CORPORATE CRIME REPORTER
Profs Seek to Jam the Revolving Door
25 Corporate Crime Reporter 3, January 13, 2011
Two professors of business law want to jam the revolving door between the Department of Justice and the white collar defense bar.
The two professors are Mike Koehler of Butler University and Ethan Burger of the University of Wollongong in Australia.
In a little noticed article published last month in the Academy of Criminal Justice Sciences, Koehler and Burger propose that Congress prohibit “all government enforcement attorneys from appearing – in a representative capacity – before their former employees for a five-year period after government service.”
They also propose that when an enforcement attorney is exclusively tasked with enforcing a niche law – such as the Foreign Corrupt Practices Act (FCPA) – that enforcement attorney be prohibited for a period of five years from providing defense-related legal services related to that law.
Koehler and Burger cite polls showing that nearly 80 percent of Americans do not trust their government.
“A contributing factor in the public's distrust and discontent is the increasing frequency in which government enforcement attorneys enforce the law one day, and then the next day, move into private legal practice to defend clients against the same laws they used to enforce,” they write.
“These recurring instances raise several red flags, highlight potential conflicts of interest, and otherwise create the appearance of impropriety. Yet, these issues are seldom subject to serious legislative debate – perhaps out of fear that similar restrictions with respect to former legislators and political appointees may be enacted.”
“Of course, few would dare call it corruption – but in the eyes of many, both in the U.S. and abroad – it occupies the same spectrum. On this issue, ‘business as usual’ in Washington is indeed unacceptable, reform is in the public interest, and the time for reform is now.”
Koehler and Burger focus their lasers on Mark Mendelsohn.
Mendelsohn is the former Justice Department official in charge of FCPA enforcement.
Last April, Mendelsohn jumped ship to join the white collar defense law firm of Paul Weiss. (See Interview with Mark Mendelsohn, 24 Corporate Crime Reporter 35(10), print edition only.)
Mendelsohn’s “enforcement theories – often untested and aggressive legal theories subject to little or no judicial scrutiny because FCPA enforcement actions are typically resolved through privately negotiated non or deferred prosecution agreements – spawned a multi-million dollar industry to service companies affected by the aggressive enforcement of the law,” the law professors write.
“Now, (Mendelsohn) is building a private legal practice – while making 15-20 times his government salary – advising and defending clients affected by the same law he aggressively enforced.”
Koehler and Burger point out that the Department of Justice “is not the only government enforcement agency subject to criticism when its enforcement attorneys enforce the law one day, and then the next day, move into private legal practice to defend clients against the same laws they used to enforce.”
They point to the frequency in which SEC enforcement officials leave the agency and then, within days or weeks, represent clients in matters before their old employer.
Current Department of Justice conflict rules impose a permanent ban of participating in a matter in which the attorney involved in the enforcement process “participated personally and substantially while a government employee.”
The rules also impose a two-year ban on participating in a matter in which the Department prosecutor “knows or reasonably should know was pending under his or her official responsibility within a period of one-year before the termination of his or her employment.”
The rules also impose a one-year “cooling-off” period on U.S. Attorneys.
Under these rules a senior employee “may not make any communication to or appearance before his or her former agency on any matter in which the former employee seeks official action.”
Koehler and Burger say that these provisions do not go far enough.
For example, the one year “cooling-off” period only applies to “United States Attorneys.”
Koehler and Burger argue that “taxpayers who employ these public servants should not be left to wonder, because of the multi-million dollar salary ‘on the other side,’ whether government enforcement attorneys have an incentive not to alienate or be overly strict with prospective future employers and clients.”
Nor should they be left to wonder whether these enforcement attorneys will enforce the law “in such a way as to create a market for their future services.”
Nor should they be left to wonder whether “former government enforcement attorneys are hired primarily because of the connections they developed while a public servant.”
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