Q3-4 2020 Integrity Advocate

Newly appointed BI&C Partners; Who's your Partner?

What do Daniel Dix, Bethany Klein, Don LaTorre, Dustin Montgomery and Jim Spears all have in common?  They are the newest, among the 80+ individuals throughout our company who serve as Business Integrity and Compliance (BI&C) Partners. Do you know who your organization’s appointed partner is? Review the list of BI&C Partners to find out who serves this role in your organization/group.


Daniel Dix, HR Advanced Training Specialist
Eastern Refining Operations – Robinson, IL

 


Bethany Klein, Environment, Safety and Security
Processes Supervisor – Findlay Office Campus

 


Don LaTorre, HR Consultant GBR Western
Refining Operations – Texas City, TX

 


Dustin Montgomery, Crude Oil Supply and
Logistics Senior Scheduler – Findlay Office Campus

 



Jim Spears, Supply Chain Manager Eastern
Refining Operations – Canton, OH
 

Since 2014, the BI&C Partner Program has cultivated and trained a select group of individuals—nominated by management—to help serve as ambassadors for integrity, ethics and compliance in their respective organizations. BI&C Partners help to strengthen our ethics and compliance (E&C) program as well as assist BI&C to more fully realize its objective to cultivate an ethical culture by promoting principled business conduct.

Responsibilities of the BI&C Partner include:

  • Actively look for opportunities to work with organization or local management to increase employee awareness and understanding of the Code of Business Conduct1, company policies, and the company’s values;
  • Encourage the reporting of suspected illegal or unethical conduct to a supervisor, manager, Internal Audit, Law, Human Resources or the Integrity Helpline;
  • Reinforce the Company’s anti-retaliation policy;
  • Assist BI&C with presenting compliance and ethics training;
  • Act as a liaison between the organization or location and BI&C to identify compliance and ethics issues and determine targeted training needs; meet at least quarterly with organization or local management.
  • Promote and encourage the timely completion of the Annual Code of Business Conduct Questionnaire and Certification and answer employee questions relating to the questionnaire and certification.
  • Distribute publications and other materials promulgated by BI&C; and
  • Provide feedback to BI&C on the effectiveness of its strategies, communications and training.

Designated groups within MPC and Speedway2 have at least one BI&C Partner who serves as a liaison between BI&C and the employees within their respective Partner’s group.

Programs like MPC’s BI&C Partners are a best practice in the ethics and compliance space.  Typically referred to as “ethics ambassadors” (EA) or “ethics liaisons,” individuals in these roles are increasingly used and relied upon as an effective and cost-efficient supplement to a company’s overall ethics and compliance (E&C) program.  

In September 2017, 19 companies, including MPC, participated in a benchmarking study conducted by the Ethics and Compliance Initiative (ECI).   The results of the study are documented in a best practices white paper titled ECI Benchmarking Group on Ethics Ambassador Programs.  The benchmarking group determined the working definition of an EA to be, “An employee designated as a single point of contact within an organization’s business units to assist with building and sustaining an ethical culture through communication, training and other ethics – or compliance related initiatives.3” For the EA, taking on this supplemental role offers opportunities to learn and practice new skills, gain visibility into new and different facets of the organization, interact with a broader group of colleagues, and enjoy a new level of exposure to leaders. 

It also found that best practice programs appoint at least one EA in each business unit, provide for leadership nomination of EAs, and require a 1 to 3-year commitment, all characteristics shared by MPC’s BI&C Partners Program.  MPC’s program also tracks leading EA programs in that it is supported by the Business Integrity and Compliance office through Partner meetings, collaboration on training, and access to communication, toolkits, and other resource materials.  

MPC is known for its excellence and leadership in our industry; its performance in the ethics and compliance space is no different. ECI’s study confirms that our Partners Program is among the leading of its type and is best in class in terms of its characteristics and attributes.

1 Speedway Code of Business Conduct
2 Speedway’s Partners Program suspended
3 This is a slightly modified version of the definition used in the March 2017 ECA Member Survey on Ethics Liaisons, conducted in partnership with DTE Energy.

Fraud Strikes Renewable Fuel Standard (RFS) Program, Government Strikes Back

The U.S. Department of Justice (DOJ) announced on March 16, 2020, the conviction of a California man, Lev Dermen, by a federal jury in Salt Lake City, Utah, on criminal charges related to a $1 billion renewable fuel tax credit fraud scheme.  According to the DOJ, four co-conspirators, all family members belonging to the Davis County Cooperative Society, also known as the “Order”, pleaded guilty on July 19, 2019, for their roles in the scheme. Two of the four Kingstons testified at Dermen’s trial.

