Monthly Archives: May 2016

Arrested Development: Fighting fraud & corruption in international aid

Arrested Development: Fighting fraud & corruption in international aid

The following interview is with Oliver May.

RB: Oliver, you’ve been specialising in how corruption affects aid organisations. Perhaps you could tell us a little about your background and how you got into that?

OM: It would be a pleasure, Richard. I was the head of counter-fraud for the international aid agency Oxfam GB, where I led and co-ordinated its efforts to reduce fraud and corruption across its worldwide operations – especially fraud, theft, bribery, money laundering, terrorist financing and nepotism. Oxfam worked in some of the most challenging environments in the world, so that was a really rewarding experience. Prior to that, I was an officer in what was then the Serious Organised Crime Agency in the UK, where I worked on a number of high-profile and complex international investigations and operations. I’ve also been a crime analyst, so I found I was able to bring experience from different sides of the law enforcement house – investigation, analysis, intelligence, and so on.

RB: And now you’re an author! Can you tell us a little about the book and how it came about?

OM: Sure. I got tired of having the same circular conversations with stakeholders over and over again. You know – people from programme, donor management, fundraising, or communications, who did not necessarily understand the counter-fraud and corruption agenda. I just wanted to be able to say, ‘here, take this book. Read it, and we’ll have this conversation again in a few days.’ So I went looking for that book, and when I couldn’t find it, I wrote it. There are so many fraud and corruption books for finance, audit and risk people – this is a book for everybody in an international NGO. After all, those are the people raising, managing and spending the funds. So the book unpacks the nature of the risk for international NGOs and how their vulnerabilities commonly arise, busts myths and misconceptions, and sets out an accessible framework that NGOs can apply in order to reduce their risk. The key message of the book is good news – that there is more that we can do about fraud and corruption in the sector than most people realise.

RB: Do you think that international NGOs are different in terms of corruption, then, to private sector organisations?

OM: The sector has its own unique complexion. I think the threats can be similar – no tender process is automatically safe from kickbacks without adequate controls, whatever the organisation. But it does have its own flavour. Take how a lot of NGOs talk about an ‘ethical culture’ as a primary way to curb fraud and corruption, for example. Stop and think about that for a moment – that’s actually quite a complicated aspiration for an international NGO. What do we mean by ‘ethical’ in a global organisation? You might think that someone who recruits their kinfolk for a post is acting out of nepotism, but in some cultures, some might feel that this is the ethical thing to do. Similarly, if you have a moral mission, then this can justify all sorts of behaviour – the ends justify the means. In work to help the least fortunate people on the planet, telling your staff to ‘do the right thing’ rather depends on how ‘right’ is perceived in the circumstances. Across the hundreds of cases that I’ve encountered in NGOs worldwide, which included suspected fraud, theft, bribery and terrorist financing, organisational culture is a recurrent enabler, alongside devolved models of responsibility, high-risk operating models, operational ambition in excess of the available support resources, and dynamic funding chains.

RB: You talk in the book about aid organisations adopting a ‘holistic’ counter-fraud and corruption framework. What do you mean by that?

OM: For many people in the sector, tackling fraud and corruption is still about stacking up procedures and then, when things go wrong, conducting an investigation. But actually, there’s a lot more that can be done than that. A holistic framework is about making sure that we’re dealing with the problem from all angles, using all the available tools, and doing so coherently so that the framework components force-multiply each other. It’s about having dedicated work to deter, prevent, detect and respond to fraud, underpinned by enabling activities such as influencing and communication, sited within cultural development work, and encapsulated by meaningful strategic management.

RB: Are there particular aspects of such a framework that tend to be weaker in international aid organisations, then?

OM: I think that the deterrence agenda is still really under-developed in most, if not all, international NGOs. With the advent of so much behavioural research – think ‘nudge’ – there’s a lot of exciting work that can be done here to lower the risk of people heading down the path to committing incidents in the first place, never mind relying on controls to stop them or pick them up. In the book I suggest a three-stroke way to carry out deterrence work based on the three components of the fraud triangle – it doesn’t have to be complicated. We just need to stop and think about what we’re really trying to achieve and how best to get inside the heads of our employees. Take staff workshops – we talk about ‘awareness-raising’ but really what we should be doing is communicating for change. Telling people about red flags and reporting systems have their place, but it’s challenging myths and changing perspectives that will really deliver.

