Because of my ongoing employment negotiations with the vendor, I knew that a recusal was required, so when I attended project meetings I did not

Transcription

1 Because of my ongoing employment negotiations with the vendor, I knew that a recusal was required, so when I attended project meetings I did not listen, when people asked me for project advice I did not respond, and when the vendor solicited contract modifications, I called in sick. I knew I was recused.

2 The free steak dinners did not influence my official decision-making. I prefer seafood.

3 It may look like it was a conflict of interest, but trust me, it really was not.

4 The gift from the vendor did not violate company ethics policies because we agreed that it would be delivered after the deal was signed.

5 I know you re thinking this was nepotism, but after reviewing all the applications and doing some interviews, I determined that my daughter was really the best qualified candidate.

6 WHOSE SIDE ARE THEY ON? Ken Dieffenbach, CFE Senior Special Agent U.S. Department of Justice Office of the Inspector General Arlington, Virginia

7 Former Member of Virginia House of Delegates Sentenced to 114 Months in Prison for Bribery and Extortion Source: Excerpted from August 12, 2011, Press Release, U.S. Attorney s Office for the Eastern District of Virginia Philip A. Hamilton was elected to the Virginia House of Delegates in In January 2007, he introduced a budget amendment to appropriate $1 million for a Center for Teacher Quality and Educational Leadership at Old Dominion University. Prior to, and after, offering this amendment, Hamilton negotiated with ODU for a $40,000 per year position as the Director of the new program. ODU advertised the new position, received three applicants, interviewed none, and hired Hamilton for the position which he held for two years. He collected $80,000. In 2011, he was sentenced to 114 months in prison for bribery and extortion.

8 FBI Employee Accepted Illegal Gratuity An FBI employee was responsible for negotiating, reviewing, and making recommendations regarding a blanket purchase agreement valued at nearly $2 million for the purchase of upgraded shredders. While in that capacity, the employee reviewed and approved the bid of an undisclosed company (Company A) and subsequently served as the liaison for all FBI field offices to submit their purchase requests to Company A for new shredders. Shortly after visiting the company and approving its machines for purchase, the employee accepted an offer from Company A for him and his family to join Company A s top executives and sales people on a Caribbean cruise over the New Year s holiday. The total value of the gratuity was approximately $7,500, including airfare and lodging. In 2008, the employee pled guilty and was sentenced to 2 years probation and ordered to pay a $5,000 fine. Source: Excerpted from February 12, 2008 Press Release, DOJ Criminal Division

9 Fidelity Pays $8 Million to Settle Gratuities Allegations Best Execution rules require mutual funds to put client interests first when deciding on how to invest their funds. The Financial Regulatory Authority found evidence at a brokerage firm that some employees had provided gifts to some Fidelity employees, including Peter Lynch. An investigation revealed that from January 2002 to October 2004, over a dozen Fidelity employees accepted gifts such as Super Bowl tickets, a $160,000 bachelor party, Bermuda vacations, and U2 concert and Ryder Cup golf tickets. Fidelity agreed with the Securities and Exchange Commission to pay $8 million to settle the allegations and to also pay over $42 million to the mutual funds that might have been impacted by this practice. Source: Summary of article in March 2008 Washington Post by Carrie Johnson

10 WHOSE SIDE ARE THEY ON?

11 1 Assessment of the Allegation/Planning What is the standard? What is the real problem? What is your theory? Why plan? Talk to them first?

12 2 Analysis of the Evidence Witnesses and documents Confirmation bias What do you know, and how do you know what you think you know? Timelines and technology

13 3 So What? Loss Gain Exposure

14 4 Communicating the Facts Begin at the beginning. Who is the reader or audience? Why share the dirty laundry? Just state the facts or draw conclusions?

15 5 Prevention What went wrong? What went right? How can we sharpen the sword? Retrain Re-communicate policy Create new policy Rewrite policy Review/update internal controls

16 WHOSE SIDE ARE THEY ON? Ken Dieffenbach, CFE Senior Special Agent U.S. Department of Justice Office of the Inspector General Arlington, Virginia