By Dylan Tokar 

The Justice Department in recent years has issued a series of policies designed to incentivize companies to invest in programs that ensure employees don't violate the law.

Few have been as central to those efforts as Andrew Weissmann, who was chief of the department's criminal fraud section from 2015 to 2017.

Mr. Weissmann helped launch a precursor to the FCPA Corporate Enforcement Policy, a leniency program that gives companies discounts on financial penalties if they voluntarily disclose potential bribery issues, cooperate with prosecutors and take steps to prevent future violations of the U.S. Foreign Corrupt Practices Act.

He also sought outside expertise to bolster the department's understanding of corporate compliance, hiring a former compliance officer for Microsoft Corp., Pfizer Inc. and Standard Chartered PLC to advise prosecutors on assessing the compliance programs of companies investigated by the agency. The compliance consultant left in 2017, and the position hasn't been renewed.

"Compliance officers are really important and have a really tough job," Mr. Weissmann says. "It's a very useful role for the U.S. government, which is trying to reduce the incidence of criminal behavior within companies. The goal is to try and figure out how do you make that role as effective as possible."

Mr. Weissmann, who later served on special counsel Robert Mueller's team investigating Russia's interference in the 2016 U.S. presidential election, will rejoin law firm Jenner & Block LLP in July. He spoke about the importance of corporate compliance officers in an interview with Risk & Compliance Journal. Edited excerpts follow.

WSJ: Since your time leading the Justice Department's fraud section, the DOJ has continued down a path of trying to get companies to invest in corporate compliance. Have these policies been successful?

Mr. Weissmann: One of the goals [of the FCPA leniency policy] was to have more consistency internally -- clear guidelines and metrics as to how prosecutors in the fraud section doing FCPA cases would evaluate companies on the criteria of voluntary disclosure, cooperation and remediation. I think on that point it has been successful.

My general sense from the defense bar is it has also been successful in terms of knowing what to expect. In other words, "If we do X, will we be likely to get result Y?" Companies can evaluate the risks and rewards if they decide not to voluntarily disclose or if they decide not to fully cooperate. They can look at the program, and they can look at the announced resolutions to see how other companies were treated.

WSJ: The DOJ no longer has a dedicated compliance expert and is instead choosing to focus on training prosecutors to have that expertise. Is that sufficient?

Mr. Weissmann: It's not that when I was there that we were outsourcing all of the compliance issues to one person. It's that we had a person who could run point to make sure that there was training and there was implementation at the line-attorney level.

We had somebody who was full time, overseeing a whole variety of compliance issues. Thinking through compliance policy, thinking through training, thinking through consistency in evaluating the presentations that were made by companies. Soliciting input from external stakeholders, including companies, in terms of what we should or should not be doing.

My biggest concern is not whether the department has somebody internally or externally -- there are advantages to both. One thing I liked about having somebody who had worked in a whole variety of companies is that it gave some comfort to companies that when they came in and had their programs evaluated, it wasn't going to be some DOJ lawyer who's never been in a company.

It's great to have training. But it's useful, like in many things, to have somebody who owns a program, because then you can make sure that there's consistency and that everyone is devoting the necessary time to the matter at hand.

WSJ: The DOJ in 2018 implemented a policy to prevent the department and its domestic counterparts from penalizing a company twice for the same misconduct. You have said you also proposed doing that on an international scale. Can you explain?

Mr. Weissmann: When I was at DOJ we wrote up two similar but related policies, which I would say were high-level principles more than anything else.

We wrote up one set of principles that was for how the department should deal with the piling-on problem when it comes to domestic counterparts. The second thing that we worked on was a similar set of principles that would work internationally.

If you want a company to voluntarily self-disclose, and you create a policy like the FCPA [leniency] policy in the U.S., it is much less effective if companies know they're going to have to pay 100% of the fine again to another foreign country.

If you believe in the piling-on policy as it applies domestically, there's little reason not to try and get that policy applied throughout the OECD [Organization for Economic Cooperation and Development] to member countries.

WSJ: The coronavirus pandemic is likely front-of-mind for a lot of compliance officers and prosecutors. How could the pandemic affect corporate enforcement?

Mr. Weissmann: I would suspect that in the short term, while it will be hard for companies and prosecutors to do in-person interviews, you may see a drop in individual indictments, meaning indictments of people. But I think you still will see the regular pace of corporate prosecutions because those are more amenable to interviews that can happen through videoconferencing, like Webex and Zoom.

WSJ: What should compliance officers be doing to protect their companies during the pandemic?

Mr. Weissmann: Generally speaking, what a good risk management system should look at is: "Are there particular stresses financially on a company right now and how might that affect behavior?" That's where you would want to reassess whether you have the right enterprise risk assessment for your company.

Write to Dylan Tokar at dylan.tokar@wsj.com

 

(END) Dow Jones Newswires

May 27, 2020 17:54 ET (21:54 GMT)

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