RB: So you’ve now moved on from Oxfam, what’s next for you, how can people get in touch and where can they get the book?

OM: The book is published by Routledge in hardback and e-book format, so you can get it directly from the Routledge website, Amazon and other retailers. I’m now based in Sydney, Australia and I’ve been enjoying blogging on fraud and corruption in the humanitarian and global development sector at – I’d be delighted if those interested in finding out more came on over and had a look. They can contact me through the website too and I tweet at @oliverbmay. Thanks so much Richard for your interest and taking the time to find out more, it’s always a pleasure to engage with you.

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Joe Spinelli on Corruption Risk & FCPA Due Diligence

In part II of our interview, Joe Spinelli, Senior Managing Director, Kroll, addresses a number of issues which were shared in the  Kroll-Ethisphere 2016 Anti-Bribery and Corruption Benchmarking Report. In this interview, Joe focuses on:

  • The role of the Board and CEO in paying an active role in compliance programs and initiatives.
  • The perils of using contract provisions in third party management without complementary ethics and compliance based training.
  • The challenges of a centralized compliance function.

In the concluding part of the interview, Joe reflects on areas of progress and continued compliance challenges since Kroll started publishing the Benchmark Reports in 2011.

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Joe Spinelli on the Kroll & Ethisphere Anti-Bribery & Corruption Report

In part one of a two-part series, Joe Spinelli,  Senior Managing Director at Kroll in the Investigations and Disputes Practice, addresses a number of findings as referenced in the Kroll-Ethisphere “The Year of Global Expansion and Enforcement, 2016, Anti-Bribery and Corruption Benchmarking Report.”

The issues which Joe addresses include:

  • The level of engagement at the Board and C-Suite level with respect to anti-bribery compliance.
  • The continued challenges of limited compliance resources and the constraints of “doing more with less.”
  • The impact of the 2016 DOJ FCPA Enforcement Plan and Guidance.
  • The lack of focus on third party monitoring after initial due-diligence.

Joe’s experience in the field spans thirty years, including work as an  FBI  Special Agent on the in the “Abscam” investigation,  and as the first Inspector General of New York State. Hear his reflections on the report, and the current corruption challenges which persist in the field.

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The Pen is Mightier than the Compliance Sword

The Pen is Mightier than the Compliance Sword

Nicole Rose brings a breath of fresh air to compliance. 6 years ago she swapped her legal practicing certificate for her pen and has been thriving ever since.

She founded Create Training almost 3 years ago, and over this time has penned over 150 animated compliance training videos. Her work reaches 100’s thousands of learners worldwide.

As a regular contributor to leading compliance publications, Nicole has written about everything you wouldn’t expect to read about in relation to compliance. She passionately believes that creativity, cartoons, animation, emotions, and neuroscience are all essential ingredients in any compliance diet. She is now serving up some much needed creative inspiration with her new book, Compliance With Attitude.

Here are a few questions to Nicole about her new book and her methods, in general.

RB: Nicole you were once a lawyer and compliance specialist. Why did you change?

NR: I like to think that I simply evolved.  I am still a lawyer and spend many hours each week researching and putting myself into the legal shoes needed to deconstruct a case. But I was tired of stopping at the ‘what’ i.e. what had happened in a particular case and what needed to be done in order to mitigate the damage. I wanted an ongoing solution that really helped people to change behaviors rather than just try to avoid getting caught, as had been my experience up until that time. I always loved art and believed that the pen was mightier than the compliance sword, so decided to incorporate my pen into what I was doing.

After doing face-to-face training around the world with a whiteboard and some hastily drawn pictures, I realized that people weren’t interested in the quality of the art, they were just interested in seeing an image come to life to explain something. After that, I started making some short animated videos and the feedback was tremendous. I couldn’t believe the delight and interest in compliance that an animation could bring to people.

RB: Given you produced a fully illustrated book on compliance training in addition to all the other work and writing you produce, it seems you may have a magic formula for working at speed. Can you share?

