. 17.
   The guidelines are particularly useful in helping companies manage compliance with the anti-bribery Foreign Corrupt Practices Act (FCPA), with clearer guidance about the intent of the act and what considerations are taken into account when penalties are to be meted out.
   The Justice Department last issued major FCPA compliance guidelines in 2012.
   Matt Kelly cited, in a Feb. 18 entry on the Radical Compliance blog, a set of questions in the guidelines about how a company can show that it has endeavored to educate employees about improper behavior.
   “Really, those questions try to get at how your company demonstrates to employees that good conduct is rewarded, bad conduct punished,” he wrote. “Demonstrating the importance of something is communication. These questions don’t ask whether you hang the anti-bribery policy in the bathroom. They ask about how the company shows employees that it’s serious about anti-bribery and good conduct. That’s the communication that matters.

This guidance is the sort of thing a compliance officer should print out and pin to your wall.

   Also last week, Trevor McFadden, who will oversee the Fraud Section as deputy assistant attorney general, said that FCPA enforcement will continue to be a priority, that prosecution of individuals will be a priority, and that cooperation from companies will be rewarded, Kelly noted.
   “Clearly the list isn’t meant to be definitive,” Kelly wrote. “Nor does it break any new ground conceptually. Nothing in this guidance will surprise any compliance professional who has been following FCPA enforcement in recent years. Still, it’s an excellent roadmap to help a compliance officer prepare for the conversations to come once you disclose that FCPA violation you just discovered.”
   Kelly also said it’s a good sign McFadden indicated that having a compliance counsel in the Fraud Section has been helpful, as the counsel (Hui Chen, who spent time as in-house compliance officer at Standard Chartered, Microsoft, and Pfizer) has been a helpful conduit for the private sector.
   Earlier this week, Kelly called the guidance “manna from heaven for corporate compliance officers,” saying it provided indications that the Fraud Division would focus on a company’s ability to audit, its policies and procedures and its ability to track metrics.
   “For example, one question asks whether the company ‘collects, analyzes, and uses information from its reporting mechanisms,’” he wrote. “Great idea, but not an easy task. Compliance officers need to cobble together data from whistleblower hotlines, in-person reports to managers, and possibly even employee satisfaction surveys. You need a system to “normalize” those different information formats so your analytics can find trends that do exist, but don’t exist in a readily visible form.”
   FCPA has been a ticklish subject for compliance departments since it came into force. It deals with an area that’s often gray, guidelines for compliance haven’t often been crystal clear, and the extent to which violations are confined to an individual or to the company at large have been murky.
   Perhaps that why there’s been so much excitement in the compliance community for these additional guidelines.
   “This guidance is the sort of thing a compliance officer should print out and pin to your wall,” Kelly wrote.