February 28, 2011

UK Anti-Corruption Chief Advises Corporations & Law Firms

Behind Closed Doors

By RUSSELL MOKHIBER

He has visited many private law firms.

In both in the UK and the USA.

He has given private briefings.

And advised corporate clients of what would be acceptable under the new UK Bribery Act.

And what would not.

No, he's not a paid corporate consultant.

He's not a private defense attorney who specializes in corruption.

He's the chief anti-corruption law enforcement officer in the UK.

He's Richard Alderman – the director of the UK's Serious Fraud Office.

You would never see a US federal prosecutor visit a private law firm to give private advice – behind closed doors – to the firm's corporate defense lawyers and their clients.

But the chief law anti-corruption law enforcement official of the UK says – no problem.

Over the past couple of years, Alderman has been visiting American law firms regularly.

Briefing the lawyers.

Answering questions from corporate clients.

All behind closed doors.

All in secret.

To the very same corporations that Alderman will prosecute if they engage in corruption overseas.

How do we know that Alderman has been meeting privately with these law firms?

One of them – Gibson Dunn & Crutcher – boasted last month about its meeting.

Alderman met with Gibson Dunn and a "small groups of clients" at the firm's Washington, D.C. office on December 6, 2010. And it wasn't the first meeting.

Gibson Dunn put out a release boasting that "Alderman Visits Again with Gibson Dunn."

In an interview last month, Gibson Dunn's Joseph Warin said that "our regulators are reluctant to do" what Alderman is doing.

Reluctant may be putting it mildly.

Has it ever happened?

Has a white collar criminal defense law enforcement official in the USA ever met privately with private law firms and corporate clients to lay out his or her enforcement theories and insights – behind closed doors?

Has it ever happened?

If it has happened, we'd like to know about it.

We asked the Justice Department what's the propriety of this.

A Justice Department official would only tell us this:

"Department representatives often discuss Foreign Corrupt Practices Act enforcement in general at various conferences, and through speeches and Congressional testimony. In addition, the department's opinion procedure allows counsel to pose specific questions, to which the government responds with publicly available guidance."

That would "publicly available guidance."

And Alderman has met not just with just Gibson Dunn behind closed doors.

He's met with many law firms – behind closed doors.

How do we know?

Alderman told us so.

In an interview with Alderman last week, we asked – How many of those one on one private meetings have you done with US law firms – similar to the ones you had with Gibson Dunn?

"I can't give you an exact figure," Alderman told Corporate Crime Reporter. "There have been lots of them. They are face to face."

Is it primarily in the UK?

"Primarily in the UK," Alderman says. "But also in the United States."

Could you give us some names of US firms you have met with privately?

"If they have not published their own reports on that and it is not in the public domain, then I don't think I want to get drawn into who they are," he says.

"I am invited by these firms to come along to talk about the Bribery Act."

"I will do that."

"Any publicity is then for them. The question of publicity is very much for the law firms."

When you come over to discuss with the law firms, the Serious Fraud Office's pays for the trips?

"Yes," he says flatly.

"How many times have you been to the States?"

"I have been to the United States three or four times in the last 18 months or so. And I have had meetings with my law enforcement colleagues at the Department of Justice and elsewhere," Alderman says.

"On these trips, I usually have about two days in Washington or New York. And I have been in meetings with my law enforcement colleagues – and also made presentations at professional law firms."

"Sometimes the meetings are over here – American firms invite me to talk with their clients in London. But when I go over to the States, it's a combination of meetings with law enforcement colleagues and meetings with these firms and their clients."

The anti-corruption scene in the UK is changing rapidly.

Under pressure from multinational corporations, implementation of the new UK Bribery Act has been postponed yet again.

Alderman's Serious Fraud Office is scheduled to be folded into a new Economic Crime Agency.

And Alderman himself says he will retire soon from government service – next year in fact.

He says it is highly unlikely that he will stop working.

Will he consider testing out the revolving door – going to work for one of the many US law firms he has briefed over the past two years?

"I have no idea," he says. "Who knows?"

Alderman says he's an equal opportunity debriefer.

He says he also meets with UK anti-corruption public interest groups – like Corner House.

"I do meet with them," Alderman says. "And I ask their advice on occasion about corruption issues in particular countries. I ask for advice for what is going on in different countries. And I ask them for advice on what works in tackling corruption. So, we have a good engagement on these issues. And I very much value the advice they give me."

Corporate crime practice in the UK is like it was here ten years ago or so – before the rise of deferred and non prosecution agreements.

Alderman has to prepare for trial – and either get a guilty plea or go before a judge and jury.

But he likes the idea of introducing deferred prosecution into UK practice.

"I'm very interested in deferred prosecution agreements," Alderman says. "My American friends in the Department of Justice tell me that it is one of their most powerful weapons. It enables a case to be dealt with quickly. And it enables the corporation to pay the penalty, change its ways and improve, and to move on into the future. So, it gives corporate certainty at an early stage."

"Our criminal justice system takes many years to get to a resolution. That means that the uncertainty is hanging over the head of the corporation for a very long period of time with all of the impact that can have on employees, families and everybody else."

"Our system can be very lengthy."

"I'm very interested in deferred prosecutions. I would like to see them in this jurisdiction, if it can be done in a way that commands public confidence."

"I'm particularly interested in insuring that if we have deferred prosecutions in this jurisdiction that a judge is involved."

"We would have to take it to a judge where there is a proper hearing that would enable the judge to say yes or no. Without that full involvement of the judge, that transparency, the public will not have confidence in the outcome."

Is there anything in the law in the UK that prohibits it now?

"I don't think it is something I can do," he says. "And it is certainly not possible for me to take a deferred prosecution to a judge under our current law."

Russell Mokhiber edits the Corporate Crime Reporter.