NR: Many people don’t start a creative endeavor because they think they don’t have the technical expertise. Before I made my first animation, I had never made a video. Before I wrote a book, I had never published a book. My advice: find a non-interrupted space, craft the main body of the work in one go if possible and then research every which way you can so you can finish it. The main body is actually the fastest thing to put together and will keep you motivated for the longer more technical part of the process.

RB: How did the idea for the book actually arise?

NR: I joke that my pen came to me one day and asked me to write instead of just draw. But that’s basically what happened. I was inspired to share my ideas so I started writing crazy articles about compliance with heart, compliance and neuroscience and compliance and animation. I was amazed when people wrote to me telling me how much I inspired them. I realized that there were loads of compliance professionals who, like me, wanted to be more creative in their compliance role but maybe didn’t have the confidence, methodology or technical expertise to do so. I believe that creativity is a mindset rather than a talent and wanted to teach people to develop the right mindset and methods to be more creative in their roles.

RB: So what’s in the book?

NR: I found there was no one single book on creativity, compliance and producing your own training, so I created it. This book is essentially a toolkit to create your own great training. It’s packed with tips and ideas on how to inspire people and relate to your audience, how to engage people with short training, how to animate people (literally bring them to life) and loads more. I basically wrote the book I wish I had read when I went into compliance many years ago.

RB: I understand that you are currently offering this book for free. How can people get hold of it?

NR: Next week it will be sold on Amazon. I want to share my ideas as widely as possible, so I’m giving away the EBook version. It includes links to all of my tools and videos and can be downloaded here.

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FCPA (and my)  Failure

FCPA (and my) Failure

I haven’t thought too much about failure lately, until I read Roy Snell’s piece, “We Are All Victims…Except Richard Bistrong.” Roy’s article took me by surprise, as his blog piece addresses a primary foundation of my work: embracing failure, and making sure to be transparently clear that I was no victim- to my former employer, to culture, or even to drug addiction.  I can’t get to the lessons of how my crucible might be a learning moment for others if that doesn’t come across unfettered and unfiltered.

Thank you, Roy.

For those who have heard me speak, you probably recall my ‘pause,’ right at the start, where I share one single message: “There is only one person responsible for Richard Bistrong going to prison, and that’s Richard Bistrong.”  I think that’s what Roy means when he says that “(Richard) is one of the most honest, formerly dishonest, guys I have ever met.” You see, the failure that I own, and own up to, is the failure that can be a potential opportunity for others to think about their own policies and processes, and specifically, how they address real-world corruption risk.

Does this come easy? Of course not- talking to friendly groups of strangers about my criminal conduct is not exactly what I thought I would be doing when I received my Master’s Degree at the University of Virginia. So why is it so hard for us (me) to admit our mistakes, even one’s that don’t end up with a prison sentence? There is an engaging article in the Harvard Business Review with the same question:  Why Is It So Hard for Us to Admit Our Mistakes by Karen Firestone, and it starts out with a nod to the obvious: “no one finds it easy to own up to a mistake-particularly a costly one.” It’s also well stated in another HBR article “Increase Your Return on Failure,” where authors Julian Birkinshaw and Martine Haas share that, “reviewing past problems isn’t just tedious; it’s painful. Most of us would prefer to invest our time in looking forward, not back.” Indeed.

Firestone gives a few reasons why it’s so difficult, including that “many people are afraid of appearing incompetent.” Perhaps that’s an advantage of being a convicted felon- I left the remnants of my ego at the Prison Camp. Getting locked up demonstrates the ultimate incompetence- as a person, as an employee, and as a family member. I don’t have to be on the defensive about that, or fear it, and it’s actually liberating,  albeit from a very dark experience. It allows me to use that part of my past, without being shameful about it, as a forward leaning pivot point to current challenges. Being almost nine years clean and sober (May 18th), reconnected with my loved one’s, and engaging positively with society and my work environment, also allows for a firm embrace of the past without throwing down Roy’s victim card.

As Birkinshaw and Hass share, “when you accept and own up to an error, it becomes much easier to pinpoint its origination and analyze its progression through the system,” which I think complements Roy’s reflection that “to improve our chances of being a principled-based society, we have to stand up to the victimization crowd.  Until we do, our effort to improve society is going to be very slow.”