The U.S. Renewable Fuel Standard (RFS) Program requires obligated parties (refiners or importers of gasoline or diesel fuel) to blend biofuels into their products, or buy credits (called “Renewable Identification Numbers” or RINs) from those that do, to meet the EPA-specified minimum annual amounts of biofuels (called “Renewable Volume Obligation”, or RVO) —amounts that rise over time—into the fuels they sell. Biofuel production in the U.S. is also supported through various federal tax credits administered by the IRS.

According to the government, Dermen co-conspired with the Kingstons, owners of a renewable energy company, from 2010 – 2016, to ship millions of gallons of biodiesel within in the U.S. and around the world and back again to falsely claim more than $511 million in both Renewable Identification Number (RIN) credits and IRS tax credits for biodiesel that did not exist. This massive scheme included crimes such as mail fraud, money laundering, money laundering concealment, and attempts to bribe government officials. The Kingstons have been ordered to repay the $511 million in restitution to the Treasury and face extensive prison sentences; Dermen is also facing up to 30 years in prison.

(Photo Courtesy U.S. District Court for the District of Utah) Lev Dermen, left, stands with Jacob Kingston at a banquet hall in Southern California in 2014. Federal prosecutors say this photo is evidence of how Kingston purchased the 2010 Bugatti Veyron, left, for $1.72 million to give Dermen, and Dermen purchased the Ferrari, right to give to Kingston to launder money from the biofuel fraud.

This is not an isolated case, in fact, a similar Pennsylvania case was in the news recently. In the Pennsylvania case, biofuel plant owners conspired to fraudulently generate $10 million in RIN sales on fuel produced at the facility. The DOJ estimated that from 2009 to 2012 this scheme resulted in more than $4 million in improperly claimed tax credits. Owners, Ben Wootton and Race Miner, were each sentenced to more than five years in prison after being convicted in April of 2019 of making false statements to the IRS and EPA. Both men were also ordered to pay more than $4.1 million in restitution to the IRS and more than $5 million to the Pennsylvania Department of Environmental Protection.

The two cases discussed here, and others like them, have led to government agencies joining forces to thwart such fraud in the future.

Government Efforts to Reduce Fuel Tax Credit Fraud
In July 2019, the IRS and the EPA joined together and signed a Memorandum of Understanding (MOU) between the two parties. This MOU outlines their plan to share information about fuel production facilities and fuel program compliance to support the federal tax administration and reduce fuel tax credit fraud. 

The IRS aims to improve tax fraud analysis using data from the EPA systems to identify entities potentially involved in non-compliant or illegal activities. Once the analysis is completed and entities submitting fraudulent tax credits are identified, the IRS will pursue civil and criminal investigations, as appropriate. 

As demonstrated in the case of Dermen and Kingston, and Wootton and Miner, the IRS, with the support of the EPA, has identified significant instances of fraudulent activity surrounding fuel tax credits; the IRS efforts in this initiative will support the EPA in their RFS Program by ensuring that renewable fuel producers have an equitable playing field.

MPC RIN Integrity Program Supports Compliance
The RIN is a serial number assigned to a batch of biofuel for the purpose of tracking its production, use, and trading as required by the U.S. EPA RFS. Like MPC, obligated parties use RINs to certify compliance that they are meeting mandated renewable fuel volumes. At MPC, the Renewable Fuels Compliance Group oversees the company’s observance of such mandates. This group has a detailed RIN Integrity Program that they must follow to ensure that MPC is engaged in the oversight of renewable fuel transactions.

The RIN Integrity Program includes:

  • Approved MPC RIN Generator List
  • EMTS Block List
  • RIN Assurance Audits
  • RIN Integrity Committee
  • Outside firm to conduct a high-level review of the RIN Holdings before retiring any RINs for compliance
  • Analyzing RIN Holdings Monthly % of counterparties RINs/Risk
  • RIN Priority Tool/RIN Priority Tool Procedure

All these items, and more, come together to make up the MPC program and ensure MPC complies with the National RFS program implemented by the U.S. EPA. 

Business Records and Communications
When we create or maintain reports, records and communications, we are responsible for the integrity of those records.

  • We must not make false or misleading entries in Company books or records. All financial reports, sales reports, expense reports, time sheets, production records and other similar documents must be accurate.
  • If you are uncertain of the validity of an entry or report, raise your concern to the best source for correcting it. Never allow yourself to be part of a chain of incorrect information.
  • Whenever you write a memo, leave a voice mail or send an email, you create a record. These records are not private. Communicate in a way that you would be comfortable if you read what you said or wrote later in a newspaper or court of law.
  • Dispose of documents in accordance with our records retention policy. Never destroy or alter any documents or records in response to any investigation, anticipated investigation or lawful request.

