“Greater transparency benefits everyone. The Criminal Division stands to benefit from being more transparent ..”
Assistant Attorney General Leslie Caldwell, April 15, 2015
Yet, time and time again, when the DOJ has an opportunity to be more transparent when it comes to Foreign Corrupt Practices Act enforcement, the DOJ circles the wagons and retreats behind speculative and specious legal arguments.
The latest example concerns the DOJ’s continued efforts to block public release of the Siemens’ monitor report, a condition of settlement from the still record-setting $800 million FCPA enforcement action against Siemens in 2008. The DOJ’s resistance is all the remarkable given that Siemens’ post-enforcement action monitorship ended long ago and the case is no longer active.
This post highlights the DOJ’s arguments in this recently filed brief in which the DOJ (along with Siemens and its monitor) is opposing public release of the Monitor reports.
As highlighted in this recent post, in a similar (albeit not FCPA) setting, U.S. District Court Judge John Gleeson (E.D.N.Y.) recently ordered the HSBC monitor report to be released.
Let’s hope that U.S. District Judge Rudolph Contreras (D.D.C.) to whom the Siemens case is assigned, like Judge Gleeson, champions transparency and does not acquiesce in secret criminal law enforcement.
Moreover, from a policy matter the DOJ should want the Siemens monitor report in the public domain as it would be a valuable educational resource for corporate counsel and compliance professionals on a variety of topics. This is particularly true because in its 2008 sentencing memorandum the DOJ complimented Siemens remedial measures and stated that the company “set a high standard for multi-national companies to follow.”
It strains credibility for the DOJ to now want the specifics of this “high standard for multi-national companies to follow” shielded from public disclosure.
In its brief, the DOJ states, in pertinent part as follows (internal citations omitted).
“Disclosing [the information in the monitor’s report] would .. harm the DOJ’s ability to obtain similar information from other companies in the future and its ability to reduce recidivism of corporations that commit crimes. Companies like Siemens that have been convicted of crimes often need monitors to review their compliance programs and ensure that those programs are effective. If the information that a monitor gives the DOJ can be obtained through FOIA [the Freedom of Information Act], companies and their employees are not likely to be candid with monitors. This would harm the DOJ’s enforcement efforts because the DOJ would be less likely to receive reliable information from companies under monitorships. Consequently, the DOJ would have inadequate and insufficient information to determine whether companies had improved their compliance programs as required by agreements between the companies and the DOJ.
FOIA also exempts from disclosure information that the DOJ received from the Monitor because the DOJ used that information in its internal deliberations when deciding whether Siemens had adequately enhanced its compliance program. Siemens had agreed to have a monitor evaluate Siemens’ compliance program and report to the DOJ about the effectiveness of its program. DOJ then used that information to determine whether Siemens had met its obligations under its agreement with DOJ. FOIA protects from disclosure information that is used in internal deliberations in order to promote candid discussions and optimum decision-making inside government agencies.”
Another interesting aspect of the DOJ’s motion is how it describes a monitor as being a de facto government agent and how the DOJ, as a practical matter, outsources post-enforcement action law enforcement requirements to the monitor.
“The DOJ relies on monitors because DOJ’s limited resources are focused on investigating and prosecuting corporate crime, not acting as monitors.”
The DOJ had internal discussions where its attorneys reviewed, considered, and deliberated on the information, recommendations, and opinions that the Monitor gave the DOJ. The DOJ had these discussions to evaluate whether the Monitor was carrying out his mandate and whether Siemens was complying with its obligations under the Plea Agreement. The Monitor’s work was crucial to this process. The DOJ’s deliberative process was driven largely by the information that the Monitor gave it, including the Monitor’s conclusion whether the company’s compliance program was effective. The DOJ relied on the information gathered by the Monitor and the Monitor’s input, such as his reporting, opinions, and recommendations, when suggesting changes to subsequent work plans and reviewing annual reports. The Monitor’s information directly impacted the DOJ’s analysis about whether Siemens had satisfied its obligations under the Plea Agreement and whether the monitorship should be continued for an additional year.”
The most incredible of the DOJ’s arguments in the brief is the following.
“Through his service, the Monitor provided an important benefit to the DOJ and the public by boosting confidence that Siemens was implementing an effective compliance program that significantly reduced the likelihood of recidivism.” (emphasis added).
How is the public even capable of assessing this issue when the public is completely in the dark about what the monitor did and found?
If the DOJ is all for boosting public confidence in law enforcement, there is something the DOJ can do.
Advocate for the release of the Siemens monitor report.
Yet the DOJ is doing the exact opposite and I have my own suspicion as to why and it has nothing to do with the issues discussed in the DOJ’s brief.