I agree with Birkinshaw and Hass when they state that “while it’s useful to reflect on individual failures, the real payoff comes from when you spread the lessons across the organization.” They recommend a “triple F” review- do it fast, frequently and stay forward-looking. Try it, and stay away from Roy’s “single V”- “victimization.” It helps no one, and you might lose what could be immeasurable value from your mistakes and failures.

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Dick Cassin: ‘The FCPA Should Win the Nobel Peace Prize’

Dick Cassin: ‘The FCPA Should Win the Nobel Peace Prize’

“Richard L. Cassin” is one of the best-known bylines in the compliance field. He’s been called the Dean of the compliance bloggers.

He founded the FCPA Blog almost nine years ago. Incredibly, he has personally written nearly 3,000 posts since then and the FCPA Blog has published about 5,500 posts overall.

In addition to his writing, Dick serves as editor-in-chief of the FCPA Blog, which reaches more than 100,000 unique readers every month.

He agreed to answer some questions.

* * *

What’s a typical workday like for the editor-in-chief of the FCPA Blog?

RLC: We’ve had more than 250 guest contributors. I deal with each one. What they have in common is an interest in corruption, enforcement, and compliance.

Lawyers, compliance professionals, investigators, professors, students, bankers, NGO workers, sociologists, people from government, law enforcement officials, HR experts, auditors, scientists, you name it. The variety is fantastic.

I’m usually at my workspace in Charlottesville, Virginia by about 6 am, Monday through Saturday. I start with a green smoothie, then work till mid-afternoon. Then it’s time for some exercise. The days fly by.

Green smoothie?

RLC: Let food be thy medicine and medicine thy food . . . .

Is that code for being a vegan?

RLC: Yes, for the past 10 years.

I’d like to hear more about that. Maybe later? Back to the FCPA Blog. How would you describe it?

RLC: I think of the FCPA Blog as a community bulletin board. It’s a place – the water cooler — where anyone interested in the topic can meet and have a chat. It’s also a source for news and commentary about corruption, enforcement, and compliance.

The tone of the FCPA Blog is informal. Was that intentional?

RLC: Yes it was. My original idea was to make information about the Foreign Corrupt Practices Act accessible to anyone. I think the FCPA – the statute itself — is one of the noblest, most interesting laws ever enacted, by any country. I wanted to share that idea, but not through law review articles. I leave those to the scholars (who I admire, by the way).

You once called the FCPA “idealistic, impractical, naïve, and so American.” Do you still believe that?

RLC: Absolutely. Beyond that, the FCPA was also a turning point in history. A prominent lawyer from Nigeria was in Singapore for an International Bar Association conference. I was still living there. He asked to meet for coffee. When we met, he said: “I just wanted to tell you how much the Foreign Corrupt Practices Act means to the people of Nigeria. Because of the FCPA, we actually believe we can fight corruption.” I’ve heard the same thing from people in Indonesia, Colombia, and other places. The FCPA should win the Nobel Peace Prize.

Speaking of prizes. You’ve been named multiple times to Ethisphere’s list of the 100 most influential people in business ethics. . . . .

RLC: . . . . Sorry to interrupt. But I want to be clear: The FCPA Blog is a team effort and not a one-person show. The board of editors keeps the blog moving forward. The guest contributors show their support by allowing us to publish their work. We have sponsors who help us keep access to the FCPA Blog free for everyone. And of course, without the readers, there wouldn’t be an FCPA Blog.

But recognition from peers and colleagues is an honor. I’m enormously grateful for the recognition from Ethisphere. It means the FCPA Blog is reaching people. And the fact that such a list even exists is a wonderful thing. It draws attention to business ethics. That’s great.

Do you ever get tired and feel like you need a rest from the FCPA Blog?

RLC: There’s always lots of encouragement. Some readers take the time to write to me. They say they enjoy reading the FCPA Blog, keep up the good work. Some even say the FCPA Blog changed their life somehow. It doesn’t get any better than that. So I’m grateful to be part of the FCPA Blog. I can’t imagine doing anything else.

What’s next for Dick Cassin and the FCPA Blog?

RLC: I’m excited about our upcoming event in New York in October. The FCPA Blog on wheels!

Dick, thank you for your time today. And keep up the good work!

RLC: My pleasure. Thank you.