The Corruption Files

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike explore the Barings Bank scandal

The focus is on the actions of Nick Leeson, a trader who single-handedly bankrupted the historic institution. The discussion highlights the critical mistakes made by the bank, including a lack of oversight and the dangerous combination of trading and settlement roles. The podast also explores the broader implications for compliance and risk management in financial institutions, emphasizing the importance of segregation of duties and the pressures that can lead to unethical behavior.

Key Highlights:

Memorable Quotes (all from Mike DeBernardis)

“Nick single-handedly bankrupted the oldest merchant bank.”

“He was a golden boy trader making tons of money.”

“Barings Bank was sold for one pound.”

Resources:

Mike DeBernardis on LinkedIn

Hughes Hubbard & Reed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike explore the infamous Crazy Eddie scandal, one of the most audacious corporate frauds in history.

The scheme, orchestrated by Eddie Antar and his family during the 1980s and 1990s, involved tax evasion, inventory inflation, and money laundering through a method known as the ‘Panama Pump.’ They defrauded various stakeholders, including customers, bankers, investors, and governmental bodies, ultimately leading to Eddie’s extradition from Israel and imprisonment. This episode dissects the scandal’s rapid unraveling post-IPO, focusing on flawed corporate governance and oversight. By examining the pitfalls of family-controlled businesses and the lack of transparency exemplified by the Crazy Eddie and Boar’s Head Listeria scandals, the hosts underscore the critical importance of checks and balances in corporate structures.

Key Highlights:

Resources:

Mike DeBernardis on LinkedIn

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike explore a unique corporate scandal from early 2000s Hong Kong involving Hutchison Whampoa Limited.

Unlike typical cases, there were no allegations of bribery, corruption, or significant financial penalties. Instead, the scandal revolved around the complex corporate governance issues and the control wielded by billionaire Li Ka-shing. The conversation delves into the importance of robust corporate governance, particularly in safeguarding the interests of minority shareholders in companies dominated by powerful individuals or families.

Tom and Mike highlight the expanding role of compliance professionals in overseeing corporate governance, especially with the rise of Environmental, Social, and Governance (ESG) criteria. They discuss the importance of board independence, the need for effective internal controls, and how compliance professionals can aid in board training. With compelling examples, such as the interlock of directors in the energy sector and the Bluebell Ice Cream scandal, the episode provides a thorough insight into how corporate governance issues can impact reputations and operational integrity.

Key Highlights:

Resources:

Mike DeBernardis on LinkedIn

HughesHubbardReed

Tom Fox

Instagram

Facebook

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike take a deep dive into the Bre-X mining scandal of the mid-1990s. Tom and Mike explore the fraudulent gold discovery announced by the Canadian company in Indonesia, which led to a massive media frenzy, skyrocketing stock prices, and eventually, a colossal financial collapse. The discussion includes the scandal’s sensational aspects, lack of individual prosecutions, and the regulatory responses that followed. Fox and DeBernardis also examine the greed and desperation driving the fraud and draw vital compliance lessons for today’s professionals.

Key Highlights:

Resources:

Mike DeBernardis on LinkedIn

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

What is stranger than fiction? The stories of worldwide corruption.

In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike take a deep dive into the Savings and Loan (S&L) crisis of the 1980s.

This scandal, which cost the U.S. between $150 and $200 billion, serves as a powerful case study on the consequences of deregulation. Factors like legislative changes, poor management, fraud, and economic pressures all contributed to the collapse of over a thousand S&Ls. Notable cases, such as the Lincoln Savings and Loan scandal involving Charles Keating, highlight the systemic issues that plagued the industry. The episode emphasizes the importance of regulatory oversight, ethical leadership, and strong internal controls to prevent future financial crises.

Key Highlights:

Resources:

Mike DeBernardis on Linkedin

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws. In this episode of Season 2, Tom and Mike take a deep dive into one of the seminal scandals of the 20thcentury, the Teapot Dome scandal.

The infamous Teapot Dome scandal occurred during Warren Harding administration. Tom and Mike take a deep dive into a historical overview of the event, detailing steps taken by key figures like Albert Fall, who leased federal oil reserves to his associates without competitive bidding, resulting in massive corruption and eventual convictions. The discussion highlights the scandal’s significant impact on U.S. governance, including the first conviction of a former cabinet member, and underscores enduring compliance lessons relevant to modern-day corruption cases.

Key Highlights:

Resources:

Mike DeBernardis on Linkedin

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike take a deep dive into the sordid history of the Bank of Credit and Commerce International (BCCI) (AKA Bank of Crooks and Criminals International).

