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Former DOJ Fraud Compliance Counsel Resigns, Criticizes President
Hui Chen, formerly Compliance Counsel Expert in the DOJ Fraud Section, is speaking out about the reasons for her May 2017 resignation, which she has attributed to unacceptable conduct by the President and his Administration. Chen was hired by DOJ in November 2015 after serving as Global Head for Anti-Bribery and Corruption and Standard Chartered Bank. She was the first lawyer to hold this position at the DOJ.
In a June 25 LinkedIn post, Chen unleashed several criticisms against the President, including regarding lawsuits, conflicts of interest, and ongoing investigations. She said that she would “not tolerate” those conducts in a company, but “worked under an administration that engaged in exactly those conduct.” Chen further elaborated on her criticisms in a July 4, 2017 interview with CNN, stating that the firing of FBI James Comey tipped the scales in favor of resignation.
The DOJ had previously posted an opening to hire a new Compliance Counsel, but that listing has now expired. It is not clear if anyone has been hired to replace Ms. Chen.
DOJ Voices Continued Support for Robust FCPA Enforcement
On April 24, 2017, in a speech at the Ethics and Compliance Initiative Annual Conference in Washington, D.C., Attorney General Jeff Sessions appeared to commit to the continued aggressive enforcement of the FCPA. He noted that bribery "increases the cost of doing business and hurts honest companies that don’t pay these bribes,” and he explained that the Trump administration’s DOJ will enforce laws that protect honest businesses: “One area where this is critical is enforcement of the Foreign Corrupt Practices Act (FCPA). Congress enacted this law 40 years ago, when some companies considered it a routine expense to bribe foreign officials in order to gain business advantages abroad.” AG Sessions also emphasized that individuals, not just companies, may face increased FCPA focus.
These remarks come on the heels of comments from another senior DOJ official who recently noted that robust FCPA enforcement will continue. As previously reported, Trevor McFadden, the DOJ’s Criminal Division's Acting Principal Deputy Assistant Attorney General, noted that the DOJ remains "intent on creating an even playing field for honest businesses."
These remarks suggest that the DOJ will remain active in enforcing FCPA compliance issues, despite comments from then-candidate Trump that FCPA enforcement may be scaled back under his watch.
New DOJ Appointee Expresses Commitment to Enforcing the FCPA
In late January of 2017, President Donald Trump appointed Trevor N. McFadden as Deputy Assistant Attorney General in the U.S. Department of Justice Criminal Division, a position that includes oversight over the Fraud and Criminal Appellate Sections. The Fraud Section is in charge of enforcing the FCPA, placing the former Baker & McKenzie Litigation and Government Enforcement partner, who also served as an Assistant U.S. Attorney and Counsel to the Deputy Attorney General, in a key role to determine the future of FCPA enforcement under the new administration. On February 16, 2017, McFadden gave a speech at the Global Investigations Review Conference in which he proclaimed his dedication to the continued enforcement of the statute. While McFadden’s comments reflect Attorney General Jeff Sessions’ recent promise to enforce the FCPA, they contrast with President Trump’s 2012 comments that the FCPA is a “horrible law” that “should be changed.”
Above all, McFadden’s message was one of enforcement, enforcement, enforcement. He commented that the law “has been vigorously enforced” over its 40-year history, efforts which have “steadily increased over time.” McFadden specifically highlighted two important trends of this history of enforcement: transparency to businesses, and cooperation with foreign nations in the fight against corruption. McFadden’s emphasis on the “utmost importance” of working with other countries also signaled a continued commitment to what he called “important anti-corruption conventions,” including “the OECD Anti-Bribery Convention, the United Nations Convention Against Corruption (NCAC), the Convention on Transnational Organized Crime (UNTOC), and several others.”
In looking to the future of FCPA enforcement, McFadden called the law’s continued “fight against official corruption [] a solemn duty of the Justice Department…regardless of party affiliation.” He also emphasized that the Justice Department will continue to prioritize “individual accountability,” although he did comment that some people “may be unwittingly involved in facilitating an illegal payment under circumstances that do not merit criminal prosecution of the individual.” Finally, McFadden expressed that a company’s “voluntary self-disclosures, cooperation, and remedial efforts” will “continue to guide our prosecutorial discretion determinations,” along with the “penalty reductions for companies that self-disclose, cooperate, and accept responsibility for their misconduct” provided for in the U.S. Sentencing Guidelines. Interestingly, the only whiff of questioning past Justice Department approaches was McFadden’s mention of an upcoming review of the FCPA pilot program encouraging such company cooperation. However, plans to re-evaluate the pilot program were already in place under the Obama administration, according to an article McFadden co-wrote with colleagues at Baker & McKenzie in April of 2016. Notably, McFadden’s article called the pilot program “a step forward in providing companies and their counsel with more transparent and predictable benefits for self-reporting, cooperating, and remediating FCPA misconduct.”