Posts in Compliance
P is for Peril


Copyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™

We’re friends so I can tell you about the time I almost got arrested.  It was a typical weekday morning.  I was driving to my office with nothing in particular on my mind except getting there through the city traffic.  It was about 6:15 AM when my mobile phone rang and a tentative voice said: “Um, Barney, where are you now?”  I explained that I was heading to the office and asked, “What’s up?”  The caller asked, “Is there any way you could swing by the factory first?”  I assured him that I could and asked again, “what’s up?” I don’t remember if I pulled over and stopped or speeded up to get there faster because what he said had both effects on me.  “Well, there are 60 armed Federal agents with a search warrant, all sorts of reporters, and 3 TV satellite trucks.”  Over the pounding of my heart, I did hear myself say “I’ll be right there!”  15 minutes later I was.  And I didn’t get home until 11:30 that night! Let me diverge for a minute and tell you that this is the “P is for Peril” part of the story!  Only the P is for 3Ps.  You see, I have always maintained that we are better at solving our problems than the 3 Ps: the Police, the Press, and the Prosecutors.  But someone has to tell us there’s a problem!  If they tell any of those 3, solutions become much harder.  In this case, all 3 were involved.  The 60 armed Federal agents were from at least 4 different law enforcement (investigative) agencies.  The Press, obvious. Print and broadcast.  And the Prosecutor, lurking in the background, had issued the search warrants. And the peril is: huge fines and penalties; suspension and debarment from future government business; long stretches of time wearing an orange jumpsuit in a federal prison (not a country club); oh yes, and your reputation? Forget about it.  That’s why we fight so hard, especially when the accusations are false! When I got to the factory, I found a spot in the employee parking lot and made my way to the General Manager’s office as fast as I could.  I found him and in my fakest, calm voice asked, “So where are they all?”  He showed me the search warrant – a legalistic and totally intimidating document, signed by a Federal judge with the ability to lock people up who got in the way.  Our GM explained what he thought was going on.  And I said, “OK, show me.” Together, we walked out to the factory floor.  But before we did, I made a short, important phone call. On our way to see the extent of the “damage” we walked past a small office where one of our supervisors was sitting with two rather large men.  I had watched enough TV shows to know that they were cops.  Only these cops were Feds.  Side note:  I live in Hollywood and there really is a company called “Central Casting”.  FBI agents are all out of Central Casting.  The men are 6’2” tall; invariably handsome; well-educated; smart; armed and dangerous!  The female agents…maybe just a few inches shorter! I stuck my nose into that office and asked “What’s this about?” and to our supervisor I said, “Why aren’t you working?”  At that moment, I could feel the testosterone level rise in the veins of the Feds, who took one look at me and in their nicest TV voices said: “Who the hell are you?” I calmly (yeah, right) said “I am this company’s Vice President of Litigation and Investigations.  I know that you are here with a search warrant and I will help you with that.  But you do not have the right to lock my colleague in this room and interrogate him.  If you have a problem with that, call the United States Attorney downtown.  I just got off the phone with him and he’s expecting your call!”  And to my colleague I said,  “Get back to work!”. I don’t know how high my blood pressure went as the Feds reached in the direction of the government issued side arms (handguns) but I was sure I would be in a jail cell shortly.  I spoke up and said, “Gentlemen, shall we get started.  I can help you with that search warrant now.” I didn’t go to jail.  With some help, they did execute their search warrant but didn’t find what they thought they would find.  The TV trucks lost interest and shut down the antennas. The reporters moved on to the next big story.  The 60 armed agents vanished in time and order was restored. The headlines the next day were: “X is a bad company that does bad things!”  You see someone told the Feds that we had failed to perform a critical test on key components of military hardware.  Only nobody told them that the test was called out in an early draft of the specs but deleted as not required in the final, signed contract documents.  And there never was a retraction saying “Apologies, X is a good company that makes great products to protect us all.”  But those were tough times in our business.  Bounty hunters could blow the whistle on their company and grab a share of the money the government recovered in the case.  I could go on about qui tam litigation, but not here. A few years later, I found myself on a panel with two other lawyers experienced in the dark arts of “White collar criminal defense.”  One of them was our Prosecutor of factory search warrant fame, an Assistant United States Attorney.  He was not armed but was still dangerous.  At one point in the panel discussion, he turned to me and asked, “Barney, I never understood, with all the cases we were looking into, why your company never pleaded guilty.”  I turned to him and said in my most professional and only mildly pissed off voice “Did it ever occur to you that we didn’t because we weren’t?” Needless to say, it had never crossed his mind! There are many lessons here.  The one I rely on most often is that we are better at solving our problems than the 3Ps, but we have to know about them.  That’s why we have (or hope we have) the kind of managers people can talk to; and policies that protect people from retaliation when they raise their hands to voice questions or concerns; and hotlines when all else fails. That’s why you have heard me say “Ethics is a team sport.  We are all in this together!”  

