Yesterday the U.S. Department of Justice (DOJ) named formal federal prosecutor and private sector corporate compliance executive Hui Chen to the newly created position of compliance counsel within the department. Chen is tasked with assisting federal prosecutors with the evaluation of the corporate compliance programs of companies under investigation by the department. The recruitment of Chen is of a piece with the DOJ’s recent signaling that it would begin a more aggressive phase in the prosecution of individuals and companies for corruption and white-collar crime. (See “US Department of Justice Takes Aim at Corporate Execs”)
Assistant Attorney General Leslie Caldwell, head of the DOJ’s criminal division, initially announced the post at a speech before the Securities Industry and Financial Markets Association on November 2, 2015. “Our goal is to have someone who can provide what I’ll call a reality check,” Caldwell said. “We want to get the benefit of the expertise of someone with significant high-level compliance experience across a variety of industries.”
Chen certainly fits the bill. Having served with the DOJ as an Assistant U.S. Attorney in the 1990’s, Chen moved on to increasingly challenging roles as a compliance officer for Microsoft, assistant general counsel for Pfizer, and most recently as the global head of anti-bribery and corruption at Standard Chartered Plc, a U.K. based bank.
The creation of the position is not without its critics, with some questioning the need for a special appointment to advise federal prosecutors on a task that they have already been performing for years. Peter Carr, spokesman for the Justice Department's Criminal Division remarked, “There is a misconception that [the counsel] will help determine who to charge and who not to charge. Instead, [the counsel] will be assessing the company’s claims about their compliance program – i.e. if a company seeks to claim that it deserves credit for implementing a state of the art compliance program, which is a metric under the Sentencing Guidelines for a break on a fine. The counsel will help subject that to a rigorous analysis, something that a federal prosecutor does not have a lot of expertise in carrying out.”
What this all means for companies is that the DOJ will continue to follow through on its aggressive stance toward foreign corruption and that it will be specifically looking at anti-corruption programs to determine if they are more than just a pile of paper. During her speech on November 2, Caldwell stated, “Our hiring of a compliance counsel should be an indication to companies about just how seriously we take compliance.”