Former U.S. Deputy Attorney General Sally Yates was the featured speaker at the Texas General Counsel Forum’s 1st Quarterly Program held in Houston on February 20th at the Houstonian Hotel. Yates shared her insights on what General Counsel need to know about current compliance and enforcement trends.
Morae Global Managing Director Bret Baccus and Morae Global Directors John Mielitz, Jon Gross and Patrick Hennessey were joined by in-house and senior managing counsel at the quarterly event that featured a fireside chat-style dialogue with Yates who is a partner in King & Spalding’s Special Matters and Government Investigations practice.
“The opportunity to network with both new and familiar faces before the session coupled with Mrs. Yates as the distinguished guest led to a full capacity room,” says Mielitz. “The questions touched on topics that gave the audience insight into her vast, unique experiences in both public service and private practice.”
Moderated by Charles C. Correll, Jr., partner at King & Spalding, key takeaways from the dialogue include:
- Corporations should be encouraged to self-report and offer voluntary disclosure of institutional or individual behavior that has led to the inquiry or investigation;
- Offering full disclosure on a voluntary basis provides the opportunity to frame the prevailing issues in the most favorable light for the company and can preclude the DOJ or investigative body from jumping to adverse assumptions;
- Following the tenet of voluntary disclosure helps ensure that the DOJ understands that the illicit behavior is not how the company normally does business and establishes an early framework of trust;
- Conversely, making false representations, or attempting to respond prior to having a full understanding of the issues or behaviors involved that have led to the inquiry will immediately erode trust—it is okay to admit not knowing of behaviors as long as there is an accompanying internal investigation underway;
- In dealing with investigations, focus on the original allegation and corresponding employee(s) or business group, then engage in a “pressure test” process across an expanded sample of your organization until you have confirmation and assurance that the problems are isolated. The investigation does not need to be an ever-expanding probe; and
- Companies should have a corporate compliance policy and approach that spans the whole organization (especially true for large global organizations), but local regulations should also play a role in shaping compliance efforts.
“Yates’ perspectives on working with the DOJ during an investigation were especially interesting. She detailed the factors she thought would lead to a presumption of declination and the level of cooperation that a company should strive for,” says Gross. “Additionally, Yates spoke about what actions a company should take when public information comes out detailing potential violations.”
Yates’ thoughts on actions corporations should or should not take when faced with a government investigation included:
- Don’t allege prosecutorial misconduct by the agencies without hard proof;
- Do not engage in a scorched earth response. Be measured and deliberate in your response;
- Do not present facts until you know the facts;
- For events that require public discussion, utilize written statements first and save the press conferences until facts are known and responses well defined; and
- Organizations should contrast the illicit conduct with existing policy and commit to a full investigation.
The Texas General Counsel Forum is a community and network of more than 650 general counsel and senior managing counsel representing more than half of the Fortune 500 companies headquartered in Texas. Since 1998, the Forum has been serving and improving the lives of in-house leadership through the discovery and sharing of best legal practices.
For more information on the Texas General Counsel Forum, please visit https://www.https://www.tgcf.org/