January 26, 2016
Today’s blog post is an interview with Andrew Weissmann, Chief of the Criminal Division’s Fraud Section at the DOJ. Mr. Weissmann has had a long career in public service. He served as the General Counsel for the Federal Bureau of Investigation from 2011 to 2013. Mr. Weissmann previously served as special counsel to Director Mueller in 2005, after which he was a partner at Jenner & Block LLP in New York City. From 2002-2005, he served as the Deputy and then the Director of the Enron Task Force in Washington, D.C., where he supervised the prosecution of more than 30 individuals in connection with the company’s collapse. He was a federal prosecutor for 15 years in the Eastern District of New York, where he served as the Chief of the Criminal Division.
TT: First of all, congratulations on your appointment as Chief of the DOJ’s Fraud Section, which was announced almost exactly a year ago. What has surprised you most in this position since you officially stepped into the role?
AW: Thank you, it’s been just about 10 months since I started in this position and there are two things that have surprised me. First, the size and nature of the matters that we deal with in the Fraud Section. The typical case we handle is a large, international investigation of a complex nature that often involves relationship-building with international counterparts and complicated negotiations. Second, the level of sophistication of attorneys on the team, who are smart and dedicated people and with whom I am delighted to work.
TT: Our readers are closely watching developments in the US-EU Safe Harbor Agreement negotiations. How does the recent invalidation of the agreement affect enforcement of international FCPA cases?
AW: In the context of voluntary cooperation, companies should be looking at what is legally required in terms of data privacy. I cannot recall a situation where a company that was seeking cooperation credit was unable to produce the necessary information because of foreign data privacy laws. In other words, we expect that companies choosing to cooperate understand what is legally required of them and can work to find a legally sound solution. We understand that it is not always easy; however, a company will not receive cooperation credit where it is simply using data privacy laws as a shield to avoid providing evidence.
TT: Assistant Attorney General Leslie Caldwell announced in November that the FCPA Unit was planning to increase its capacity by hiring 10 additional prosecutors – where will the efforts of these additional lawyers be focused?
AW: That’s correct, in addition to the 19 line attorneys currently working in the FCPA Unit, we are adding 10 more, as well as 5 supervisors. These additional resources will help us enhance the “stick” side of the carrot and stick approach we use in the Fraud Section. The focus will be on companies that do not self-disclose, and on parts of the world where there is a sense of “practical immunity” due to common misperceptions that investigations are unlikely to take place there. Also, as we don’t just rely on self-disclosures, we need additional resources to follow other various leads, such as referrals from international enforcement agencies and governments, statements made by whistleblowers, and results of paper trails.
TT: How can you explain the relative dearth of FCPA prosecutions in 2015 when compared with previous years?
AW: I would say that 1 year isn’t long enough to tell the whole story. If we just wait three months, it might be a very different picture. The other part of the answer is that we are prosecuting more individuals. This focus on individuals adds a lot of complexity to our investigations and makes for a more time consuming process overall. And on top of that, we have a very high number of open investigations. The volume of matters per attorney was one reason I made the pitch for more resources.
TT: When the Yates Memo was released in September last year, there were many concerns raised by companies, such as timing of self-disclosure, scope of investigation, and, even, constitutional issues relating to privilege and corporate decision making. How would you recommend companies, and particularly compliance professionals, approach this issue, especially when it may involve having to bring forward top executives?
AW: I think it’s important not to overreact – the investigation of suspected individual misconduct has always been a priority of federal prosecutors, so in that sense the issues being raised have existed both before and after the Yates Memo. The Memo clarifies that if a company wants to receive any cooperation credit, it must identify culpable individuals and provide all relevant facts relating to these individuals to the DOJ. In other words, providing this information is not just a factor, but a prerequisite for receiving cooperation credit.
TT: What has been the effect of the Yates Memo so far – have you seen a chilling effect on self-reporting or cooperation?
AW: It is too soon to tell. We’ll have to wait until we have a bigger sample to see if there are any trends.
TT: Do you have plans to update the 2012 Resource Guide?
AW: Yes, we are actually looking into it right now. There have been some clarifications and new issues since the last edition that would be important to include in the updated version.
TT: And finally, what are three things you would like to focus on in 2016?
AW: First, we plan to create a corporate strike force. It is important for us to make it clear to everyone that no industry is too big to fail or too important to be prosecuted. Second, in the FCPA Unit we’ll continue to focus on the carrot and stick approach by emphasizing the benefits of self-disclosure and cooperation with federal investigators. Finally, in the Securities and Financial Fraud Unit, we have important investigations to pursue, most prominently the VW and Takata cases.
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