Controls and culture redux

“Weatherford to Pay $253 Million Fine,” Wall Street Journal, November 27, 2013 B2 http://on.wsj.com/1iTri4A

“A Service tale of illicit kale, of whisky and women wild.” (The Ballad of Yukon Jake by Edward Paramore, Jr.)http://bit.ly/1hiv88c

It’s a familiar story.  Oilfield service company settles FCPA and trade sanction allegations. Allegedly paid foreign officials bribes and travel and entertainment expenses (primary offense) and created false books and records to hide the costs (secondary offense).  Also penalized for not cooperating with the investigation.  Alleged failure “to set up an effective system to detect and prevent corruption.” Really?  Really?

Lessons:  bad environment (overseas, some sketchy countries) means higher risk; bad culture (bribes normal course of business) will bite you; red flags ignored (agent refuses to sign anti-bribery contract; use of code names) can haunt; rapid expansion raises risks; lack of internal controls precedes violations of law; the books and records provisions of the FCPA have real teeth.

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Filed under Business Case, Compliance, Controls, Culture, Governance, Internal controls, Legal, Requirements, Risk, Third parties

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