Billy Jacobson has experience with the Foreign Corrupt Practices Act from a number of vantage points few can claim. He has been an Assistant Chief for FCPA enforcement in the DOJ fraud section. He has been a Senior Vice President, Co-General Counsel and Chief Compliance Officer for Weatherford International Ltd., a large oil and natural gas services company that does business around the world. Currently, he is a lawyer in private practice at Orrick and was previously a lawyer in private practice at other firms.
This Q&A explores Jacobson’s unique FCPA insight and experience.
Q: What specific vantage point of a DOJ FCPA enforcement attorney do in-house FCPA counsel and outside FCPA counsel fail to understand or appreciate?
One issue that often gets misunderstood is the notion of “trends” within FCPA enforcement. While certain actions can be grouped together by those looking to categorize, each case is handled by a Fraud Section prosecutor on its own merits as opposed to being thought of as part of a larger trend. For sure, there have been, for example, “industry sweeps” in the pharma and medical device industries and there have been many prosecutions of oil and gas companies, but I don’t describe those enforcement actions as trends.
Rather, the prosecutors go where the evidence leads them: if that is to conduct in China, so be it; if it’s to several medical device companies because one has been caught and there is reason to believe others are going about their business in the same fashion, so be it. And, of course, with oil and gas companies operating in the world’s most important industry and in the world’s most corrupt countries, one will unfortunately find corruption. The term “trend” to describe these enforcement actions is a misnomer, in my opinion.
Q: What specific vantage point of an in-house FCPA counsel do DOJ FCPA enforcement attorneys and outside FCPA counsel fail to understand or appreciate?
One thing that attorneys other than in-house counsel fail to appreciate sometimes is the level of effort required to create and then maintain a truly robust anti-corruption compliance program. When I was about to begin at Weatherford, someone told me that my entire perspective would change once I was in-house. I thought was that was overstated as I tried to be empathetic to the demands on in-house counsel in my other roles over the years. But, I distinctly recall looking up from my desk at the end of my first week in-house and thinking, “my entire perspective has changed.” It was true. Outside counsel gives recommendations about a company’s compliance program and the government (often) criticizes a program, but it’s the in-house counsel that actually has to make the program a reality and maintain the program. This requires daily coordination with other functions within the company and political negotiations with senior management and the Board in a way that is not always appreciated by those outside.
Q: What specific vantage point of an outside FCPA counsel do DOJ FCPA enforcement attorneys and in-house FCPA counsel fail to understand or appreciate?
In-house counsel have to work hard to maintain a “world view” and not become so enmeshed in just their company that they lose sight of what’s going on around them. This can be extremely challenging given the various things going on within a company at any one time. It is helpful for in-house counsel to attend events sponsored by associations of other in-house counsel, compliance conferences, government presentations, etc., so as to maintain this broader perspective. FCPA enforcement attorneys, for their part, should appreciate that in-house counsel are dealing with many, varied legal and compliance issues in a given day and it’s not all about the FCPA 24/7. Outside counsel may have a good perspective in this regard given their role in assisting companies with a variety of different legal and compliance challenges and the many different areas of expertise brought to bear by any one law firm.
Q: Which job category of the three is the most difficult and why?
Without question, in-house counsel has the hardest job of the three. First, if it ever was true that lawyers went in-house to relax and work 9 to 5, it certainly is not true anymore. Given the myriad risks faced by companies and the every-expanding reach of regulators, in-house counsel is constantly juggling many responsibilities. And, increasingly, they are doing so with fewer and fewer resources at their disposal. “Do less with more,” has become a cliché only because it is a mantra being constantly repeated in every C-suite in the country.
Q: Which job category of the three can best advance the objectives of the FCPA?
I’m really showing a certain bias here, but I think it is in-house counsel that can best advance the objectives of the FCPA. It’s with in-house counsel and corporations generally where the rubber meets the road. DOJ can bring all the cases it wants and outside counsel will do their best to defend those cases, but unless corporations live and breathe their anti-corruption program, corruption will remain a problem. Incidentally, I think we’ve seen tremendous strides in that direction in the past decade, at least in the US.
Q: In April 2012, while an in-house attorney, you wrote an article (previously highlighted in this post) in which you stated: “Current FCPA enforcement policy punishes rather than rewards companies that do all they can reasonably be expected to do to deter corruption and to cooperate with the government.” More than two years has passed. Comment on your previous comment – have things gotten better or worse?
I don’t think things have changed in that regard. I still believe the sort of reform I described in my Bloomberg piece is the best approach to FCPA enforcement reform. It wouldn’t require any legislation or formal rule making and would result in tangible benefits for the government. DOJ’s main priority should be prosecuting individuals involved in corruption and my proposal furthers that end while also stressing the importance of a robust corporate compliance program.