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You Don’t Pay Me Enough To Sign That Document

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June 30, 2022

In May, Glencore resolved a Foreign Corrupt Practices Act violation with a plea agreement that requires its Chief Compliance Officer to certify its compliance program and report to the DOJ. The certification is subject to the false statements statute, punishable by up to five years in prison, and the federal obstruction law, which carries a potential prison sentence of up to 20 years. That’s a long stretch in the slammer to be contemplating when those certifications are signed, and that, according to Richard L. Cassin, creates a plethora of problems and ass-backwards incentives for someone who values his/her freedom. For example, the certification form in Glencore’s plea agreement is weasel-proof. No fudge room for “to the best of my knowledge” or “it is my good faith belief and understanding.” Instead, the CCO, whose signature wasn’t on the settlement agreement (the GC and outside lawyers signed) has to certify that “based on a review of the Company’s reports submitted to the Department of Justice . . . the reports were true, accurate, and complete as of the date they were submitted.” Cassin notes that compliance involves judgments and interpretations, so a CCO who certifies that a program is reasonably designed to detect and prevent violations multiple countries is likely to see some things differently than the DOJ. If they disagree about what “reasonably designed” means, then what? And CCOs change jobs (Glencore’s is probably looking for a one now). Is the new CCO on the hook the same as his/her predecessor was? What if a CCO gets cold feet and refuses to certify anything? In summary, Cassin says, CCO certifications “are a rotten idea.”

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