As the election campaigns mercifully grind to a close before resuming in, say, six months, I reflect on a topic that we’ve heard much about: the “role of government.” All this has made me consider the proper role of government in enforcing criminal laws. You may think the government’s role is complete, with no room for either more or less involvement. It makes the laws, enforces them, prosecutes and adjudicates, and incarcerates, fines or supervises those who are convicted. What room is there for private enterprise in this system?
At least a little more, it appears. I was reminded of this by the recent news that Patrick Fitzgerald, the former U.S. Attorney in Chicago, had, like many former prosecutors, joined a large, prestigious law firm. Hardly surprising, but a comment by Mr. Fitzgerald caught my ear: “I’m not changing who I am, . . . just who my client is.” The news article went on to note that he expected to be conducting internal corporate investigations, perhaps similar to the one former FBI Director and federal prosecutor Louis Freeh did on behalf of Penn State.
Privatizing prosecution, or something close to it, has become the newest edifice in the intersection between corporations and crime. In the last decade or so, large corporations, particularly those funded, paid, or regulated by the federal and state governments (hospitals, universities, banks and publicly traded companies) have created and expanded compliance offices. While it’s possible these institutions are discovering the moral value of abiding by the law, it’s more probable that they’ve discovered the economic value of looking prosecutorial. instead of conspiratorial. The organization that can honestly and perhaps publicly say, “We had a problem, and we’re fixing it,” stands in a far better posture with the government and the public than one that is perceived to be hiding its wrongdoing.
But the distinction between crimes and non-crimes depends much on perspective and is sometimes murky. As a young federal prosecutor I often worked with an FBI agent whose operational motto appeared to be “Where there’s smoke, there must be fire.” The accounting firm of Arthur Andersen learned to its great detriment that what looks like a crime to some may not be. Andersen, Enron’s auditor, was convicted of obstruction of justice, resulting from its destruction of records pursuant to its document retention policy. The U.S. Supreme Court reversed the conviction, but by then the damage was done and Andersen is no more. See Arthur Andersen LLP v United States, 544 U.S. 696 (2005).
A corporation is not a person when it comes to confronting its criminal conduct. A person can’t cut off an offending limb, grow a new one and continue on. A corporation can do something like that. If a corporation’s goal is to control the damage to it resulting from its employees acts it can and will distance itself from the individual. The role of the internal investigator, as Mr. Fitzgerald’s comments suggest, must necessarily align itself with the greater good of the organization, disregarding the defenses and interests of the corporation’s individual members. Individual employees facing such a situation may find that prosecutorial perspective has been privatized and should seek protection in their own counsel.