Sunny: Hello everyone, my name is Sunny McCall and I am Momentum’s Vice President of Content and Experience and Program Director of Momentum’s upcoming 9th annual ACES Compliance Summit. It is my great pleasure to be here today with Jonathan Rusch. Jon, welcome.
Jon: Thank you very much, it’s a pleasure to be with you today.
Sunny: Likewise Jon. A little bit of background: Mr. Rusch is Senior Vice President and Head of Anti-Bribery and Corruption Governance at Wells Fargo, based in Washington D.C. Before joining Wells Fargo in 2015, Mr. Rusch served as a federal prosecutor for 26 years in the Fraud Section of the Criminal Division of the U.S. Department of Justice; most recently having served as Deputy Chief for Strategy and Policy. Previously, Jon held positions at the U.S. Department of the Treasury, the President’s Commission on Organized Crime in Washington D.C. and formerly at a Law Firm as an associate.
Jon, jumping right in here, prior to joining Wells Fargo I see from your bio that you held several prestigious roles within the government, including having served most recently in the Deputy Chief role at the Department of Justice. Reflecting now on your current role as an in-house executive, what experience or experiences do you rely on most from your time at the Fraud Section when offering guidance to your internal clients?
Jon: That’s a great question, Sunny. I think there are two things that, I think, are recurring themes, so to speak, in my day to day interactions with colleagues, including all of the people across Wells Fargo who deal with anti-bribery and corruption issues.
First of all, I think, there’s a unique perspective that you bring to these types of discussions about compliance and governance in the anti-bribery space — from having been a prosecutor and dealt with lots of white collar crime prosecutions: giving people insights into how prosecutors, and agents, and investigators look at allegations of bribery and corruption; how they structure cases, how they evaluate, what kinds of information and representations would come from a company that’s under scrutiny for FCPA or similar kinds of anti-corruption violations, I think, is a valuable perspective. It gives people better understanding of how the government works. So in other words, it’s not arbitrary, it’s not random, it is often the result of a very, very deliberate process to try to amass information from many sources to understand what’s going on.
The second and related aspect of that is that, again, in my experience as a prosecutor, those people who are under investigation, or those companies who are under investigation when they sat down with prosecutors and agents are probably at their best advantage when they could say, “Look, here’s the way we tried to approach this issue. We can document how we’ve done this, we took what we believe is a logical and rational approach on a risk based basis.” And when you present arguments like that to folks in the government — where you’re not just throwing rocks at them, you’re not saying, “Oh, you’re just overreaching, you’re arbitrary,” and so on — and instead you treat people as though you want to persuade them not simply throw objections in their face, that kind of focused instruction, showing that you’ve got a logical rational basis for the compliance measures taken, actually can go a long way to being persuasive with those types of law enforcement and regulatory inquiries.
Sunny: Thank you Jon. Now, transitioning a little bit here and thinking as a senior executive responsible for anti-bribery and corruption governance specifically within the financial services sector, I’m curious to hear from your perspective what you would say the top two challenges your industry faces on the corruption governance front, and then what would you say those challenges are primarily driven by?
Jon: I think there are two challenges that I know I face on a regular basis and that I’m often talking about with my colleagues. One of them — and this obviously will vary from one institution to another — but, I think, one issue that we all would have to be looking at is trying to plan for expansion into different markets. The more that firms in the financial sector are seeking to diversify the services that they offer to different types of customers, not just domestically but internationally, that could increase the range and complexity of interactions, and therefore the range and complexity of anti-corruption compliance measures, due-diligence, and so on that you have to undertake.
The second thing that, I think, is perhaps a very logical and straightforward kind of challenge is as we move — for any type of product or service that a financial firm is offering — as we move into new markets, it’s increasing the complexity of what we have to do in just managing an effective anti-bribery and corruption governance and compliance framework. That is, as we keep going into new markets in general, any financial firm is likely to have to deal with the reality that, very simply put, different countries have laws that are in some respects very different, one from the other. There may be requirements that are stated under one set of national lawsthat could be inconsistent with another set. And so that has to be managed not purely as a legal matter, but also in terms of what kinds of expectations and limitations your compliance program puts in place, in order to navigate those potential conflicts or complexities so that you can plan rationally for your business development and still remain in good order with your compliance program.
Sunny: Going a layer deeper Jon, and thinking a little bit about the response you just gave to the prior question, I’m sure your current duties at Wells Fargo span issues that arise across many countries, as you just mentioned. In your experience have you noticed any trends by regions specific to anti-bribery and corruption governance?