Integrity in Action - Sometimes It Pays To Just Ask

“Sometimes It Pays To Just Ask” is a fictional story about the way we address ethics concerns in the workplace. It reminds us how important good communication and proper judgment can be in sustaining a culture of trust and integrity at MPC.

Leon pulled up a chair and sat down next to Katie in the Hub on the Findlay Campus. In Katie’s view, Leon always seemed to be the first to know the latest company news, and today was no exception.

“Guess what I just heard,” Leon said. “Vandelay is our new engineering contractor.”

“You’ve got to be kidding!” said Katie. “That’s just plain wrong.”

Leon was puzzled by Katie’s strong reaction. “Not sure what you mean,” he replied after a moment had passed.

“Please, Leon. You know as well as I do that Joe’s wife Debbie is the head of Vandelay. I guess nepotism is alive and well here at MPC.”

Leon remained silent. It was true that Joseph Pruitt, a co-worker of theirs at MPC, was forever talking about his wife’s firm, its new and ongoing accounts, and its public service activities in the community.

Katie swigged her coffee with a look of disgust.

“Is the Speedway coffee that bad?” asked Leon.

“No, you know it’s delicious” said Katie. “But the behavior around here sure is. I can’t believe Joe pulled strings to get a contract for his wife.

“I have to admit it doesn’t look good, but then we don’t know all the facts,” said Leon.

“I’m sick of this company’s hypocrisy. All this talk about values and then this kind of stuff happens right under management’s nose -- all with their blessing.” Katie’s face was flushed with emotion.

“I’m going to report Joe to the Integrity Helpline,” she declared.

“Really?” Leon said. “I thought that was for serious infractions, like big time swindling.”

“It’s also for reporting things anonymously,” said Katie. “I don’t want Joe to know I’m calling him out or he’ll never let me forget it.”

“Well, maybe you should talk to his manager first,” said Leon. “Ken probably knows how the contract was awarded. After all, he was on the selection team.”

“Yeah, but if he’s in on it, he certainly won’t pursue it,” said Katie. “I think reporting him to the Integrity Helpline is my best bet.”

“What if you just talked to Joe directly?” suggested Leon. “I mean, not in a confrontational way, but in a friendly, fact-finding way. You can do that—I’ve seen you be diplomatic… once in a while.” He smiled.

“I guess I could,” said Katie. “Joe’s a pretty straight shooter normally. And if things don’t square up, I can always go the Integrity Helpline route.”

The next morning, Katie asked Joe if she could have a word with him in the conference room.

“Hey,” she said, “I heard Vandelay won the contract as the agency of record. Congratulations to Debbie.”

“Yeah, thanks,” he said.

“I guess you played a big part in that,” said Katie.

Joe laughed lightly. “Actually, I was afraid my position here would ruin her company’s chances, so I went to Business Integrity and Compliance (BI&C) and disclosed the potential conflict. BI&C told me the potential conflict of interest could be avoided so long as I didn’t exert any undue influence through the selection process or serve as the final approver in a decision to utilize Vandelay and/or approve any work orders, work tickets, invoices or payroll time sheets submitted by Vandelay. I was also reminded that I should not share any non-public information regarding our company’s business and/or processes with outside parties, including relatives.  Finally, I was instructed to keep my supervisor informed of this relationship.”

“Wow, I had no idea,” said Katie. “I thought for sure you’d recommended her, even lobbied hard for her.”

“That’s what I figured people would think,” said Joe, “so I made a point to submit a disclosure to BI&C and recuse myself totally.”

“Thanks for letting me know,” said Katie. “I was ready to blow the whistle on you for being unethical.”

“An investigation would have cleared my name,” said Joe, “but I’m glad I haven’t had to go through all of that, so far. You could help me out by spreading the word if others approach you about it.”

Katie smiled sheepishly. “Sometimes it pays to just ask.”

Points to Consider

Was Leon correct in advising Katie to talk to Joe’s manager?

While that would have been a better approach than reporting the issue on the Integrity Helpline, talking to Joe directly first to gain more information was preferable.

Was Katie correct in speaking to Joe directly? Why or why not?

Yes. When it comes to ethics issues, we should not shy away from open, frank communication. Talking to Joe revealed to Katie that the situation was different from the one she had imagined. Sometimes ethics concerns can be addressed collaboratively rather than simply by reporting them.

What kinds of ethics violations should be reported via the Integrity Helpline?