F is for the other 4-letter "F" word

Copyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™ Allow me a few sentences and I will tell you what that other word is!  I promise. Imagine that you are sitting in your office, logged onto your computer when the emails start arriving and the phone starts ringing.  Some of your co-workers at a manufacturing location are worried about one of their colleagues who has been acting strangely.  They worry that he may come in one day and “go postal” (see explanation * below) and they don’t know what to do.  They don’t know who to tell. The other F word is FEAR! You agree to meet with them after hours, off campus.  Six of them show up and tell you how bad things are.  The words LACK of trust keep coming up.  But FEAR is the biggie! An intervention is called for and you reach out to a psychologist you know and have worked with before.  He specializes in industrial situations and is truly spectacular. Together with the site HR folks you organize a group meeting with 20 front line supervisors and the psychologist.  After introductions and some warm ups, he poses this question: “Suppose during the next performance evaluation cycle you don’t give them their written evaluation on the day of their review.  Instead, you give the people you work with their written evaluations  the night before.  That way they can take it home; read it over; think about it; and come in the next day for a deeper, more productive conversation.” The reaction would have been hard to predict.  “Oh, no!  They’ll just get angry and act out violently!” Turns out they were afraid of the people they supervised. And the people they supervised were:

  1. Afraid of them
  2. Worried about their jobs
  3. Concerned about outsourcing
  4. Hearing rumors about the business being sold off
  5. Reading about foreign competition
  6. Afraid of retaliation
  7. And yes, FEAR of violence

FEAR was everywhere!  And it was palpable. A series of workshops about teamwork began to break down barriers.  People began talking to each other…and listening.  It became an on-going process. Progress was slow but it was progress.  And the employee people FEARed would go postal.  He didn’t.  And the FEAR was unfounded.  He was as worried as everyone else! Any FEAR where you work? What will you do about it?  

  • * “Go Postal” is a reference to an actual event that took place in the USA when a post office worker brought a gun to work and shot a number of co-workers. Sadly, the term has become part of the vernacular.
E is for Ethics
C is for Compliance

OK, this is kind of a touchy point with ethics practitioners.  So I am going to vent a little.  You’ll see why in a sentence or two and then you can weigh in with what you think about it. I was talking to a relatively senior business executive about what I do.  He said, “Oh, yeah, you’re the compliance guy.”  I took a deep breath and started to explain.  “No actually, you are.  Because a failure of compliance could mean someone will go to prison and the regulators and prosecutors will come looking for the most senior person responsible for the conduct of the business.  So, in a practical sense, you are the designated defendant.” I have a little experience with that!  Deep in the last century, I started my career out of law school as a white collar, criminal defense attorney.  Now, I tell people I am a recovering lawyer. Now back to that business executive.  Here’s what I told him.

  1. Compliance is all about rules and regulations. It’s hard stuff because it is often said that ignorance of the law is no excuse.  If you didn’t know the law, you should have known it.
  2. Those rules and regulations govern everything that happens in your business from the hiring of workers, to their retention and training, to the cleanliness and safety of the facilities you operate. It’s the licensing requirements to open the doors for business and keep them open.  The export/import controls on your products.  The taxes you pay.
  3. It’s about technical specifications in contracts to build highly sophisticated products for difficult-to-please customers.
  4. I explained that it’s really hard to keep track of all the requirements in the town or city where you do business. The minute you expand to the neighboring town the laws and regulations change.
  5. Now try moving to a neighboring county, state or province where everything you thought you knew is different.
  6. If you are really successful, try expanding overseas. If you are really brave, consider the UK Bribery Act.  It created a new crime of failing to prevent bribery.
  7. Why do you think serious companies have strong legal departments? And armies of highly qualified lawyers/gladiators waiting for your next misstep. This stuff is hard!
  8. Should I go on?

Well, his eyes were starting to show signs of fear.  So I continued. You see, I told him, I am not the compliance officer.  That’s your job and you hadn’t even thought of it that way.  You thought your job was to make money and deliver results to corporate headquarters. He was shallow breathing at this point but he managed to ask “Then what do you do?” I smiled and said “While I am not the compliance guy, I am the ethics guy…at least that’s what folks call me when I show up soon after their latest on-line training course.” And since you asked, “I can keep you out of trouble or I can get you out of trouble!  What’s your preference?  The cost of compliance is high.  The cost of non-compliance is astronomical.  And then there’s that prison thing! In Ethics, we’re all about values and virtues.  We help set the tone and reinforce the important commitment to doing things honestly, with integrity and with respect for others.  And yes, one of those things is serving as a steady reminder that our company has opted to do things the right way.  When we choose ethics, compliance follows.” As some of you who know me have heard me say, Ethics is a team sport!  We are all in this together! Now it’s your turn.  Ethics?  Compliance?  Are they really that different or just two sides of the same coin?  Where will you draw the line?