Tag Archives: Lee S. Richards III

DOJ Issues First FCPA Advisory Opinion in Six Years: A Note of Caution and Practical Takeaways

by Jamie A. Schafer, David B. Massey, Lee S. Richards III and Michael D. Mann

On August 14, 2020, the U.S. Department of Justice (“DOJ”) published the agency’s first Foreign Corrupt Practices Act (“FCPA”) Opinion Procedure Release (“FCPA Opinion Release”) since 2014.[1] In this guidance, DOJ confirmed that it would not prosecute a company for commercially reasonable payments made to a state-owned service provider in return for legitimate services rendered where there was no corrupt intent or diversion of money to any individual. As always, FCPA Opinion Releases should be read narrowly because the analysis relates to specific complex circumstances, many of which are not transparent to the reader.

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U.S. v. Connolly: “Outsourcing” a Government Investigation — And How to Avoid It

by David B. Massey, James Q. Walker, Lee S. Richards III, Shari A. Brandt,  Daniel C. Zinman, Arthur Greenspan, Rachel S. Mechanic, and Audrey L. Ingram

Summary

On May 2, in a widely-watched case, the U.S. District Court for the Southern District of New York found that the government “outsourced” a criminal LIBOR investigation to Deutsche Bank and its outside counsel, and thereby violated defendant Gavin Black’s Fifth Amendment rights when outside counsel interviewed the defendant under threat of termination from his employment.  United States v. Connolly, 16 Cr. 370 (CM), Memorandum Decision and Order Denying Defendant Gavin Black’s Motion for Kastigar Relief, ECF Document 432, slip op. at 19, 29 (May 2, 2019).  But because the DOJ did not use the defendant’s compelled statements at trial and the investigation was not otherwise tainted, the Court found no Kastigar violation and held that, even if there was, any error was harmless.  Connolly, slip op. at 40-41, 43-44.  

The Court’s exposition of the “outsourcing” issue has broad implications for internal investigations and corporate cooperation, but it need not end internal investigations or corporate cooperation as we know them.  By observing some basic precautions as described below, Government enforcement lawyers and corporate defense counsel can avoid similar rulings in the future.  At every stage of an internal investigation, companies should confirm and document that their major decisions are taken to satisfy their obligations to their shareholders to police and remediate their own activity, rather than to satisfy demands made by government lawyers.  The Government, for its part, should avoid instructing companies on the particulars of their internal investigations and not wait for the results of those investigations before beginning their own.  If both sides proceed in this way, internal investigations and corporate cooperation can continue  substantially in the way that they have for two decades.  Continue reading