Carnival’s Ethics and Compliance Chief Departs

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Peter Anderson was hired by the cruise-line operator in 2019 in the wake of legal troubles stemming from environmental violations

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A person with knowledge of the situation said the decision made by Mr. Anderson was a personal one unrelated to the company. Attempts to reach Mr. Anderson was unsuccessful.

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Mr. Anderson, who before this led the white-collar and compliance group at law firm Beveridge & Diamond PC and was a former federal prosecutor, was initially engaged by Carnival to conduct a compliance program assessment.

He was appointed in 2019 to serve as Carnival’s head of ethics and compliance, reporting to the company’s board and to the chief executive, after prosecutors said the company violated a 2017 probation agreement stemming from a guilty plea made by one of its subsidiaries. In that original agreement, the company said it would pay a $40 million fine and submit to a court-supervised environmental compliance program after illegally dumping oily water overboard and attempting to hide it. The five-year supervision required an independent outside auditor and a court-appointed monitor.

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The decision to appoint Mr. Anderson was part of a $20 million probation violation settlement made in 2019.

In January this year, the subsidiary pleaded guilty to a second probation violation because the Justice Department said the company had failed to set up an independent internal investigative office and was ordered to pay an additional $1 million fine.

The Justice Department in announcing the second violation noted that the company’s court-appointed monitor and third-party auditor told a judge in October 2021 that the failure to set up and maintain an independent internal investigative office “reflects a deeper barrier: a culture that seeks to minimize or avoid information that is negative, uncomfortable or threatening to the company, including to top leadership.”

The January settlement with the Justice Department required Carnival to restructure its investigative office so that it reported directly to the company’s board, and required that the investigative office must be given authority to initiate and determine the scope of its investigations independent of the company.

In an April report filed to a federal-district court in Florida on the expiration of the five-year monitorship, Carnival said that over the past five years it had evolved into a company with “an enhanced, focused commitment to environmental compliance through the transformative development of a just culture, governance changes that prioritize environmental compliance, and a substantial increase in resources to support environmental stewardship.” The company pointed to the appointment of a chief ethics and compliance officer as a member of the executive team reporting to the CEO as one major structural improvement.

Justice Department attorneys, in their reply to the report, countered the company’s narrative, saying the monitor and the outside auditors “encountered serious efforts to limit the scope of work they would perform, to limit the budget necessary to accomplishing that work, and their authority to conduct truly independent work.” The lawyers added that upon the close of the monitorship they wished “the company every success in achieving a compliant and constantly improving corporate culture. But we also stand ready to bring the next enforcement action if there is backsliding.”

Since then, Carnival has also said its CEO, Mr. Donald, would step down, becoming vice chair of the company effective Aug. 1. He will be succeeded by the company’s current operating chief, Josh Weinstein.

Write to David Smagalla at [email protected]

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Credit: www.wsj.com /

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