[inaudible conversations] good afternoon. It is my distinct pleasure and honor to be the vice chair of the association i get the privilege to introduce a very distinguished panel would degrade pleasure it was to have the attorney general here to share with us his thoughts of the importance of the work we do every day so now we get some of the even deeper thoughts. The role of the Deputy Attorney general is the second highest position in the department of justice clavier delighted the former Deputy Attorney general said here this afternoon to discuss their view of the planet with the importance of high quality ethics and Compliance Program. Currently a partner one of the longest serving Deputy Attorney general and generals under clinton 1994 through 97 arriving at justice from the department of defense for she was general counsel she helped to have the consolidation of the Defense Industry in 1990 and was given the distinguished medal for her service. With the wide array of matters and that enforcement environmental regulation securities enforcement and national security. Reichardt member of the defense policy board from the u. S. Department of defense and also a member of the cia nationalsecurity vice repayable from the Advisory Committee to the president ial commission on Critical Infrastructure that she cochaired among others. [applause] i am pleased to introduce the president of gross city college of 2500 students located western pennsylvania serving as a Deputy Attorney general under president w. Bush 2005 through 2007 spending three decades in washington d. C. And also served from 2001 through 2005 as u. S. Attorney and was of peter the nations response to our terrorist attacks from september 11. He also worked for more than 10 years as a senior attorney in the u. S. Congress included the chief counsel for the House Majority leader and the subcommittee on crime and the House Ethics Committee meeting the Global Corporate compliance for Baker Mckenzie one of the Worlds Largest law firms receiving numerous recognitions Corporate Governance including the 100 most influential people were honored to have him indicted served on the board with him with the board of directors. [applause] also on the panel today partner at wilmer hailed david ogden assistant Deputy Attorneygeneral under president obama and with more than 30 Years Experience often focusing his practice with serious financial implications serving as assistant attorney general for the Civil Division 1999 through 2001 mr. Ogden is currently chair of the Litigation Group for is areas of practice was civil litigation and government enforcement action and antitrust Administrative Law and other mitigation to restrain the enforcement and with appellate litigation and is consistently higher the rate. [applause] and the final panelist you have already met mr. Thompson is chair for the Ethics Research center border directors we sit together on that board 2001 through 2003. Thanks for serving on our panel. [applause] now i will turn the panel over to the facilitator of this session and also a participant. Take it away. Going through those introductions to hear your thoughts we will be time for questions and comments of like to get reaction to a very interesting case zero lot of ideas and issues emerged from that i should mention before we begin how many attorneys general . I got up and to the number eight so starting with that from the last of ministration there is a lot of ground with the department change of policy that can emerge with the changes that have occurred. But we will start with j. B. What is your initial reaction . First each was carefully vetted which you have to love a couple of notes things that he said that were frightening that we have to make the judgment of an honest mistake how important it is for the companys it was very interesting. But where they may have departed is not huge where he talks about the potential to play on the uneven playing field. Clearly it is not a concept but is quite familiar. That shareholders should not pay the price and date that is a different sentiment not that other prior deter any deputy general some of of that but sometimes it is aware that difference is understood. Those are the things that were highlights from of various different factors and they seemed with his guidance of the values so he is showing where he may be different and i very much like that. I agree with that and i thought the backandforth was very interesting when the attorney general came from his experience and then something goes wrong. And then to adopt of policies to have that concrete paucity and to adopt these policies. And where good things happen to Bad Companies you could have a violation and you may do everything right and to have a violation and as the good prosecutors make those mature judgments. And don that defense side to feel very much like the engagement with the government is a bargaining contract. Up against protecting american citizens and we have the corporate scandals in 2002 and 2001 in which again put the department of justice in the role of dealing with the potential collapse of our economy. So if you do have things that come up i think the priorities will take a backseat if you will but lets hope that he will not have to do the things we did at the beginning of art administration. I will say one thing though he had a great knock concession agreement with pat that the general agree to and that is the department is in place and he recognize that many of the prosecutors and lawyers that we all deal with have a sense of fairness and justice. There are some that are unique and different like in any organization but i think its very important and pat would you got some agree with is that this community who are experts in what constitutes effective ethics and Compliance Programs and how it can be implemented and what kind of credit should be given to incense companies to engage in these programs that we continue to have that dialogue and this community continue to have a dialogue in the Department Paid i think people should take advantage of that. Its a nice opportunity. I would like to add one thing to the