Copyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™ barney@ethicslinellc.com
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!”
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.