$67,000,000, 275 jobs and a 72-Year-Old Business: Gone

Fuel supplier Worley and Obetz is no more, paychecks and benefits abruptly stopped for good and the lending banks had a very rude awakening. Customers and suppliers in turmoil. Another completely avoidable debacle no different than when thieves go to jail but there are no implications for those that were derelict and made the theft possible.

The fraud lasted for 15 years. And throughout that time the enablers including the owners, accountants, lawyers, and bankers were in a bubble, happy and oblivious to what was happening.

In addition to basic management practices, there is also a government requirement that every organization have a program to prevent and detect any and all unlawful acts. And even the lawyers support it. The American Bar Association notes that in addition to avoiding liability, programs to raise and address problems are good for business and regardless of governance or size, every organization should voluntarily implement them.

But Worley and Obetz was unprotected for 15 years because their leadership, advisors, and even business associations ignored an essential business practice and critical federal requirement.

Not surprisingly, several long-term employees told us that they had known something ‘was wrong” for years but the company had a “no bad news culture.” (Safety was an exception; Worley and Obetz did not have a sophisticated system, but the safety manager was easily accessible and approachable and they had a good safety record.)

Everything every nonpublic organization needs to know about the government requirement is in this checklist. And if every one of the first seven boxes cannot be checked, it needs to be addressed right away. I recommend at least minimizing working with organizations that do not have the requisite program and I definitely would not let them near minors or the elderly.

If you’re interested in additional information, including about the solution that is the most likely to prevent and first to detect illegal conduct and only costs a few dollars a month, contact me.