Jon: Well, of course, there are always individual countries where you can see particular developments and particular allegations involving a specific bribery corruption scheme that’s being unearthed. But, I think, one of the things that’s noteworthy and this is not just for the anti-bribery and corruption space, I think, one of the things that’s noteworthy is the extent to which we see, as part of our continued monitoring of developments around the globe, that one of the significant tipping points potentially in the development of effective anti-corruption measures is the extent to which the populations of various countries engage in demonstrations that are specifically focused on opposing corruption in their countries.
Of course, these types of popular large-scale demonstrations aren’t a guarantee that changes will occur in that country, but if you look, for example, over the last year and more at some of the countries around the globe, including in Central and South America, where these kind of large scale popular demonstrations motivated by opposition to corruption have sprung up — and I’m thinking of places like Brazil, Guatemala, and Honduras – we do now see significant changes in what’s happening at a national level in those countries. And again, while it’s not an absolute guarantee that those demonstrations automatically lead to complete and effective change, it is noteworthy that, for example, all of us need to be focused on these types of demonstrations at a grassroots level to the extent that they may become a catalyst for genuine change at higher levels. So that’s something we’re going to continue to watch and certainly encourage other to watch as well as potential indicators of opportunities for change.
Sunny: Jon, Momentum’s upcoming ACES Compliance Summit seeks to address these overlapping and the often intertwined nature of compliance that ties together anti-corruption, export controls, and sanctions. Given your experience in working and advising internal clients, what would you say are the most common threads that link these three areas together from a compliance and governance standpoint?
Jon: That’s a great question. I think one of the things that whether you are focused primarily on anti-bribery corruption work, or OFAC Sanctions, or other areas of financial crimes compliance … one of the things, I think, that you can see, if you analyze cases across those types of financial crimes risk areas, is that corporations may run afoul of one or another of these bodies of law in part because there’s not a genuine commitment from the top down for management in that corporation to genuine full-blown vigorous compliance with those legal requirements.
Coupled with that is an absence of sufficient support, including both fiscal resources and human resources, to ensure that you can have effective and robust compliance measures in place. And, I think, if you lack those kinds of things you will see in some respect very similar behaviors, where people start making judgments inside corporate environments that do in some respects inevitably lead to violations of law, precisely because they succumb to the pressures of the moment or the worry perhaps that they will lose business. So, they take certain steps — whether it’s shielding federal authorities from information about what you’re doing in the sanctions area, falsifying records when it comes to paying bribes to an official or similar practices — and, so, I think, those kinds of commonalities are precisely the things that on a general level work to inform all of us who are working in financial crimes compliance, to ensure that whatever company you’re in, the kinds of measures you have in place have genuine buyin and genuine support from the top down so it’s not just a matter of issuing a statement.
Your tone from the top statement should say more than, “We’re against corruption or we have a zero tolerance policy.” You need to be able, as part of having robust compliance, to show everyone in your company that your most senior management right up to the CEO and Board of Directors are genuinely committed to this and mean what they say when they say, “We are going to abide by this policy,” and carry that out into all of their day to day dealings.
Sunny: Thank you Jon and in closing here I must say we are incredibly pleased to have you serving for the second year in a row now as a chair of the ACES Compliance Summit. Putting aside for a moment your role as a chair of the event would love to hear from you. What about this conference that feels most to you from the attendee standpoint?
Jon: Sure, I think, one thing that I saw, for example, at last year’s ACES Summit was the fact that it was set at a size that was not so big that it made it difficult for people to have genuine interaction between speakers and attendees. I think having that opportunity — although, obviously there are other conferences that have a much larger scale — this event gives you lots of opportunity for networking and so on. I think having that physical closeness of people and the closeness of interaction between speakers and attendees is really something that sets apart this particular event.
I think the other thing that’s worth focusing on is the model that Momentum has in place for this year’s summit: the fact that this has been set up as a, and this is my characterization, a “free to attend” model, enabling corporate executives to attend. I think that helps to make this a very specific differentiator that, I think, for anybody who’s looking at attending the ACES Summit should be an attraction as well, in a very literal sense: giving you more opportunity to get some of your key executives in the door and to be able to participate in this kind of environment.
Sunny: Well, Jon, thank you again so much for your time here, always a pleasure speaking with you and very much looking forward to seeing you in April at the conference.
Jon: Thank you, it’s my pleasure and I look forward to the conference as well.