McFadden Eyeing DOJ Exit, Too

The Justice Department’s top official to oversee FCPA enforcement was nominated this week to serve as a federal district judge in Virginia, yet another departure from the executive branch leaving corporate compliance officers wondering who is in charge over there.

The Trump Administration nominated Trevor McFadden earlier this week to the federal district of Virginia. McFadden had been acting deputy assistant attorney general of the Criminal Division since January. As such, he oversees the Fraud Section at the Justice Department, which enforces the FCPA and other white-collar crime laws.

When will McFadden be confirmed? That’s anyone’s guess. The Senate Judiciary Committee would hear his nomination first, and that group will be pre-occupied with the nomination of Christopher Wray to head the FBI, plus other usual business. And the Senate itself has only a handful of working days until its August recess. So McFadden could easily remain in his current post for many months.

Still, assuming McFadden does decamp to the judiciary, that leaves yet another empty seat at the Justice Department. To recap the current state of affairs, we currently have…

• An attorney general under suspicion of perjuring himself during his Senate confirmation hearing, by not disclosing multiple meetings he had with the Russian ambassador while working with the Trump campaign;
• A deputy attorney general under suspicion of concocting a false memo to justify firing James Comey from the FBI, when everyone and their uncle knew Trump wanted to fire Comey anyway;
• No assistant attorney general for the Criminal Division;
• An acting deputy assistant for the Criminal Division looking for an exit;
• No FBI director, although we do now have nominee Wray;
• Nobody nominated to replace the U.S. attorneys sacked by the Trump Administration earlier this year;
• No permanent head of the Fraud Section, since former boss Andrew Weissmann joined the special counsel Robert Mueller’s team last week.

President Trump did nominate someone to head the Criminal Division earlier this week: Brian Benczkowski, former Republican staff director for the Senate Judiciary Committee, currently partner in the Washington offices of Kirkland & Ellis. (That is, two days after Trump nominated McFadden’s new boss, McFadden got tapped for a lifetime appointment to the federal bench.)

Again, when will Benczkowski’s nomination see the light of day? Unknown. The Senate is pinned down on everything from healthcare reform, to the debt ceiling, to tax cuts, to the budget, to Trump campaign collusion with Russia, to Trump pressuring Comey to quit investigating a friend. And let’s not forget, it’s also Infrastructure Week, too.

This could be the real deregulatory push the Trump Administration will bring: not repeal of regulation, but disappearance of the regulators. I’ve heard this more and more often from compliance officers lately. Investigations that had been slouching along are now stalled; prosecutors working on your case for months are no longer at the other end of the phone. Nobody wants to work with the Trump Team because they’re incompetent, and if you stumble into the wrong conversation with someone you might need to lawyer up months later for a Senate committee hearing.

Thankfully, the Securities & Exchange Commission seems more organized. New chairman Jay Clayton has named directors for the Enforcement and Corporation Finance Divisions. (Good sign: Clayton asked acting enforcement director Stephanie Avakian to stay as permanent co-director.)

Sure, Clayton is more than anything else interested in loosening rules for IPOs. But at least he’s competent, and as far as anyone knows, he has never met the Russian ambassador. That passes for progress in Washington these days.