Justice Dept. Names Key Criminal Division Boss

Compliance professionals wondering about the future of FCPA enforcement in the Trump Administration now have another clue: the Administration has named the Justice Department official who will oversee those cases.

Trevor McFadden will be deputy assistant attorney general in the Criminal Division. So said a few published reports Wednesday night—and more importantly, so says his LinkedIn profile. That makes him the point-person for prosecutions of corporate misconduct, including FCPA abuses.

Apparently McFadden will oversee the Justice Department’s Fraud Section as a whole. That means enforcement of the Foreign Corrupt Practices Act will be one of his responsibilities, among several others. Right now the Fraud Section has several units: FCPA; healthcare fraud; securities fraud; and policy & training. McFadden could re-arrange those priorities, or theoretically even allow U.S. attorneys to prosecute those cases in their individual districts—although that allows for multiple standards of enforcement, so that seems unlikely.

McFadden

What do we know about McFadden? He worked at the Justice Department 2007-2009, as counsel to then-Deputy Attorney General Mark Filip—so McFadden probably helped Filip draft “the Filip Memo” of 2008, one of the occasional Justice Department policy documents that outline what prosecutors should consider when deciding whether to charge a company with misconduct. The Filip Memo’s big claim to fame was that it dropped any requirement that a company waive attorney-client privilege, or cease covering employees’ legal fees. All a company had to do to win cooperation credit was provide all relevant factual evidence to investigators.

We don’t know McFadden’s role there for a fact, but it does seem likely. Especially since McFadden also spent four years as a partner at Baker McKenzie, a heavy-hitter in law firm world that specializes in FCPA defense. Then, like any good partner at a Big Law firm, he churned out a series of papers and legal bulletins. A few of their titles:

• ‘Focusing on Individual Accountability for Corporate Wrongdoing’ (November 2015);
• ‘Evolving Legal Standards for Compliance Officers’ (March 2016);
• ‘Self-disclosure of Corruption Offenses to the U.S. and U.K. Authorities: Where Are We Now?’ (August 2015).

All of this seems in step with Attorney General-designate Jeff Sessions’ views about prosecution—namely, that individuals commit crimes rather than corporations, so they should be the targets. Will we still see FCPA enforcement? Yes, I believe. But we may see more declinations, or some formalization of last year’s FCPA Pilot Program, where meeting the criteria for cooperation automatically means no monetary penalties or full declinations.

I’m sure we’ll know more about McFadden soon enough, and we still need to see many other Justice Department appointments before we get a full sense of FCPA enforcement in the Trump Administration. Plus, we still need to hear from Jay Clayton, Trump’s nominee to head the Securities and Exchange Commission, for his views on how to enforce the civil provisions of the FCPA.

But now we know at least one person who will have influence.