“Beautiful Liar”: Corrine Brown Indicted Following Fraud Investigation

“Corruption erodes the public’s trust in our entire system of representative government”
– Lisa Caldwell, U.S. Justice Department

Earlier this month, ABC News and other major news outlets reported that long-time member of the United States House of Representatives Corrine Brown has been indicted on 24 counts of white-collar crime. The indictment followed a U.S. Department of Justice investigation of a supposed charity organization run by Brown and others known as “One Door.” The DOJ found substantial evidence that One Door was a “slush fund” for Brown and her alleged co-conspirators to enjoy lavish entertainment, including $200,000 in charity funds spent on a luxury box where Brown and others allegedly saw Beyonce perform, among other hits, her song “Beautiful Liar.”

Democratic leaders such as House Party leader Nancy Pelosi were quick to thank Brown for her service in Congress, yet Pelosi called Brown’s behavior “deeply saddening,” according to the ABC report. Brown is, of course, innocent until proven guilty of these charges in a court of law, but this is not the first accusation of corruption and misappropriation of funds concerning Brown. Further, the evidence against her is quite damning.

Speaking on behalf of the Department of Justice, its chief of the criminal division Lisa Caldwell stated “Congresswoman Brown and her chief of staff are alleged to have used [her] official position to solicit over $800,000 in donations to a supposed charitable organization, only to use that organization as a personal slush fund.” In addition to the Beyonce concert, the slush fund was allegedly used to fund a golf tournament called the “Corrine Brown Invitational” and a luxury suite to a Redskins vs. Jaguars football game.

From a compliance perspective, this is yet another edition of what seems like a weekly potpourri of high-level corruption scandals. What is so sad about this story is that Brown didn’t even try very hard to hide what she was doing, soliciting up to $20,000 per attendee at the Corrine Brown Invitational. Like many corporate executives, Brown appears to have tasted the fruit of corruption and decided “I won’t get caught . . .” which is the mantra for white-collar criminals everywhere. For quite some time it worked well too. Brown lived large and had a reputation as a civil rights leader and charitable person while a snowball effect happened: the lies grew bigger and Brown’s wallet grew fatter.

We can’t say it enough; organizations – from governments to corporations – have to make compliance a priority. The Corrine Brown situation is a more than just a personal black eye, it is a political disaster in an election year that paints a negative light on a party already under fire for scandals of varying degrees at its highest levels. The risk is too great to do anything but engage in a full-scale campaign to instill a culture of compliance within your organization. If you don’t your next luxury box could be 5’ by 5’ in a resort destination such as Mojave, California. Do yourself and your organization a favor: Prioritize compliance over profits. It will be a winning investment in the end.

Syntrio is a leader in the ethics and compliance field, with an innovative philosophy towards compliance program design and engaging, entertaining, and thought-provoking content. Contact www.syntrio.com for more information about our ethics and compliance online courses for and remember to follow us on TwitterGoogle Plus and LinkedIn for daily updates on compliance that impact your company!

English Soccer Club Commits Act of Fraud: Ethical Firestorm Ensues

A July 19, 2016 Deadspin article brought to light one of the more interesting and embarrassing ethics gaffes of 2016. According to the article, English soccer club Chesterfield FC held a raffle, with tickets for sale at 10 pounds apiece. The club offered the winner of the raffle a trip accompanying the club on its preseason tour of Hungary. Unfortunately for the lightly followed club, which plays in a tier of English soccer analogous to AA minor-league baseball, only 4 people purchased raffle tickets. 

Deadspin’s initial investigation of the story revealed the club named “James Higgins of Surrey” the winner of the contest. Oddly, the club made no further mention of Higgins as it prepared to embark on its tour of Hungary. Fans who had purchased tickets grew suspicious and scoured social media for evidence of Higgins’ existence, questioning the team on Twitter and Facebook all the while. One fan went so far as to personally contact the team for information on the situation. No evidence of Higgins’ existence was found, and no response was received from the team.

In a statement released by the club on July 18, 2016, Chesterfield’s Director Ashley Carson claimed “an illegitimate winning entry was discovered.” The statement went on to say “[f]ortunately, no supporters have been affected financially or inconvenienced.” Clearly, the club knew it was in for a PR firestorm when it issued its statement thanking the fan who contacted Carson to raise the concerns of impropriety without acknowledging what the impropriety was.

Following Chesterfield’s release of its statement, Deadspin’s further investigation uncovered the club’s position on its message board that all tickets were being refunded because “Higgins” allegedly became ill prior to the trip and could not attend. The only problem with that explanation: Higgins did not exist, which was why the club actually decided to refund the money spent by the four people who entered the raffle. Chesterfield is now left to pick up the pieces as the story continues to unfold across the globe.

Compliance Starts at the Top and Protects Your Reputation Like a Shield

Companies and brands at all levels of the corporate world are nothing without their integrity. When an athlete is accused of steroid usage he or she is named a cheater forever and his or her brand can take years to recover (if ever). Likewise, when companies face ethical scandals like the Chesterfield situation, they have a disastrous effect on the organization as a whole. Going forward it will be impossible to trust Chesterfield, F.C. because one person within the organization felt it would be easier to lie and commit an act of fraud than it would to admit that a promotion was not going as intended.

Compliance is a leadership-driven industry, and unethical behavior trickles down from the top. If someone in Chesterfield’s marketing department was able to decide that the “easy road” was better than owning up to a failed promotion, clearly there was a failure in leadership that was preventable with proper training and communication from leadership. Sadly, this is all too common, as employees are tempted to take bribes and commit acts of fraud under the guise of “I won’t get caught.”

Companies of all sizes need to shield their organizations from these types of scandals by instilling a culture of compliance within the company, and it starts at the highest level of decision-making where executives have the power to instill compliance programs that will protect the company from incidents that appear in the news and become the punch line of jokes.

The Ethical Struggle is Real, and so are the Consequences

When a company is analyzing the effectiveness of its compliance program, sometimes it takes an embarrassing story like the Chesterfield scandal to bring to light the consequences that occur when compliance is ignored. While the economic impact of Chesterfield’s decision to tell a lie rather than own up to its failed promotion is minimal (40 or 50 pounds), the damage to its reputation is immeasurable. Chesterfield’s brand is destroyed, and it will likely never recover what little fan base it had before July 19. Further, this story is far-reaching, having already become big news in the United States, which shows that news of unethical behavior spreads quickly worldwide in the digital age.

When considering a leadership path for your company, or analyzing management strategy for those employees working under you, remember that every decision, no matter how large or small, needs compliance consideration. As the aforementioned story shows, failure to do so can be the difference between swallowed pride over a $100 refund for a failed promotion or destroying your company’s reputation forever.

Don’t be the next Chesterfield. Instill cultural and philosophical compliance values so that your organization can continue moving forward and avoid the damage control that accompanies an ethical violation. Syntrio is a leader at the forefront of innovation in compliance. We have solutions to your everyday compliance needs so that you can avoid becoming the next Chesterfield P.R. disaster. Remember, reading the story might be funny, until it happens to you!

Contact www.syntrio.com for more information about our ethics and compliance online courses for and remember to follow us on Twitter, Google Plus and LinkedIn for daily updates on compliance that impact your company!