Instances of Bribery and Corruption Could Cost Oil and Gas Companies Tens of Millions, Says Corporate Compliance Expert Jeffrey Harfenist
30 Apr, 2012, 08:15 ET
HOUSTON, April 30, 2012 /PRNewswire/ -- Oil and gas companies are subject to multi-million dollar fines, and corporate officers face significant jail time if adequate measures are not taken to prevent and detect corrupt behaviors, says corporate compliance expert Jeffrey Harfenist, a director at Berkeley Research Group, LLC.
"The average fine and disgorgement for FCPA-related settlements over the past two years approaches a staggering $66 million. And that doesn't include the substantial legal and consulting fees related to internal investigations, or the lengthy jail time corporate officers have been receiving," said Harfenist, an expert in continuous monitoring (CM). "Couple this extraordinary exposure with the Dodd-Frank Whistleblower Provision and you can see why oil and gas companies operating in high-risk venues are extremely concerned. In light of these risks, I am continually looking for the cost-effective processes companies can implement to minimize their exposure."
Harfenist will deliver a speech called "Continuous Monitoring: A Cost-Effective, Proactive Approach to Combating Anti-Corruption Risks from Whistleblowers, as well as Supply Chain Fraud" at the 2nd Annual Compliance in the Global Oil & Gas Supply Chain Summit, June 27, 2012 in Houston.
Continuous Monitoring involves the integration of forensic practices with powerful software to detect high-risk behaviors and transactions, evaluate policy compliance within an organization and report the results to appropriate individuals. The program will include a case study and a discussion of:
- The financial impact of early identification of fraud schemes for oil and gas companies
- Applying CM to evaluate Books and Records compliance
- Using CM as part of your risk assessment process
Executives in the oil and gas industry frequently ask Harfenist a range of questions, including:
- What processes and forensic tools are available to address the growing compliance requirements and related corruption risks my company faces?
- How do I determine whether someone in my procurement department has an undisclosed financial interest in a supplier?
- How can I detect corruption schemes in their infancy?
- How do I ferret out corruption, fraud, waste and abuse in my supply chain?
These questions create difficult challenges for energy companies as many of the countries they operate in pose extremely high fraud and corruption risks due to existing business and cultural practices which often run afoul of western anti-corruption statutes and operating norms.
"Continuous Monitoring systems are an excellent solution to mitigate these risks as they can quickly uncover suspicious trends, data inconsistencies, policy violations, and a host of other high-risk attributes associated with fraudulent behaviors. These analyses can be performed remotely, and based upon the particular findings, compliance and forensic experts can be routed to those geographies posing the greatest risk of loss and exposure. This process produces increased efficiency, reduces travel costs and allows companies to focus finite resources on their highest and best use," said Harfenist.
"One only need look to the recent bribery-related disclosures by Wal-Mart to see the benefits a CM program would have had," he said. "The early detection of bribery and corruption schemes -- a key benefit of Continuous Monitoring -- prevents Books and Records violations from accruing and tainted revenues subject to disgorgement from occurring. To minimize your company's risk and exposure, shutting down these fraud schemes in their infancy is critical."
Mr. Harfenist relies on his 25 years of investigative expertise in a variety of industries to root out corruption, waste and abuse in the oil and gas industry. He regularly consults with chief compliance officers, general counsel chief financial officers, and heads of internal audits who want to know how to root out fraud, waste, abuse and corruption in their companies.
Over the past seven years, Mr. Harfenist's practice has focused on matters involving the FCPA (Foreign Corrupt Practices Act), specifically on internal investigations and proactive compliance reviews. He is an expert in the application of forensic tools used to identify anomalous transactions and high-risk relationships. He has managed investigative teams on some of the most high-profile investigations in U.S. history, including the Tyco, Enron and AIG matters and has hands-on expertise leading investigations involving theft of assets by insiders and financial statement manipulations. His engagements span the globe and have required the deployment of multiple forensic teams lasting up to three years. He is a CPA and earned his MBA from the Jones School of Management where he graduated in the top five of his class.
He also provides anti-fraud consulting to other industries that are prone to embezzlement, kickbacks and corruption, including telecom, medical devices, pharmaceutical, defense, consumer products, life sciences, and other industries.
For information about Jeffrey Harfenist, please go to http://www.brg-expert.com/professionals-158.html.
SOURCE Jeffrey Harfenist
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