More From the DoJ Compliance Counsel
Anyone looking for the latest about Hui Chen, hired by the Justice Department last fall to be its first-ever compliance counsel, look no further—she appears in a lengthy interview published by Ethics & Compliance Initiative this week, talking about what she wants to see from effective compliance programs.
The Justice Department’s Fraud Section hired Chen last October, to answer long-running gripes from Corporate America that federal prosecutors have a lot of nerve evaluating their compliance programs, when most prosecutors don’t have any experience actually running one at a large organization themselves. By my count this interview (which Chen gives jointly along with her boss Andrew Weissmann, chief of the Fraud Section) is only Chen’s second public appearance as compliance counsel.
Chen and Weissman don’t break terribly new ground in the article. Chen does shed some light on her background that I like to see: she had been a privacy attorney at Microsoft (good experience at a large organization dealing with modern issues); then had a spiritual renewal after the Sept. 11 attacks and left the profession to attend divinity school (bravo for knowing what’s truly important in life); and then returned to Microsoft as its first overseas compliance officer in China in 2007 (valuable experience overseas, and in one of the most challenging trade partners the United States has).
Some cynics say Chen’s hiring is more window dressing than serious gesture to the compliance community, and I do suspect the Justice Department had some intentions along those lines. But let’s be honest: Chen has experience with some of the most frustrating problems compliance officers face today. Nobody can complain that she’s a bad candidate. As I understand the arrangement, Chen’s role is the inverse of compliance counsel at corporations. That is, in a corporation, the compliance counsel provides advice about the law to the chief compliance officer. Here, Chen provides advice about compliance to the chief legal officer of the Fraud Section.
Could the department take more substantive steps to curb heavy-handed enforcement of Foreign Corrupt Practices Act enforcement? Sure. We could also take more substantive steps to bring about world peace. In the here and now, however, Chen’s hiring and what she says to Weissman & Co. still matter.
Several times in the interview, Chen stresses that she is not at the Fraud Section to advise prosecutors on FCPA cases alone; she is there to help the Justice Department with any cases that touch on the effectiveness of a compliance program. And one of her longest answers is in response to a question about “paper” compliance programs versus “real” programs. (“It’s not that difficult. It is something that you know, frankly, early on in one’s tenure on the job.”)
Chen and Weissmann also hit all the usual notes about effective compliance programs pushing the message, and the pro-compliance attitude, down throughout the entire organization. Empowerment, accountability, consequences—that’s nothing new to CCOs who have followed Justice Department statements before. It does, however, suggest that the Fraud Section will pay a lot of attention to process “in real life,” as Chen puts it.
That’s a fair and right approach for prosecutors to take, but for compliance officers trying to maintain a solid grip on behavior “in real life,” that means you need to document, document, document (to use the mantra of the great FCPA thinker Tom Fox).
The only point I challenge in the interview is Chen and Weissmann’s response to a question about the Yates Memo, the Justice Department’s revived policy of not granting cooperation credit unless a company turns over all evidence to identify individual wrongdoers. The question was whether a policy like that might discourage employee cooperation, and Weissmann said no.
I don’t share his rosy view. When companies start forcing employees to confess all they know to a crime or get fired; when executives who might face some liability can no longer count on support from the corporation… Well, I just don’t see friendly employee-company relations in that future. I’m waiting for the day some senior executive demands his new employment contract include a clause that company will pay for his own private counsel. We shall see.
And as a bonus: I mentioned that this seems to be Chen’s second public appearance as Justice Department compliance counsel. Here is her first, a Q&A with Weissman given at New York University last November.
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