Tuesday, April 13, 2010

Clarifying Comments

When I launched this blog in July 2009, part of my mission was to "explore the more analytical 'why' questions increasingly present in this current era of aggressive FCPA enforcement" and to "foster a forum for critical analysis and discussion of the FCPA (and related topics) among FCPA practitioners, business and compliance professionals, scholars and students, and other interested persons (see here for the complete mission statement).

From time to time, I am in contact with journalists who are interested in learning more about the FCPA, FCPA enforcement, and the issues explored in this blog.

I enjoy these exchanges, including the public service component of assisting (mostly non-lawyer) journalists better understand the FCPA and FCPA enforcement issues.

It is also gratifying to have one's ideas and scholarship covered by various outlets.

However, from time to time, one's ideas and opinions can be taken a bit out of context and that is, I believe, what occurred in the Corporate Crime Reporter's ("CCR") recent piece (see here).

Thus, the purpose of this post is to provide important clarifying comments - some of which appear in the more "complete" version of the interview in the print edition of CCR.

The CCR piece suggests that I am "constantly butting heads with FCPA Inc." I don't believe this is accurate. I have friends working at law firms who have an FCPA practice and through this blog, I have come to know many other FCPA practitioners, some of whom have accepted my invitation to guest post in this space. Other FCPA practitioners have told me "thanks for the very helpful blog ... [it] goes a long way toward knitting together the FCPA and anti-corruption bar."

In speaking of "FCPA, Inc." I am speaking of an issue previously covered by other news outlets, including the Washington Post (see here). Among other things, the Post pieces notes that "FCPA business is booming, a welcome growth area for Washington law offices just as work on mergers and securities offerings has begun to wane." The Post piece note as well that also "sharing in the bonanza [are] accounting firms, forensic computer specialists and a growing army of compliance consultants." The Post piece concludes with this "... don't think law firms aren't playing off those fears by aggressively marketing their services as investigators, risk mitigators and compliance counselors" and the article notes that "the result is [a] sudden flood of labor-intensive legal work for both partners and associates, particularly in the local offices of big international firms."

To suggest, as the CCR piece does, that my position is that the DOJ's enforcement of the FCPA "is all a facade" is not true. The author of the CCR piece has a copy of my draft article titled "The Facade of FCPA Enforcement" which clearly states on page 1 that "This article does not argue, or even suggest, that every FCPA enforcement action is unwarranted or that no company or individual has never violated the FCPA. Rather, this article demonstrates that a significant majority of recent FCPA enforcement actions are a façade and argues that addressing the façade and subjecting FCPA enforcement actions to judicial scrutiny is in the public interest and of vital importance to those subject to the FCPA as well as the broader marketplace." When presenting my paper at Georgetown Law School on March 22nd, I also made these clarifying remarks.

The CCR article discusses my contrarian position regarding Mark Mendelsohn's defense of the Siemens matter and my follow up "point-counterpoint" exchange with Billy Jacobson that I included on my blog with his written permission (see here and here). What was a respectful exchange and critique has been recast in a way that may leave the appearance that I was questioning the integrity of these individuals. Do I disagree with the legal and policy positions of these current and former DOJ officials - often times yes. Am I accusing them of any actual improper conduct - most assuredly no.

Last week the Wall Street Journal ran a piece titled "SEC Lawyer One Day, Opponent the Next" (see here). Among other things, this article noted that "Iowa Sen. Charles Grassley, a Republican who has criticized the SEC's revolving door, says the commission could include more-stringent limitations than the law requires in employees' contacts, but more disclosure would help, too."

In talking about the undeniable fact that most DOJ FCPA enforcement officials have big law firm FCPA experience and that most leading FCPA practitioners have DOJ or SEC FCPA enforcement experience, I am merely extending the WSJ's SEC piece to the DOJ in the FCPA context.

I continue to believe, like many others, that such dynamics can raise red flags and have the potential for conflicts of interest. In a similar vein, my December 2009 post titled "Voluntary Disclosures and Role of FCPA Counsel" talks about potential conflicts of interest present in representing corporate clients in an FCPA enforcement investigation or action. (That post bolds the word potential at least 15 times).

Finally, I was clear in my more complete comments to CCR that I was raising issues of potential conflicts of interest and potential red flags. Left out of the CCR web article are my significant clarifying comments that I am not accusing anyone of anything, but rather raising, as others have, significant public policy concerns that, as evidenced by the WSJ article, are being raised and debated at the highest levels of government as well.

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