Employees have a duty to immediately report any suspected illegal or unethical conduct connected with the business of MPC or its affiliates. Certain high-risk issues should be reported immediately. These include safety or environmental issues; harassment, intimidation, retaliation, discrimination or other inappropriate behavior; workplace violence; questionable accounting matters; and clear violations of the law or company policy. Had any of these issues been in play, contacting Law, Internal Audit, Human Resources, BI&C, or calling the Integrity Helpline would have been the right thing to do.

What should Katie have done if her conversation with Joe had gone differently, and it had confirmed a clear conflict of interest violation?

At that point, she should have spoken with Joe’s manager, contacted Law, Internal Audit, Human Resources, BI&C, or called the Integrity Helpline.

Should Katie tell others in the company what Joe told her?

Yes. Since he has given his permission, she should explain the situation to others who might also be questioning the ethics of the selection process.

Keys to Remember

  • The decision about how best to handle an ethics concern depends on the nature and severity of the suspected violation.
  • While the Integrity Helpline is an important resource, a manager or supervisor is almost always the best option for reporting as he or she knows the department and the work situation and is often in the best position to provide timely feedback, resolution or direction.
  • Our company takes concerns of misconduct very seriously and expects that any individual who reports misconduct does so in good faith.
  • Making a report in good faith means that you reasonably believe the report to be true and that you provide accurate information regarding the issue about which you are concerned.
  • Bad-faith reporting or misuse of the Integrity Helpline and other reporting channels violates policy, undermines the integrity of our speak-up culture, and can damage the morale of our company.
  • In many cases, addressing issues directly fosters a culture of openness, honesty, and trust, which supports the core values and smooth functioning of our company.

Glad You Asked

Below is a sample of inquiries received by Business Integrity and Compliance and responses to the same.

Click arrows below to view the company response to the concern.

The Question: I would like to start my own consulting business helping other companies save costs. This venture would not take business away from Marathon Petroleum or MPLX. Am I allowed to pursue this venture, or would it be considered a conflict of interest?

The Answer: In general, outside professional activities for personal gain are allowable so long as they do not prevent devotion of the loyalty, time and effort required by MPC or its affiliates and do not violate Policy #2006, Conflicts of Interest.  Absent additional information and to avoid a potential conflict of interest, you should not conduct any work that is in any way connected to the business of MPC and should not represent yourself as an MPC employee in connection with your consulting business.  It is also important to remember that you should not share any non-public information regarding the company’s business and/or processes with outside parties.  Finally, you have an obligation to keep your supervisor informed of your consulting business. Disclosures are the best way to protect against and deal with potential conflicts of interest. Please visit Business Integrity and Compliance Teamview and complete an Interim Disclosure.

The Question: Our team is looking to put together a "Social Distancing Bingo" game that promotes healthy activities. We wanted to confirm that raffling of $10 amazon cards to participants would be within company guidelines.

The Answer: Per page 6 of the Guidelines for Business Courtesies, Providing Business Courtesies to MPC Personnel, the raffling of $10 Amazon gift cards to MPC employees is permissible. If the total amount of the Amazon gift cards to be raffled to MPC Personnel exceeds $100, preapproval must be obtained from the vice-president of your organization using Form 6016 and an itemized report of recipients must be submitted to Payroll. No additional reporting is required on the part of the recipients.

The Question: I facilitate monthly Lunch & Learns for my department. I recently had a vendor that is providing a training for us offer to buy pizza for the group. Typically, I would provide the pizza, and the cost would be about $2.00 per person attending. Is there any ethical concern in allowing the vendors to purchase the food?

The Answer: There is no reporting necessary as it relates to meals, but it is always a good idea to openly discuss situations such as this with your supervisor and/or local management, in order to avoid the appearance of a conflict of interest.  That said, meals should not be accepted if doing so could either unduly influence decisions affecting the company or create the appearance of doing so.  In addition, meals should be infrequent and should not be lavish in view of all relevant circumstances. In addition, there are a few factors that should be considered when meal offers are involved.  They include:

  • whether the company is currently in negotiations with the Vendor
  • whether the offer is reasonable and within the boundaries of good taste considering the circumstances
  • whether the offer is intended to influence you or create an obligation on your part
  • the frequency with which the Vendor makes similar offers to representatives of the company

Based on the information provided, this should be fine.

Be an Integrity Advocate

Being an advocate is about speaking up not only about what may be wrong, but also about what is going right. Examples of ethical conduct should be highlighted and celebrated! 

We invite you to help expand the scope of “It Happened Here” to include positive stories of integrity in action in future issues of the Integrity Advocate by submitting instances of integrity in action to Business Integrity and Compliance, Room M01004 Findlay Campus or [email protected].