Former DOJ “compliance counsel” Hui Chen (currently a consultant at Ropes & Gray’s Insight Lab) was recently interviewed by Corporate Crime Reporter (CCR) on the state of corporate compliance.
Chen’s responses were generally one big word salad.
In and of itself, who really cares.
However, what makes Chen’s responses ironic is that while serving as DOJ “compliance counsel” she (rightfully) criticized the compliance community for the “lack of precision and intellectual rigor” in much compliance writing and commentary (see here for the prior post).
Chen wrote while at the DOJ:
“In my legal and compliance careers, I have been fortunate to have been trained to be precise in my writing: instead of using conclusory or inflammatory language, use facts; use data to back up – or better yet, replace – adjectives; distinguish between correlation and causation.”
“I am not advocating that all blog postings or marketing materials need to meet the precision standard of law review or scientific academic journals. I do, however, believe statements should be made with substantiation, evidence, and accuracy, and conclusions based on clearly articulated logic. You can still speculate, surmise, intuit, or opine, so long as you make clear that is what you are doing and not claim they are facts. Instead of generalizations and exaggerations, be more specific and concrete.”
“It would be a tremendous service to the compliance profession if we can all strive to hold each other accountable for precision, accuracy, and intellectual rigor in the statements we make.”
Following Chen’s advise and instructions, this post does just that.
Asked about the DOJ’s recent announcement that – in CCR’s words – “chief compliance officers would have to certify that compliance programs are well designed, adequately resourced and empowered to function effectively and work in practice,” Chen was asked “what percentage of compliance programs are well designed, adequately resourced and empowered to function effectively and work in practice?” and stated:
“I would say that would be a minority of companies’ programs. I also recognize that there is a standard problem. What is well designed for you might not be well designed for me. What is adequately resourced to you might not be adequately resourced to me. What do those adjectives mean? They are very subjective.”
“There is one trait of compliance officers that I have professional respect for – the good ones, the ones who do a good job. And that one trait is that they are never satisfied with their programs. One of the traits that I often see among compliance officers who do not perform as well is that they seem incredibly satisfied with their programs.”
“But we are talking about subjective standards, nothing objective, comparable and measurable here.”
CCR next asked if that meant “that a minority of compliance officers are conscientious and doing a good job?” and Chen responded:
“It’s not as simple as that. Sometimes someone can be very good, but they can have their hands tied behind their back every single day, every single moment.” Let’s take a competent, conscientious chief compliance officer. Let’s call it the CCCCO. And they are having difficulties within the corporation. “If they are lucky, the conscientious competent compliance officers are working within organizations that give them the resources they need, and support them in the activities they want to initiate. But I have seen many competent, hardworking, respectable compliance officers who are not given adequate resources. I have been in those situations where I was not given the resources I needed, even when I was very conservative in asking for the resources.”
“A conscientious compliance officer doesn’t ask for the moon. They ask for what they can justify, what is realistic and what makes sense. You have made careful decisions about the budget you are asking for. But even doing that, you get one tenth of what you ask for. And you are not given access to the people and the resources that you need to help you do your job.”
Asked if compliance officers should be concerned about the DOJ’s recent policy announcement, Chen stated:
“They are right to be concerned. I can see two possible scenarios. One is the conscientious compliance officer. Every path they try to take, they are being blocked. Everything they try to do, their hands are tied behind their backs. And then comes time for certification, what do they do? If they say no, I don’t believe our company’s program meets the standard, they are either going to be fired or forced out. If they do say yes, they are setting themselves up for potential prosecution. They would have signed something they don’t believe is accurate. They are stuck between a rock and a hard place.”
“I have also seen compliance officers who will sign anything. Once a company knows that they are heading toward a resolution and that at the end of the resolution, the compliance officer is going to have to sign, the company might say – let’s hire someone who will sign anything.”
Asked by CCR: “what do we know about corporate monitorships?” Chen stated:
“We know very little. We don’t even know how to measure them. How do we define whether a monitor is successful or not. We don’t have a set of measurements, we don’t have a set of standards.”
Asked if she was skeptical about the work of corporate monitors, Chen stated:
“I’m not skeptical. Nobody has information. I just need to see the data.”
“That said, I have experience in working for monitors. I can tell you that the approach is inconsistent across the board. One monitor will approach things very differently from another monitor. If your approach is different, what you are going to achieve is different. What might pass muster with one monitor, may not with another monitor.”
“With one monitor, a company may be able to get away with certain things, but with another monitor, the company probably wouldn’t.”
Asked “why can’t we have more conscientious and competent compliance officers and corporations?” Chen stated:
“That’s a question we can write books about. To start off, for most companies, if they were left to their own devices, they would not have compliance officers in their company. For many companies, they see compliance as a department that ties your hands. Why would you want that in your company? Because someone tells you – you have to have it. If you don’t have it, you are going to get into trouble. Or if you get into trouble, you have nothing to defend yourself with. You kind of need a compliance department.”
“You don’t know how many real life stories I have heard about compliance officers who are being interviewed and are specifically told – do you understand that we will pay you, but we don’t want you to do anything?”
You be the judge.
Were the above responses precise and evidence of intellectual rigor or peppered with conclusory or inflammatory language without substantiation? Chen speculated, surmised, or opined several times in her responses. Did she make it clear that is what she was doing and not claiming assertions as facts? Instead of generalizations, could Chen have been more specific and concrete?
As Chen stated while at the DOJ: “It would be a tremendous service to the compliance profession if we can all strive to hold each other accountable for precision, accuracy, and intellectual rigor in the statements we make.”