On The Oregon Trail And Expectations In An Investigation Protocol

by Thomas Fox
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Oregon TrailOn this day in 1843, a massive wagon train, made up of 1,000 settlers and 1,000 head of cattle, set off down the Oregon Trail from Independence, Missouri. Known as the “Great Emigration,” the expedition came two years after the first modest party of settlers made the long, overland journey to Oregon. The Great Immigration followed the Sante Fe Trail for some 40 miles and then turned northwest to the Platte River, which it followed along its northern route to Fort Laramie, Wyoming. From there, it traveled on to the Rocky Mountains, which it passed through by way of the broad, level South Pass that led to the basin of the Colorado River. The travelers then went southwest to Fort Bridger, northwest across a divide to Fort Hall on the Snake River, and on to Fort Boise, where they gained supplies for the difficult journey over the Blue Mountains and into Oregon. The Great Emigration finally arrived in October of that year and the participants had completed the 2,000-mile journey from Independence in five months.

This week at Compliance Week 2014, I moderated a panel entitled Investigations Gone Global, Not Haywire. One of the panelists, Stephen Donovan, Chief Ethics and Compliance Officer, International Paper Company, said that one of his key reasons for setting out an investigation protocol was more than simply having a plan or guideline in place so that there would be consistency in investigations. The other key reason was to set expectations for all persons who might be involved in the investigation. The participants in the Great Emigration had a route to follow but that was about it. When it came to expectations, I think there were very little except hardship and the hope for a better future.

I think that one of the key lessons to be drawn from the ongoing Wal-Mart Foreign Corrupt Practices Act (FCPA) matter is that back in the 2006 time frame, when the corporate office was made aware of allegations of bribery and corruption regarding its Mexican subsidiary, the corporate office either did not have an investigation protocol in place, or perhaps even worse, it had one and disregarded it when the allegations bubbled up to Bentonville. But if the expectations had been set up beforehand, perhaps there would have been action taken to resolve the matter during that time frame and not later.

I have heard Jackie Trevino, Senior Manager, Corporate Compliance at Fluor Corporation, present the Fluor investigation protocol which consists of the following five steps (1) Opening and Categorizing the Case; (2) Planning the Investigation; (3) Executing the Investigation Plan; (4) Determining Appropriate Follow-Up; and (5) Closing the Case. I recognize that if a case of significant bribery or corruption is uncovered that there may be more or additional steps that you may need to take. However if you follow this basic protocol, you should be able to work through most investigations, in a clear, concise and cost effective manner. Furthermore, you should have a report at the end of the day which can stand up to later scrutiny if a regulator comes looking. Finally, you will be able to document, document, and document, not only the steps you took but why and the outcome obtained. But, as Donovan noted, it also sets the expectations of all involved.

Step 1: Opening and Categorizing the Case. Under this first step, you should categorize the ethics and compliance violation. You should notify the relevant individuals, including those on your investigation team and any senior management members under your notification protocols. After notification, you should assemble your investigation team for preliminary meetings and assessments. Step 1 should be accomplished in one to three days after the allegation comes into compliance, either through your reporting structure or other means.

Step 2: Planning the Investigation. After assembling your investigation team, you should determine the required investigation tasks. These would include document review and interviews. If hard drives need to be copied or documents put on hold or sequestered in any way, or relationships need to be analyzed through relationship software programs or key word search programs, this should also be planned out at this time. These tasks should be integrated into a written investigation or work plan so that the entire process going forward is documented. Also if there is a variation from the written investigation plan, such variation should be documented and an explanation provided as to why there was such a variation. Lastly, if international travel is involved this should also be considered and planned for as part of this step. Step 2 should be accomplished within another one to three days.

Step 3: Executing the Investigation Plan. During the course of this step the investigation should be completed. I would urge that the interviews not be effected until all documents are reviewed and ready for use in said interviews. Care should be taken to ensure that an appropriate Upjohn warning is issued and that the interviewee clearly understands that whoever is performing the interview represents the company and not the person being interviewed, whether they are the target of the investigation or not. The appropriate steps should also be taken to preserve the attorney-client privilege and attorney work product assertions. Step 3 should be accomplished within one to two weeks.

Step 4: Determining Appropriate Follow-Up. At this step the preliminary investigation should be completed and you are ready to move into the final phases. In some investigations, it is relatively easy to determine when the work is essentially complete. For example, if the allegation is both specific and narrow, and the investigation reveals a compelling and benign explanation for the conduct alleged, then the investigation typically is complete and you are ready to convene the investigation team and the relevant business unit representatives. This group would decide on the appropriate disciplinary steps or other actions to take. Step 4 should be completed in one day to one week.

It must be cautioned that at this step, if there are findings of specific or discrete allegations of corruption and bribery, a decision must be made as how to handle such findings going forward.

Step 5: Closing the Case. Under this final step, you should communicate the investigation results to the stakeholders and the case report should be completed. Everything done in the above steps should be documented and stored, either electronically or in hard copy form together. Step 5 should be completed in one day to one week.

With the growing number of reports to the Securities and Exchange Commission (SEC) Whistleblower program under Dodd-Frank, companies are under increasing pressure to get up and running quickly on any claim of bribery and corruption that is brought forward. By using an investigation protocol, you will have a ready-made process in place to start from. If your company does not have such a protocol I would suggest that you tailor this process to fit the needs of your company. It will help set the expectations of everyone involved.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Thomas Fox, Compliance Evangelist | Attorney Advertising

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