OK, here is the starting point. Someone breaks the law and they need to be punished. Sounds good. Someone misuses government money and is penalized. Still sounds good.
Big Brothers Big Sisters pays a $1.6 million penalty to the federal government. Makes me feel at least a little sick. Every dollar they lose means some child who needs a guide and a mentor doesn’t get one.
We need to go past mere numbers and concepts and think about people for a minute. I don’t want even one child to miss out on this important experience. How many children will miss out with a $1.6 million penalty? You can’t really get your arms around this one until you can picture a little one who is alone because there is no money for a Big Brother or Big Sister.
What is my point?
“Tough on crime” and imposing fines on big organizations sounds really cool, until you see how it works out.
This is why my professional interest is not on how to impose bigger and bigger fines. It has always been on how we prevent misconduct in the first place.
Fining social institutions is about as dysfunctional as our legal system can get. I certainly agree with requiring this entity to have strong controls and ensuring it follows the law.
If individuals broke the law, go get them.
But fining organizations like Big Brothers and Big Sisters is never going to be the simple answer its proponents claim it will be.
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Joe Murphy is a Certified Compliance and Ethics Professional and author of 501 Ideas for Your Compliance and Ethics Program: Lessons from 30 Years of Practice (SCCE; 2008). He was co-founder and vice-chairman of the board of Integrity Interactive Corporation (now part of SAI Global). He serves on the board of the Society of Corporate Compliance and Ethics (SCCE). He can be contacted here.
3 Comments
Joe, you might perceive the legal system as dysfunctional – but tell that to the countries where 90% of all social funds are misappropriated on a daily basis, or tell that to countries where drug lords are using social institutions as legal covers to paint themselves as modern Robin Hoods.
Can you name fool-proof criteria for "organizations like Big Brothers Big Sisters" that should be exempted from fines? Can you define fair criteria how to pin blame on individuals in big organizations so only the "real culprits" are punished?
Maybe the issue is less that Big Brothers Big Sisters was fined, and more of they were fined for.
The press release references "false claims", so I suppose this has to do with an FCA qui tam or a government audit. But the description of the issue is not that they attempted to defraud the government by not performing services, but that they didn't have internal controls to ensure grant funds were properly administered.
Negligence certainly, incompetence probably, malice unlikely, corruption not apparent.
Is this a case of when you have a hammer everything looks like a nail?
What about the fact we are funding people, leaders, a program that doesn't maintain or uphold legal obligations or ethics and compliance as important? Aren't these the values being instilled in the children through the program as well? Isn't this behavior counter productive to the reason for the program? It feeds down to those children in some form. End result, loss to children for illegal activity, corrupt behavior. No doubt many of those children will hear about this. Then they will consider such behavior with regard to themselves. Trust, a child violated again.
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