Farewell to Len Dawson and triage into compliance | Thomas Fox – Compliance Evangelist

Lenny Dawson died yesterday. He was the Kansas City Chiefs’ winning quarterback in Super Bowl III, after being the same team’s losing quarterback in Super Bowl I. A graduate of that little-known football powerhouse Purdue, he was six once All-star and known, according to his NYT obituary, as a “punctual passer”. He was elected to the Pro Football Hall of Fame in 1986. In his playing career, I knew Dawson, as one of the first co-hosts, all with Nick Buoniconti, from 1978 to 2001 of the HBO program. Inside the NFL. Dawson is perhaps less well known for one of the greatest professional football photos ever taken that appears with this blog.

I thought Dawson’s ability to read defenses was a great way to introduce triage discussion into your compliance program. In October 2021, Deputy Attorney General Lisa Monaco announced the “Monaco Doctrine” regarding white-collar enforcement actions, which includes those under the Foreign Corrupt Practices Act (FCPA). Under the Monaco doctrine, the requirement of the Yates memo for the investigation and surrender of all information discovered about potential criminal activity was required for a business to qualify for credits and rebates available under the FCPA Enforcement Policy. This announcement and subsequent court cases have put more pressure on compliance professionals in the investigative phase of any FCPA or other federal matter. This document will outline some of the key steps in dealing with this burden.

Triage of allegations reported internally

Anyone who has watched the M*A*S*H movie or TV show understands the need for triage. In a hospital setting, triage is the process of prioritizing treatment for patients based on the severity of their condition. In the 2020 FCPA Resource Guide, 2n/a Edit, there is a short but succinct statement, “once an allegation is made, companies must have in place an effective, reliable and properly funded process to investigate the allegation and document the company’s response , including any disciplinary or corrective action taken”. This is addressed in more detailed language in the 2020 Corporate Compliance Program Assessment Update. Under Part 1, Section D. Confidential Reporting Structure and Investigation Processhe stated in part, Properly delineated investigation by trained personnel—How does the company determine which complaints or red flags warrant further investigation?

Given the number of ways information about breaches or potential breaches can be communicated to government regulators, having a robust triage system is an important means of separating the wheat from the chaff and allocating the right number of resources with a compliance issue. An important area is initially determining whether to bring in outside counsel to lead an investigation and what resources you want or need to devote to an issue. You literally have to “crush the tires” of any allegation or information in order to know the circumstances before you before making any decisions. You can achieve this through a robust triage process.

The five-step process includes the following:

  • Step 1. These are allegations that present a low level of threat and do not suggest a failure of internal controls. Advice gathered at this stage has no financial or reputational impact.
  • 2nd step. These allegations are more serious in nature and often point to deficiencies in the design of internal controls. Examples include business rule violations such as recurring employee theft or expense report falsification patterns.
  • Step 3. These allegations are serious in nature, generally involve the override of internal controls, and therefore constitute at least a serious deficiency. But they have minimal impact on the company’s financial statements or reputation. More serious allegations in this category include fraud, embezzlement and corruption involving employees or middle managers.
  • Step 4. These are serious allegations that could affect the completeness and accuracy of the audited financial statements and could indicate a material weakness in internal controls. However, they do not appear to involve any member of the management team.
  • Step 5. These are serious allegations that implicate one or more members of the management team or are serious enough to damage the reputation of the company. Receipt of allegations at this stage typically places the company in crisis management mode and may result in restatement of audited financial statements or increased regulatory scrutiny.

By using such an approach, you will be able to respond more quickly and effectively to any allegation that arises. Of course, as new information is developed during an investigation, the question can be moved up or down this scale. Such an approach is also important for a company’s outside investigative counsel to partner more with the entity to help reduce costs. Outside counsel can work to build confidence that company investigators could conduct a wide-ranging or far-reaching investigation. This trust would assist outside counsel in any discussions they may have with the DOJ during the course of an investigation.

Proper triage of allegations has several different impacts for any issue that comes to the attention of compliance. Obviously, this will help you first determine the seriousness of the matter. From there, you can allocate an appropriate level of resources. It will also help you in your discussion with the DOJ if you should go down this route. Finally, in the situation where facts arise, it provides the required documented evidence that a process was followed so you can show the government that a claim was properly delineated, as required by the 2020 update. But the key is to be prepared, not only by having your investigation and reporting protocols in place before an allegation arises, but also by doing the appropriate triage so that you have an initial understanding of what you are up to. might face.

To learn more about triage in your compliance program, check out the iSight sponsored webinar, Everything you need to carry out your E&C investigations Tuesday, August 30 at 2 p.m. ET. Best of all the event is available at no cost. For more information and registration, click here.

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