The Corruption Files Thomas Fox

Thomas Fox and Michael DeBernardis discuss energy cases considered FCPA violations, highlighting Panalpina Settlement Day, the uncovered bribery methods, and its implications on the future of compliance, the written policies, and the solutions to commerce and transactions in higher-risk jurisdictions.

 ▶️ Energy Violations and the Panalpina Settlements with Thomas Fox and Michael DeBernardis

Key points discussed in the episode:

✔️ Tom Fox introduces the cases involving Shell, Transocean, Tidewater, Pride International, and Noble.

✔️ Michael DeBernardis describes the company’s methods as a hub-and-spoke arrangement and lays out the Department of Justice’s investigative process. The case has planted the seeds of the pilot program and corporate enforcement policy. The DOJ has become more deliberate in announcing settlements

✔️ Due diligence requires visibility across all aspects of the business. Thomas Fox shares a snippet of advice from a shipping company executive: “If you have a vendor with a 100% success rate, you have a problem.” Any business model based on bribery and corruption never ends well.

✔️ Panalpina’s methods were an open secret across other energy companies, designing ways to circumvent Nigerian customs. Monitoring during this time was less rigorous.

✔️ Due diligence is an ongoing process of improvement. High-risk jurisdictions for particular transactions are now thrown at the forefront.

✔️ Companies outside of the oil and gas industry have started to reconsider their strategies in high-risk areas. The solution is not to stop doing business completely but to work with companies that do compliance.

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Tom Fox and Michael DeBernardis shed light on the bribery schemes highlighted in the cases of Eli Lilly, Fresenius, and Teva and present the prosecutorial investigation, the questionable donations and expenses, preventative measures for companies to implement, and practicing due diligence to minimize risk.

▶️ Uncovering the Hidden Schemes in Pharma with Thomas Fox and Michael DeBernardis

Key points discussed in the episode:

✔️ Thomas Fox introduces the cases involving Eli Lilly, Fresenius, and Teva.

✔️ Michael DeBernardis breaks down the DOJ and SEC’s investigative process in uncovering Eli Lilly’s bribery schemes – by looking into other companies from similar industries and asking the pressing questions.

✔️ Thomas Fox describes the bribes made: money going to hospitals and to the doctors and nurses directly, sending individuals to five-star resorts for fake conferences and speeches, and paying for articles that were never published. Any prior SCC reinforcement action is already a red flag.

✔️ The Eli Lilly case has made companies warier of working with government officials as a Polish state-owned health organization was involved. Also, the intent of the fraudulent talks and events was fairly obvious from a prosecutorial perspective.

✔️ Michael DeBernardis and Thomas Fox share advice on how companies should approach charitable donations: Know where your money is going, do background checks on the receiving organization and publicize all donations.

✔️ Eli Lilly’s exceeding discount for a certain distributor was pushed to the spotlight. Overriding internal controls requires documenting for a business reason. Most due diligence problems can be solved by looking closer at business justifications.


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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
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This is Tom Fox. I'd like to welcome you to an exciting new podcast series that I'm premiering on the Compliance Podcast Network, The Corruption Files, together with my co-host Thomas Fox and Michael DeBernardis, an artist partner at Hughes Hubbard & Reed LLP. We're going to be taking a look at some of the top corruption enforcement actions in the United States and beyond.
 In our first five episodes, we're going to focus on some key industries inside the United States, which had important FCPA actions. We're going to focus on the background of each of the enforcement actions. 
What did it mean from the prosecutorial perspective, from both the Department of Justice and the Securities and Exchange Commission? And then what did it mean at the time of the enforcement action? What does it mean today and what does it continue to mean for the compliance professional in the future? 
I know you'll enjoy this great new series, The Corruption Files.
Texas Tax rate at 80% of 8.25%

Thomas Fox and Michael DeBernardis discuss the inner workings of bribery in the tech industry, specifically cases involving HP, Microsoft, and Panasonic, the DOJ and SEC driving home the benefits of voluntary disclosure and their response to future cases, and how companies can practice due diligence even within internal controls.

▶️ Bribery in Tech with Thomas Fox and Michael DeBernardis 

Key points discussed in the episode:

✔️ Thomas Fox gives a brief background on the cases involving HP, Microsoft, and Panasonic.

✔️ Michael DeBernardis lays out the DOJ and SEC’s investigative process, with a focus on the benefits of voluntary disclosure. Data analytics has also been tossed in the forefront as Microsoft pioneered the transparency of looking into their distributor models and has now been added to compliance guidelines.

✔️ Petty cash has been proven to be an aspect worth examining as HP’s bribery case revolved around the lack of controls. HP’s schemes in Germany and Mexico also emphasized why training your team – whether contractual or full-time – should be trained to handle high-risk situations.

