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FinCEN

When you think about the Financial Crimes Enforcement Network (FinCEN), you probably think about Bank Secrecy Act (BSA) reports, anti-money laundering, and uncovering financial crimes.

But according to a two-year investigation by BuzzFeed News, FinCEN is “an agency in turmoil, torn apart by turf battles, sinking morale, and internal chaos” and that “the unit struggles to hold the line against global money launderers, terrorist organizations, and drug cartels, and lies vulnerable to foreign threats.”

FinCEN’s issues are just a small part of the fascinating story about how Russia tried to use backdoor channels to infiltrate Treasury. If you have the time, it’s a great read.

It’s also a story about how low morale, and failure to respond to employee concerns can result in serious dysfunction.

The Risk of Weak Leadership

Buzzfeed reports that acting FinCEN director Jamal Al-Hindi, despite two decades of Treasury experience, damaged the agency with indecisiveness, failure to fill 70 open positions, and canceling popular programs for attracting young talent during his tenure from June 2016 to November 2017. Reports that once took days to approve, took weeks.

Twelve sources told BuzzFeed Al-Hindi was famous for being late to meetings, and another supervisor said his “failure to make decisions is legend at FinCEN. At one point, the previous director had him put together a decision-making seminar in hopes he might learn how to decision-make.”

That’s not the kind of leadership that inspires confidence. In 2017, FinCEN ranked lowest in morale among Treasury Department units and lost many veteran employees to the private sector.

Meanwhile BuzzFeed says, “At least 10 FinCEN employees have filed formal whistleblower complaints about the department. The whistleblowers say they tried multiple times to raise concerns about issues they believed threatened national security, but that they faced retaliation instead of being heeded.”

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What Low Morale Means for Risk

When employees aren’t happy, they are likely to leave—and they take years of institutional knowledge and experience with them. It’s bad enough when a key person leaves, but when they exit en masse, the loss of knowledge is amplified. Lessons learned are forgotten. Mistakes are more likely to be made. Decisions aren’t as well informed. Not to mention the fact that the organization becomes short staffed.

That leaves those left behind both unhappy and overwhelmed as they struggle to pick up the slack. It’s a vicious cycle.

Poor leadership doesn’t just cause an organization to make bad decisions. It can also inspire employees to search for greener pastures.

Make sure your employees are heard and provided specific direction about their role and the goals of your organization. Most employees want to do their best work and make a difference.

If someone speaks out about a problem, have processes in place so that input is welcome even if it’s hard to hear. Not only is it likely to address a potential risk, it also keeps morale strong.

Turf Wars Create Risk

Conflict between business units is common, but turf wars shouldn’t be. It’s one thing to disagree about who should handle an issue or how it should be handled. That’s something that can be worked out with strong leadership.

It’s another thing for one business line to sabotage another, hurting the organization as a whole.

That’s what BuzzFeed says happened with the Office of Intelligence and Analysis (I&A), the Treasury unit that monitors suspicious financial transactions that don’t involve U.S. banks. The agency wanted domain over FinCEN’s suspicious transactions database. At least 12 FinCEN employees reported the proposal to Congress or supervisors, fearing that it broke the law that’s supposed to separate intelligence agencies overseeing domestic activity from those monitoring international activity. I&A’s effort failed, but the agency allegedly held a grudge.

I&A administered the security keys that unlock classified data, but failed to remind FinCEN to apply for new keys when they were about to expire. It reminded its own staff, BuzzFeed says. As a result, when a bomb exploded at a London concert in June 2017, FinCEN employees were unable to help the British. They couldn’t quickly find information about the suspects or traces of other plots because they were locked out of classified databases. I&A says time and resource constraints prevented them from sending the email reminder.

Reducing Risk with a Collaborative Culture

Strong leadership is the key to preventing turf wars. An organization needs to make its goals and priorities clear to every staff member so they know what they are working towards. Demonstrate that the success of the organization depends on every department and unit achieving its goals and that helping other areas is a part of everyone’s job description. Have no tolerance for undermining behavior.

Failing to prevent a turf wars means more than having to deal with petty squabbling. It could also compromise your mission.

Don’t let low morale introduce risk to your institution. Make sure you have processes for evaluating both morale and leadership so you can identify weaknesses before they cause serious damage.

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