Gifts & Opinion Releases

7 Jul

Matt Kelly from Compliance Week is an invaluable resource.  I just saw a tweet of his (yes, I peruse some social media) where he eagerly linked to a new Opinion Release; the first of 2011.  It involved proposed travel.

Let me first describe the initial reaction I had, then I’ll talk about the release itself.  My initial reaction is that this was seriously overlawyered, and—this might be counterintuitive—I worry about this company’s compliance program.  This is, simply put, not a situation that should have gone to the DOJ.  In-house, think about how this situation came about.  First, someone in legal finds out about the upcoming trip.  They consult with their boss.  It goes to the General Counsel.  They involve outside counsel.  It probably goes to the Board of Directors.  A decision is made to go through the opinion release program.  A presentation is made up for internal purposes, then for the DOJ, certainly involving a lot of outside counsel time.  They wait a month, and get back an answer that any reasonably competent anti-corruption compliance officer could have given them on day 1.  This tells me that the Company does not have reasonably competent compliance personnel.  This is a question that should never have gone to the DOJ.

So this Company is not getting good advice.  That’s worrisome.  I also think this company got taken to the cleaners by their outside counsel.  I have no idea who it was, but they should be fired.  Any halfway decent lawyer should have told this company, “that’s not a really problematic trip, go for it.”  The problem here is that you’ll never hear outside counsel utter that sentence—or heaven forbid put clear, unambiguous, un-caveated approval in an opinion letter—as long as we’re alive.  There’s being risk averse and there’s taking your clients for a ride.  Outside counsel here saw a payday.  This is a 5-minute phone call kind of case.  Maybe there’s more to the story, but it doesn’t appear so.  Maybe this is the beginning of a course of conduct, and the company wanted some air cover.  Maybe, but I doubt it.

And no, this is not hindsight.  I’ve done this for a living, and this was not a hard one.  I’m open if anyone disagrees.  Just comment on the post, and I’m happy to engage in a discussion about it.

Here’s what the company disclosed:

The company arranges adoption.  They want to bring in some government officials in countries where they arrange adoptions.  There’s no special decision in the works by these officials.  The officials will be chosen by the agency, not by the company.  No family members will travel, costs will be paid directly to the providers, no cash to be given to the officials.  Air is economy class.  Souvenirs will be modest, and branded.  It’s a two-day visit, no excursions.

The DOJ cited two prior Releases from 2007 where they approved travel citing no non-routine decisions being expected, no selection by the company of who travels, paying the providers directly, etc.

There’s nothing new to learn here.  As I said, this isn’t a close call.

I don’t know who this requestor is, but I have a feeling we’re going to be hearing about them in the news.

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7 Responses to “Gifts & Opinion Releases”

  1. Charles July 8, 2011 at 8:01 am #

    Agreed. I feel the same way about outside counsel and their ability to make a payday out of what should be simple advice. As for in-house counsel, they are scared to death given the current environmnet and I assume they took a better safe than sorry approach that was supported by upper management. After all, they saw the outside counsel fees and advice as an insurance policy.

  2. thebriberyact July 10, 2011 at 4:05 am #

    In defence of out-house counsel can we just say that we can think of a few who would have had a two word answer to anyone asking if they should organise this trip…

    “No problem”.

  3. Matthew McGinn July 10, 2011 at 4:45 am #

    One possibility is that the government agency involved would not agree to send its officials without some form of confirmation from the DOJ that the trip would not violate the FCPA and they were not satisfied with prior opinion releases on this point.

Trackbacks/Pingbacks

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