✔️ Internal and compliance controls must be interconnected. Otherwise, wrongdoers will find loopholes and take advantage of them. Making sales to a foreign government also means putting a target on your back.

✔️ Thomas Fox goes into detail about Panasonic’s case regarding corrupt agents, Microsoft’s move towards transaction monitoring, and HP’s suspicious commission discounts coinciding with the Parker Drilling case.

✔️ The DOJ has now provided clear guidance for compliance. Companies are now encouraged to fully disclose their transactions to benefit them in terms of credibility and reduced total penalties.

✔️ Greatly improving their responses, the DOJ has understood the value of cooperation and voluntary disclosure and widened its body of FCPA cases, making it easier for lawyers to counsel companies in preventing future issues from happening.

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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
Texas Tax rate at 80% of 8.25%

Tom Fox and Michael DeBernardis go in-depth about the bribery scandals of three big names in telecom, MTS, VimpelCom, and Telia; Ericsson’s shady deals in multiple countries, how knowing high-risk countries and the beneficiaries of companies can save you from trouble, and the importance of visibility for compliance professionals.
▶️ The Bribery Trilogy in Telecom with Tom Fox and Michael DeBernardis
Key points discussed in the episode:
✔️ Tom Fox gives a brief background on the VimpelCom case. He points out how the company, including MTS and Telia, were all tied up with the schemes of Gulnara Karimova, the daughter of a former president in Uzbekistan.
✔️ The DOJ and the SEC are confident in tackling companies taking advantage of “shell companies” and getting involved with corrupt government officials. There was malicious intent on the companies’ sides regardless of the rank of the person involved.
✔️ Tom Fox describes the Telia case. Michael DeBernardis points out that the difference between the outcomes of Telia, MTS, and VimpelCom’s cases was the penalties. Cooperation from Telia and Vimpelcom garnered significant reductions.
✔️ Tom Fox lays out the MTS case. Even when violations were found in Kolorit’s purchase, MTS higher-ups presented excuses that the compliance team failed to argue. The control environment for transparency has since improved post-prosecution.
✔️ Michael DeBernardis emphasizes the risk behind unidentified beneficial owners. VimpelCom, Telia, and MTS had full knowledge of their schemes. But the story is a lot more muddied and complex to the ears of the board and compliance professionals.
✔️ Tom Fox retells the Ericsson case, illustrating it as not just a corrupt third-party, paid-for entertainment, or donations. The imagination only limits the depths where companies explore in weaving the most intricate schemes. Michael DeBernardis attributes this to enterprise-wide failure.
✔️ Knowing the high-risk countries can save your company from trouble. Once you start paying bribes, you’re stuck. The receiving party already has claws on you and will threaten to report to US authorities if you attempt to exit. Michael DeBernardis adds that despite these cases being beyond US soil, companies won’t be able to challenge them.
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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
Texas Tax rate at 80% of 8.25%

Welcome to another episode of The Corruption Files! 

Thomas Fox and Michael DeBernardis discuss questionable hiring practices from JP Morgan, Credit Suisse, and Bank of New York (BNY) Mellon in employing relatives of high-profile clients to gain favor. They also discuss how companies can find a middle ground in hiring families, why Hiring can be a high-risk area, preventative questions to avoid a violation and the significance of internal control and documentation.

▶️ Hiring in the Financial Space with Thomas Fox and Michael DeBernardis

Key points discussed in the episode:

✔️ Thomas Fox gives a brief background on the BNY Mellon case.

✔️ Michael DeBernardis mentions how Hiring based on connections has existed for a long time and doesn’t directly violate any laws. It’s all up to a company’s intent. For BNY Mellon, it was to maintain close connections with major clients. He recommends compliance professionals look into their company’s hiring process.

✔️ Hiring unqualified people means you’re hiring them for other reasons. JP Morgan took in ineligible candidates for leverage with high-profile clients and free advertising in their respective home countries. Documentation stopped JP Morgan in its tracks.

✔️ JP Morgan structured hiring program managed to override compliance controls, revealing regulation flaws. Being discovered next to BNY Mellon’s case, it was not the last instance of son-and-daughter corruption.

✔️ Thomas Fox retells the Credit Suisse case. Retracing the company’s spreadsheets revealed their inner workings.

✔️ The risk of hiring relatives can be minimized when there is a middle ground. Thomas Fox shares questions to ask to prevent violations. He also adds strengthening internal control can put a company on the good side of regulators.

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Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at tfox@tfoxlaw.com.
Texas Tax rate at 80% of 8.25%