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How to Keep a Good Deed from Going Bad

How to Keep a Good Deed from Going Bad. David P. Graham Oppenheimer Wolff & Donnelly LLP 45 South Seventh Street Suite 3300, Plaza VII Minneapolis, MN 55402. First Things First: Privilege Determine how the audit should be directed Legal Regulatory affairs Outside law firm

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How to Keep a Good Deed from Going Bad

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  1. How to Keep a Good Deed from Going Bad David P. Graham Oppenheimer Wolff & Donnelly LLP 45 South Seventh Street Suite 3300, Plaza VII Minneapolis, MN 55402

  2. First Things First: Privilege • Determine how the audit should be directed • Legal • Regulatory affairs • Outside law firm • Outside consultant hired by law firm • Limit knowledge • Relevant and key personnel • Inside the company

  3. Determine if you need a written report • What did the audit find? • No material issues? • Far worse issues that require a different procedure and/or more investigation • Prepare the Report Under Cloak of Privilege • Prepared by or at the direction of counsel • Label the report appropriately • Do not widely disseminate until a plan of action implemented, if any needed

  4. Self-Disclosure • What is the threshold? • If reasonable, responsible government officials could deem the conduct unlawful • OIG statement: “Whether as a result of voluntary self-assessment or in response to external forces, companies must be prepared to investigate such instances, assess the potential losses suffered by the Federal [Government] and make full disclosure to the appropriate authorities.”

  5. Assuming something needs to be reported – get assistance to decide • Narrowly define what needs disclosure • Consider consequences in terms of government’s reaction, future intervention and monitoring • Risks • May give rise to Federal legal action • Employee questions corrective action taken • Onerous compliance monitoring • Reporting to shareholders/securities laws • Exclusion or debarment from government programs

  6. Possible Benefits • Can minimize criminal and civil liability • Reduce monetary penalties • Reduce the possibility of exclusion or debarment • Cut-off whistleblower suits

  7. Avoid Creating Whistleblowers • Address troubled employees discovered in the audit process • Listen to their concerns • Document solutions to issues identified and addressed • Share solutions with those who have raised questions • Do not necessarily share the audit, but explain how it will be used to resolve issues raised

  8. What to Do If the Government Pays a Visit • Have a plan in place in advance • Who will interact with agents • What will employees be told • Who knows where the documents are • Identify counsel that can assist • Identify public relations person/company • Understand the scope of the warrant or investigation

  9. Be cooperative, but protect privilege materials • Protect employees – send them home, if possible • Call outside counsel, unless inside counsel can assist • Inventory what is taken and to whom the government speaks

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