Why Are We Falling for the Department of Justice’s Sales Pitch?

sellI just spent $1200 to listen to the Department of Justice’s sales pitch that I should bring in my clients to confess their crimes.

Let me explain.

Last week was the annual ABA White Collar Crime conference in San Diego. It’s a three-day conference, filled with panels on topics like the FCPA, internal investigations, health care fraud, money laundering and the like.

There are some great things about the conference. As my colleague Matt Kaiser has written, there are lots of networking opportunities. The big law firms and consulting firms throw lavish parties with free food and drink. You get a chance to meet the friends of friends and expand your networking circle. I, for one, consider myself lucky if I meet one or two people and get to talk with them in depth.

There are also some smaller dinners—thanks to Jeremy Matz  for organizing an awesome one this year (and inviting me!)—where you can chat without shouting over the music and get beyond small talk.The Women’s White Collar Defense Association holds its annual retreat the day before the conference starts.

All in all, it’s probably the best place to meet as many people as possible in the white collar defense bar from across the country.

There are also some great speakers and panel topics. Many of the speakers are knowledgeable, funny and humble. A few of the speakers are . . . not.

One of the unique aspects of the ABA conference is that although its audience is the private defense bar (with a hefty registration fee to prove it), the conference organizers pride themselves on inviting prosecutors to speak. This year, the conference had such notables as Sally Yates (Deputy AG), Patrick Stokes (chief of the FCPA unit in the Fraud Section) and Andrew Weissman (Chief of the Fraud Section).

This sounds great in theory.

The defense bar gets to hear from the government about past trends and upcoming initiatives. If you handle mostly health care fraud, it is helpful to hear that the government intends to focus more on the medical device industry than the pharmaceutical industry. If kickbacks are going to be the Next Big Thing, then you can make sure your clients have the most robust compliance policies in place to prohibit them.

In reality, though, it means that we listened to various prosecutors tout how important it is for us to convince our clients to self-disclose any wrongdoing to DOJ.

Apparently, at the first sign of anything questionable—even before we’ve figured out if anything bad happened—we should jump in a cab, head to Main Justice and knock on the door, begging for credit for self-disclosure and cooperation.

I may be exaggerating a little for effect here.

The DOJ lawyers at the conference don’t put it quite that way. Paraphrasing them, they say things like:

“Self-disclosure will be a key factor when we evaluate the consequences of the conduct.”

“Complete cooperation means that the company ‘gets it’ and is the only way DOJ will consider declination in a case.”

“In my experience, companies that cooperate from the start will be treated the most leniently once everything is known.”

Practically out of mike range, the prosecutors will also mutter, teeth gritted: “Of course it’s the target’s decision whether to cooperate or not. You don’t have to cooperate. That’s your choice.”

This approach—to quickly rush to DOJ to win cooperation credit—seems to be the sad reality of current white collar practice when you represent large companies. (Don’t even get me started in the antitrust amnesty program and the problematic incentives that program creates.)

At the ABA conference, I sat through a panel on asset forfeiture where the government lawyers calmly explained how helpful it was when the defendant disclosed where all his assets were, so that the government could seize them more easily. In the FCPA panel, we heard a nearly mathematical calculation as to how much money a company saved in fines by cooperating in a bribery investigation, with a side lament as to how much more it could have saved if it had just done the right thing and self-disclosed too.

Of course, the ABA conference’s focus is on big firms representing big companies.

Big companies face a very different calculus than individuals when they decide whether to cooperate. Corporations do not go to jail; they very rarely are debarred from government contracts; they usually just face massive fines. It’s an economic decision to cooperate—a matter of public relations and shareholder value going forward. There’s nothing wrong with that. I’ve represented companies and engaged in the same calculation.

But here’s the thing: I represent people. People who can be sent to jail at the end of the case. People for whom paying a massive fine is not just a matter of figuring out how much to reserve from operating profits that year but rather figuring out whether they will lose their kids’ house along the way.

But whether you represent people or companies, I have one request: As a defense bar, we need to stop making cooperation with the government our default position.

Yes, my client may ultimately cooperate because it’s the best decision among a serious of impossibly difficult choices. But cooperation is not going to be the starting place of our discussions about what choice to make.

The starting place is that we plan to fight the government from beginning to end, and we are going to prevail. The starting place is that we plan to make the DOJ actually do its job: find the wrongdoing, investigate the wrongdoing, and put together a strong case that would survive a trial.

If the government wants to take my client’s liberty, then the government is going to have to work damn hard for it. That’s how the system is supposed to work. The government tries to prosecute our clients, and we fight back.

In the end, I’ll still go to the ABA conference every year. I’ll sit through the panels where DOJ officials sell me to convince my clients cooperate. I’ll take that guidance back to my clients to advise them the best I can about the risks they face by going to trial. I’m not an idiot or an absolutist. I’m not going to advise every client not to cooperate.

But I can guarantee you that I’m not starting every discussion with a new client talking about the benefits of cooperation.

I’m just not buying what DOJ is selling.

This entry was posted in DOJ Statements, Uncategorized. Bookmark the permalink.

2 Responses to Why Are We Falling for the Department of Justice’s Sales Pitch?

  1. I’d be very interested to hear your comments on the Antitrust Division’s leniency program.

  2. Pingback: The Five Most-Read Posts of 2016 (and My Five Favorite Posts This Year) | Grand Jury Target

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