BCCI was founded in 1972 to facilitate banking for developing countries. BCCI quickly devolved into a hub for money laundering, terrorism financing, and regulatory evasion. They discuss the bank’s complex web of shell companies and insider loans and how a 1991 investigation led by Senator John Kerry exposed these illicit activities.

The episode also highlights the involvement of notable figures like Clark Clifford and Robert Altman in BCCI’s operations and the subsequent legal battles they faced. Finally, the hosts examine the long-lasting impact of the BCCI scandal on global and U.S. banking regulations, including the establishment of stricter anti-money laundering laws and enhanced international cooperation.

Key Highlights:

 Resources:

Mike DeBernardis on LInkedIn

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard, discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws.

In this episode of Season 2, Tom and Mike take a deep dive into the historical case of Tyco, a quintessential example of dot-com era excess.

Tom and Mike discuss Tyco’s journey from a small semiconductor company to a corporate giant under CEO Dennis Kozlowski. Kozlowski’s aggressive growth strategies and extreme personal expenditures, such as a $6,000 shower curtain, became infamous. The discussion covers fraudulent activities, including unauthorized bonuses and misuse of loan programs, ultimately leading to Kozlowski and CFO Mark Swartz’s convictions.

The episode also examines the implications for corporate governance and the sweeping changes in third-party risk management prompted by the scandal.

Key Highlights:

 Resources:

Mike DeBernardis on LInkedIn

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

Mentioned in Podcast

Taking Down the Lion by Catherine Neal

How Compliance Saved Tyco by Joe Mont

What is stranger than fiction? The stories of worldwide corruption. In this podcast series, co-hosts Tom Fox, the Voice of Compliance and Mike DeBernardis, partner at Hughes Hubbard discuss some of the most audacious corruption cases in anti-corruption enforcement. More importantly, they will discuss the lessons learned on what your organization can do to prevent running afoul of international anti-bribery laws. In this first episode of Season 2, Tom and Mike review the Lockheed corruption scandal which led directly to the passage of the FCPA. 

The discussion covers the significant bribery and corruption charges that led to the creation of the Foreign Corrupt Practices Act (FCPA). The hosts explore the international political fallout from the scandal, its impact on various countries including Japan, Italy, and the Netherlands, and the consequences for Lockheed. The episode highlights how the case influenced the development of anti-bribery laws worldwide and the roles played by figures like Stanley Sporkin in shaping these regulations. The conversation also touches on the ongoing challenges in combating corruption in the aerospace industry and its global implications.

Key Highlights

·      The Lockheed Scandal: An Overview

·      High-Level Corruption and Its Unveiling

·      International Repercussions of the Lockheed Scandal

·      The Birth of the FCPA

·      Modern Implications and Compliance

Resources

Mike DeBernardis on LInkedIn

HughesHubbardReed

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

Establishing trust can greatly affect the outcome of a case.

Thomas Fox and Michael DeBernardis talk about ABB’s 2022 bribery case in South Africa, how self-disclosure benefits any situation, the DOJ’s approach on cracking down recidivists, choosing the right people for your team, and being wary of waivers.

▶️ The ABB Settlement with Thomas Fox and Michael DeBernardis 

Key points discussed in the episode:

(00:00:29) Thomas lays out the facts of the ABB settlement. Michael points out the DOJ’s plans for penalizing recidivists and ABB’s biggest compliance misstep.

(00:07:07) Thomas emphasizes the importance of compliance oversight, being vigilant of billing in high-risk jurisdictions, and the benefit of ABB’s “almost” self-disclosure.

(00:12:08) Michael discusses the impact of trust and incentivizing other recidivists to come forward and the risks of going off of real-time information.

(00:18:27) Thomas mentions how having someone with experience concluding resolutions in the DOJ can make a difference. Even with a fairly low penalty, ABB is still required to report on its compliance program.

(00:24:22) Michael prefers having an independent monitor in place. However, he highlights ABB’s trust in their team to do a thorough job of reporting.

(00:27:31) Michael gives credit to ABB’s swift actions and extensive remediation, describing the DOJ’s outcome as “threading the needle”. Thomas believes the case is still a win for compliance. Michael drives home how doubling down on compliance pays off.

----------------------------------------------------------------------------

Do you have a podcast (or do you want to)? Join the only network dedicated to compliance, risk management, and business ethics, the Compliance Podcast Network. For more information, contact Tom Fox at [email protected].