Compliance Counsel Hui Chen and Fraud Section Chief Andrew Weissmann at NYU Law School

Hui Chen made her first appearance in her new role as Justice Department compliance counsel.

Chen appeared at a roundtable discussion at NYU Law School on Friday alongside Fraud Section chief Andrew Weissmann.

The session was hosted by NYU Program on Corporate Compliance and Enforcement (PCCE) co-director Jennifer Arlen.

The session was not open to the public and reporters were not invited.

The room was filled with about 90 corporate compliance counsel, in house counsel, corporate criminal defense counsel and enforcement officials, with a smattering of academics.

A video of the presentation was made public by Arlen, but a second session, where Chen and Weissmann took questions from the lawyers in the room was not recorded.

Chen previously worked in house compliance at a number of major corporations —  Standard Charter Bank, Pfizer, and Microsoft in China.

“I was Microsoft’s first in field compliance person four months before the Beijing Olympics,” Chen said. “I moved to Beijing in April 2008. My first job was to review all of the hospitality offerings related to that event. It was an experience that made me not want to go to any of the Olympic events. (She didn’t go.) I ended up going to the Paralympics afterwards. It was less commercial.”

Arlen asked Weissmann what motivated him to create the compliance counsel position.

“At least two parts of the Filip factors deal with compliance issues,” Weissmann said. “The same way that the Fraud Section has experts in all sorts of fields, I thought it would be useful to have somebody who worked with the Fraud Section full time who previously had experience at a company. Someone who could bring that expertise to bear in analyzing those Filip factors with us.”

When Weissmann was a partner at Jenner & Block in Washington, D.C., he advocated on behalf of the U.S. Chamber of Commerce for a corporate compliance defense.

Arlen asked Weissmann whether the compliance counsel is a backdoor way to implement a corporate compliance defense.

“The answer is no,” Weissmann said. “Under American law, there is a no compliance defense. There are two parts of the Filip factors that give some credit for compliance — if you have an adequate program at the time of the crime and if you have adequately remediated. Some might say this (the creation of the compliance counsel) is the reverse (of a compliance defense). We are trying to make sure that we are separating the companies that get it –  who are trying to meet those two criteria — from companies who have a mere paper program. We are trying to have heightened scrutiny of those two factors.”

Some, like Duke Law School Professor Sam Buell, have raised doubts about the need for a compliance counsel at the Department. “It’s hard to see how adding another person to the process of exercising existing discretion in this area is really going to change the landscape much,” Buell said in August when the compliance counsel was announced.

Arlen asked Weissmann about Buell’s critique.

“Sam was a trial partner of mine,” Weissmann said. “This will not be the last time I have disagreed with him. And it is definitely not the first. I’m not really sure I understand that criticism. Prosecutors think we know everything. I just don’t think it is true that we do. You have to recognize where you need expert help. We have experts in all kinds of fields who help us — whether it’s accounting or forensics, medical issues. Having a compliance expert to me is only an upside. The only downside I can see is for companies who are trying to pass off a compliance program that is not the real thing and hoping that we think it is. For companies that get it, that’s going to be a big benefit to them and to the Department of Justice.”

Chen said she would ask — “how real is the compliance program to the little guys in the field?”

“If you were to go talk to your field operatives in Mexico City, Chungdo, are they going to understand anything you are talking about?” she asked. “Do they get it at all? They are your frontline gatekeepers. They are the ones who will help you operationalize a program.”

“Compliance work is a constant struggle. There is not likely to be a day when there are zero conduct issues. But an indicator of a real program is that effort — that effort of trying to figure out how to make it better, how to make it more real, and how to make it more real to the little guys in the room.”

Chen said she would focus on four questions:

How thoughtful was the design of the compliance program?

How operational is the program?

How well do your stakeholders communicate?

Is the compliance program well resourced?

Arlen asked Chen about corporate whistleblower programs.

Chen said she would ask a number of questions.

“Does your firm have a culture where people feel secure to be raising complaints? How often do you get whistleblower complaints within the company? If, in the history of your compliance program, you have never gotten one, then perhaps it’s time to look at why you haven’t gotten one,” Chen said.

“Going back to the little guys in the field — can the guys and women in Pakistan, Argentina, China, India not only feel free to raise an issue, but have the language capacity to do so? When they need to raise an issue to the parent company in the United States, do they have to call an international number and speak in English? That would be a pretty strong deterrent to people in the field who would want to raise the issue.”

“The frontline gatekeepers are low level employees. And they often do not possess the language capacity or even the sophistication of knowing how to make an international call. How well have you publicized your whistleblower program?”

“Once the complaint is received, how is it handled? Do you have a healthy process for handling these type of complaints? Do they always get a response?  Can they remain anonymous? These are tangible measures to demonstrate to the whistleblower that the company takes your complaint seriously.”

“I understand from handling many whistleblower complaints that it can be very frustrating. I have seen whistleblower complaints that come in fifteen pages and you have no idea what they are saying. And somewhere on page seven, it says — my manager makes me do the wrong thing. And now you are left to try and figure out — what does he or she mean by this? One of the hallmarks of a strong whistleblower program is that you do take them seriously and you make a reasonable effort to address and inquire into these complaints.”


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