Just like the mothers of the 1960s praying that they could find one example of a child with rickets or scurvy (i.e., "This is what will happen to you if you don't eat your broccoli."), we, the lawyers tasked with or accountable for compliance and risk management, wandered around inventing sometimes effective, sometimes not-so-effective, hypothetical characters who fell into trouble because of ethical lapses and compliance failures. While the holiday season is already a faded memory, the man in the black fedora, Jack Abramoff, has brought all seeking an example of the perils of compliance and ethics issues a living non-hypothetical and an opportunity to improve our organizations in the public policy and political advocacy arenas.
I first noted an aspect of this phenomenon (the end of the need for a hypothetical) in an absurd discussion with a general counsel on how to follow the spirit and letter of applicable ethics laws in structuring a presentation to the policy staff of a governor on the topic of early childhood education. The conclusion was that in the "Post-Abramoff Era" a lunch briefing in the dead of winter to senior state policy advisors looked too much like a golf outing for members of Congress in the United Kingdom; hence, the positive dialogue was not worth the risk. If the example of Jack could derail a simple briefing, surely such power could be used for positive outcomes. In fairness, the general counsel did have a point: the demographics of certain sections of Boston (the proposed location for the briefing) and the staff of the St. Andrews Golf Club are similar. Regardless of the varying merits of this or any other situation with ethics and compliance issues, counselors now need not look for a hypothetical - just turn to the facts and facets surrounding Jack.
For those who have blissfully paid no attention to the stories relating to Mr. Abramoff, these basics are all you need:
1. He is a real person who is now in very real trouble,
2. He had real clients,
3. He had limited accountability to his clients' legal division or in-house attorney,
4. His clients are now paying a price in damage to their reputations that would be very hard to estimate,
5. None of the facts reference robust client-driven compliance and ethics programs, and
6. Most agree that even the most basic of compliance programs would have drawn attention to Mr. Abramoff's activities before they became news (c.f., his abrupt departure from a national law firm in 2001).
General counsels and those with similar responsibilities, internal to a corporate structure, have a unique opportunity to leverage the publicity of Abramoff to add impact to languishing initiatives. The four possibilities that follow serve as only a start for counselors in the corporate setting.
Re-Energize All Compliance And Ethics Training
You now have a living example of what can happen when compliance and ethics training is not a priority. External materials are plentiful and most corporations have had many opportunities to provide compliance and ethics training, but few have energetically embraced such opportunities. While most every organization has some level of commitment to these activities, truly achieving comprehensive buy-in and support from senior leaders is often a challenge.
This new environment changes the rules. Senior leaders are ready to support tangible demonstrations of their support for compliance. This is the opportunity for organization-wide training, issuance of policy statements, or needed revised policy statements, from corporate leadership, and perhaps advocating for additions to staff with ethics and compliance expertise. With rare exceptions, the law firms with robust Washington, D.C. offices have already conducted this type of training for their professionals and staff; now is the time to have that presentation re-packaged and customized by the law firm of your choice. If your outside counsel has not conducted such a program, other options are readily available from a more enlightened firm.
Build Your Political Action Committee
While some may argue that the current political environment makes the future of Political Action Committees (PACs) questionable, there is another point of view that is worthy of consideration. PACs are THE most likely form of political participation to remain after any set of reforms are implemented. Counselors who have been frustrated by languishing PACs lacking in senior management participation, or who seem to compete with the desire of some of their employees to make political contributions independent of the PAC, may have the chance to consolidate their political giving activities under the company PAC.
The PAC can become the immediate answer and final destination for any solicitation or inquiry regarding any type of request for political support that comes to the office.
The reality that certain business and professional activities have a political facet to them will remain. The progressively troubling quandary is how to be engaged, responsive, and still situationally aware of the changed ethical expectations. The appeal of executives delegating all giving to the PAC has immense potential in this environment.
Even in companies where the PAC culture is robust, there are often limited resources for assuring compliance and related education. Now there is a front page reason to give this area attention for updating bylaws, providing compliance training, and ultimately expanding or improving the donor base.
Consolidate Government Affairs Activities With The Legal Department
More than a few general counsels have been historically frustrated with the lack of coordination between the corporate government affairs and lobbying activities and regular conduct of the legal department. While many unique fact situations may remain that will justify the independent operation of a government affairs team, the current environment provides ample justification for re-examining internal and external structures relating to review and accountability. Perhaps even a few general counsels can use Abramoff to obtain some level of supervision over the lobbyists hired by the marketing division of their company.
For those who have attempted to outsource lobby compliance and other responsibilities, your consolidation may merely be achieving a review of the indemnity provisions in various vendor and professional services contracts.
Increase Senior Leader Involvement In The Political Process
The argument that politics is someone else's job in the company will not go away, but the fact that senior leaders are going to be held publicly accountable for the political activities of their organizations is no longer a subject to discuss using only hypothetical situations. In a world where accountability cannot be directed to someone else and ceasing activity is not an option, senior leaders may be more receptive to stepping in to assure the political messages delivered are the ones desired. Intentions are rarely misinterpreted when the activities include the highest levels of an organization.
That is why I urge you to say, "Carpe Abramoff!" We counselors may never have the opportunity again to gain the attention and focus of our organizations on the importance of political involvement that is fully integrated into the ethics and compliance culture of the company. Only the most nave corporations will use the recent scandals to justify withdrawal from the political process, but many can seize this public discussion as the catalyst for healthy organizational growth.
Perhaps the most sinister or slothful advisors may suggest that ethics and compliance training should "wait until the smoke clears." The justification for such guidance usually includes a diatribe on all of the "pending" legislation on the topic and that waiting to see what the state legislature or the Congress does to change the rules is the most efficient course of action. If you get that advice, please consider:
1. That advisor probably has a family vacation scheduled,
2. That advisor has something else he wants you to address,
3. That advisor knows really very little about how to inspire compliant, ethical conduct, and
4. You may have accidentally stumbled into the street, and you are not having a conversation with one of your valued professionals but some urban nomad who is taking a break from asking conventioneers for cash contributions (for food, of course).
Carpe Abramoff! This is not a one-time action. The possibility that the Congress might alter certain compliance requirements is not an excuse to wait; it is an admonishment to prepare. The simple fact is that any type of training relating to shifting attitudes cannot possibly have full impact on its first implementation. The possibility that there will be new developments in the ethics and compliance arena builds in the need for a quarterly update, or an end-of-year review. Such follow-on presentations will have increased impact if there had been an initial presentation early in the year.
Now is the time to use the negative headlines to your advantage. The horror stories provide an ideal premise to streamline and refocus your public policy advocacy and initiatives and build a better organization.
Published May 1, 2006.