Is there a missing angle on the DA Seth Williams story?

In April 2010, Young Philly Politics ran an article on the blog lauding Philadelphia District Attorney Seth Williams for going after public corruption in the city government. In May 2010, WHYY, Greater Philadelphia’s leading public media provider noted that DA Seth Williams was investigating charges of voter intimidation in a closely fought legislative race. By all accounts, DA Williams was standing up for the people of Philadelphia. By June 2011, DA Williams was upping the ante on public corruption by hiring a lead state prosecutor for the “Bonusgate” scandal. Bonusgate, was the public corruption issue where state employees were paid for performing campaign work while on the job, with tax payer funds, which is illegal.

DA Williams continued his focus on electoral fraud, and in November 2014, DA Williams announced the creation of an Election Fraud Task Force that included assistant DAs and detectives to focus on Election Day allegations. DA Williams continued his public corruption onslaught with the announcement of charges against state Rep. Vanessa Lowery Brown and Ronald G. Waters, which occurred as part of a sting operation. The Lowery-Brown and Waters cases had an interesting backdrop, in that, the then Attorney General Kathleen Kane, alleged that the State Reps were targeted based on their race. In his defense, as noted by the Pittsburgh Post-Gazette, DA Williams stated “As an African-American and as a law enforcement official, I was disgusted that the attorney general would bring racism into this case”. Rep. James eventual pled guilty, but Rep. Lowery-Brown opted for trial. In a March 2016 column, the Philadelphia Inquirer reported that Rep. Lowery-Brown maintains that state prosecutors targeted her solely because she is black. Rep. Lowery-Brown’s trial has not commenced to date.

In May 2015, DA Williams Election Fraud Task Force was on high alert again. DA Williams continued to focus on electoral fraud in the 2016 Presidential Elections. A Washington Times article, based on the Associated Press reporting noted that DA Williams had more than 70 staffers to take calls and respond to complaints on Nov. 8, 2016.

However, by August 2016, some in Philadelphia taught that DA Williams should step aside. In fact, Philadelphia Daily News Columnist, Will Bunch, articulated reasons for Williams to go. Two months later, in October 2016, a personal matter for DA Williams spilled into the public because a female companion of DA Williams was sentenced for damaging city vehicles parked outside of Williams’ house. Maybe it was the job, but DA Williams was clearly creating bad blood with the Philadelphia political class during his two terms in office. During the trial of former-Attorney General Kathleen Kane, it was revealed that the former AG vowed to make DA Williams pay because of their battles. As the indictment shows, DA Williams had bad blood with politicians, family and friends.

On February 10, 2017, DA Williams announced he would not run for a third term. According to the Pittsburg Courier, DA Williams stated that he “regrettable mistakes in my personal life and personal financial life that cast an unnecessary shadow over my office”. A little more than a month later, federal grand jury returned a 23-count indictment charging DA Williams with bribery, extortion, honest services wire fraud in connection with tens of thousands of dollars’ worth of concealed bribes that he allegedly received from two business owners in exchange for his agreement to perform official acts. The indictment also charged Williams with defrauding a nursing home and family friends of money earmarked for a family member’s care.

A read of the 50 page indictment is gut wrenching. How can someone who overcame such hurdles in his life, fall prey to the activities he prosecuted? I am reminded of a quote from Tolstoy’s story “The Death of Ivan Illich.” “Caius is a man; all men are mortal; thus Caius is mortal.”

Compliance is not the Bogeyman

In a recent article, a senior relationship manager at a US bank in Hong Kong, complained that “Compliance is ruining my world”. My colleagues and I have heard similar statements in the past. Healthcare professionals argue that HIPAA is affecting their business and that they are swamped with useless paperwork and patient forms. Nonprofit champions say that the costs of complying with federal, state or local rules drain much needed financial resources away from the core mission. In fact, customer-facing professionals in many industries may share the same point of view.

Thomas Cheong’s (not the real name) reasoned position is based in part on a few facts, (a) He spends a lot of time dealing with client compliance issues; (b) the frequency of client due diligence updates increased; (c) client onboarding takes months rather than days; and (d) compliance activities affects the pursuit of the core mission. From a compliance perspective, the actions required of Mr. Cheong are the effects from regulatory sanctions that were caused by the wrongdoing of others. Compliance is not the Bogeyman; Compliance is in place to protect you, your customers, and your company from the Bogeyman.

In a meeting last week with compliance professionals, Pekka Dare, Director ICT Academic Faculty noted that in financial services, the global trend has sifted the primary KYC compliance responsibility to the front office, where the client relationship is owned. As a private banker, it is essential to understand the source of wealth of new or existing clients. It is equally important to know about your customer’s customer.

For example, a private banker may have a Jeweler as an existing customer for four years that was subject to due diligence reviews at onboarding and in year three. In year four, the Jeweler established a new diamond supplier relationship. The identity and location of the new diamond supplier could become an AML concern for the bank. FATF reports, including the FATF/ Egmont 2013 report notes “diamond and diamond trades can be used in all the stages of money laundering and terrorist financing”. If the Jeweler was a new customer with a supplier of concern, it may take months to complete the verifications to complete the onboarding process. The alternative would be for Mr. Cheong and his manager(s) to complete written risk acceptance documents to take on the new business. Onboarding clients without completing a due diligence review, rips away the compliance mechanism in place to protect the employee and the bank.

There are different methodologies that can be used to streamline processes to allow customer-facing professionals to complete compliance tasks with minimal impact to the operations. The development and integration of the methodologies and tools require the skills of compliance professionals with deep understanding of the issues, with knowledge and insights to provide best in class solutions. At EICCIO Advisors, we provide these services to clients.

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Theon is a Managing Consultant at EICCIO Advisors, which helps companies meet their audit, regulatory, and compliance requirements. If you would like to schedule a free, no-obligation consultation, click here https://calendly.com/eiccio.

If you would like to expand your network, invite Theon, he is friendly.