The Grueling Work of Ethics Enforcement

We have a rather pointed teachable moment about corporate ethics from London this week: an employment tribunal there has upheld a decision by Citibank to fire an employee who padded his expense report by a trivial amount — but then lied about it to ethics investigators, which cost him his job.

Our tale, first reported by the Financial Times, involves one Szabolcs Fekete, who had been an analyst with Citibank’s London offices since 2015. In July 2022 Fekete had to take a three-day business trip to Amsterdam. He took along his romantic partner for the trip, and while there he billed a coffee and sandwich for his partner to his corporate expense account. Except, Fekete tried to cover it up by submitting a receipt for two sandwiches and two coffees, all for him.

That decision violated Citi’s corporate policies, which expressly say that (1) spousal travel and meals are not reimbursable; and (2) all attendees whose meals are submitted for reimbursement must be listed on the reimbursement request.

Fekete’s supervisors became suspicious of his two-coffee two-sandwhich receipt, and asked him whether he was paying for anyone else on the business trip. At first Fekete insisted all the food was for him. Eventually the investigation was escalated to Citibank’s internal ethics team, and under new pressure Fekete admitted the truth: he had indeed billed his partner’s meal to the company. Citibank fired him last November.

Now comes the messy part: Fekete’s expense report was below the €100 daily limit that Citibank allows employees for incidental expenses on business travel. So was Citibank correct in deciding to fire him? 

Obviously Fekete believed not, because he filed a wrongful termination lawsuit against the bank last summer. (Fekete claimed he was on medical leave and taking medication immediately after his business trip, leading to his confused and erroneous answers about the expense report.) 

Alas for Fekete, however, the employment tribunal sided with Citibank, finding that the real ethical violation here was Fekete lying to bank investigators. 

The Hard Work of Ethics

This story makes me wince because obviously Citibank had to fire Fekete. The immaterial amount of money in dispute isn’t material to the issue. Fekete lied to the bank during an internal investigation. Once he did that, he ruined any trust he might have had with his employer, and employers cannot keep untrustworthy people on payroll. He had to go.

I’m sure most ethics and compliance professionals feel this way too. The challenge is getting everyone else at your enterprise to feel that way.

If reader comments to that Financial Times article are any indicator, plenty of people don’t feel that way. Why should Fekete lose his job, they asked, when so many other, more senior bankers commit even worse frauds against their employers? What harm did Fekete inflict on the bank, when his expenses were within the amount he was entitled to claim? As one person said, the key takeaway from this case is that “If you plan to swindle, aim higher, please. €100 is peanuts.”

That’s just the sort of dispiriting refrain that can leave a compliance officer banging his or her head against the wall.

This unfortunate outcome for Fekete reminds us all just how difficult it can be to cultivate a culture of ethics and compliance. It reminds us of the importance of alignment:

• Clear corporate values, such as honesty and trust;
• Clear training (you must never lie to the company, since that abuses the trust we place in you);
• Clear policies (no putting your partner’s drinks on the company tab, and full documentation of all expenses).

Citibank did have all those elements aligned in the right way, so I’m not surprised that the employment tribunal ruled in its favor. The question for other compliance officers is whether you’re sure that your own values, training, and policies align in the same manner — so that when the time comes for you to enforce policy against an errant employee, you have both the legal and moral high ground on your side. 

None of that means that all employees should always be fired for every misdeed. But corporate training and policies should reflect the importance of a trusting relationship, which is based on honesty. The company’s values, training, policies, and procedures all need to align on that message. 

Achieving that is a long slog, and one never truly finished — and the Fekete incident reminds us all just how true that point is.