priorities. I think im going to disco with you right now. This light is broken if i got migraines it would be really bad c it adds a new element to the discussion. [laughter] somebody may be trying to communicate, not subtle. Reporting of any place in our federal government. Its a crazy span of control. You can make a difference. When that yates memo came out and said to the prosecutors community including people in civil enforcement, you will look at individuals. People looked at individuals. Youve seen it. Weve seen it. When people have had changes in administration and one says we want to go after gun violence and one says we want to go after drug violence, it happened. You can have an effect when you try to change priorities but the bread and butter cases are going to be there no matter what and i have to say, i knew Jeff Sessions someone he was senator sessions and i didnt quite know what kind of attorney general he would be. And of us really do although, we had insight this afternoon. I did. [laughter] i didnt. Let me put it that way. Most of the people in this room did it. We got a good and favorable indication in his selection. He pick somebody who grew up in the department. He knows how cases are decided and should be decided. I think thats a good sign and i think if he or they come up with priorities, they will have an effect on the thousands of cases that are investigated daily, weekly, annually. Bringing it back to the compliance focus here, i do think, you he recognizes the strength of the departments prosecutors but i also think he recognizes the value of setting the tone at the top. If you create those set of incentives for those find people to follow then youll have an effect. I think the department itself has been in the process of looking hard at the issue of compliance and developing, making a real concerted effort to understand how compliance works from the private side. We seen that they developed both an interest and a growing competency to understand that side of things. To me, if you put that together with what i think may be. [inaudible] but creating thing thinking about these things and creating untrained corporate compliance. Itll be a hallmark of the admin section. The truth will be in whether we see what i would call the oneway ratchet. Untreated of penalties. Everybody has been trying for years to ring the corporate valve simply by increasing the hit. Without that much regard for the derivation of the penalty or the proportionality of it, david has written and spoken on this and i think its a perception across the board that that is occurred. Thats deep in the bones right now of the department. So, seeing if that changes will be telling. Id like to get into the. The force and process topic in a little more detail. Last point on this priority question, i think i might be prepared . And this is where im switching from moderator to commentator so just i might be prepared to go further to say priorities can push against an effort to try to have comprehensive enforcement. People do pick up on that as you said. Larry, a memorable moment for me was when right after 911, we had a first us attorneys conference in november of 2001. Two months later. For those of us attorneys who had artie been in position and a number of acting position untrained attorneys, it was held in dc and we came to the Old Executive Office and met with the president. Everybody had expected that speech to be about terrorism but we had been focusing on terrorism for the last two months so much of the speech is about gun violence and to make sure that you emphasize that as a part to remember that . I thought there was significant . I do. We were being told that these are the things that were important and on the president s mind at that moment. I think that as an effect on how you allocate resource, impact on budget, effect on working on capitol hill in tough Economic Times when you cant get a lot of extra appropriation will the these things do kind of play out. It takes Good Management to keep around the balls of the issues while you have a very strong message about certain subjects. That will be really interesting to see how it plays out. I would agree with you. It will be important for this community to stay in touch. He said he would continue at the cpa enforcement. Very important enforcement area for a number of Companies Represented in this room. However, as we all know, some issues with selfdisclosure have really driven some of the ways that the department has enforced that in the past. Its driven itself to disclosure underground. The Criminal Division, i think, should be lauded for its effort to have this selfdisclosure project. I would be very interested to see how that project is played out having been ate at the pa a long time. I was on a council of the companies who had to deal with it every day. This will be a very important area of enforcement and i hope it will be successful. Lets move into the enforcement process. David, on the subject of the yates memo and what it takes to get credit for cooperation, again, ag is saying one of the things along with compliance and taken into consideration. In your experience untrained experience, has it been harder to get cooperation if you dont deliver people up on a civil platter. Its an involving picture. Theres a new found emphasis on individuals and disclosing information about individuals and to focus very early in the process. I think, to some extent, its early days in terms of knowing what the end of the rainbow is on the credit. One of the great difficulties with kind of the way the credit works at the present time is that its so backloaded. You dont know whether youre Compliance Program is really going to count. You dont know whether the degree of cooperation that youre providing is going to be recognized. The process of getting that recognition happens in a negotiated context which i think can make it challenging to really feel clear what the guidelines and goalposts are getting moved. I do think its had a change in the dynamics of the disclosure because. [inaudible] its on the individual as it wasnt for. Those of us here on the stage always look as prosecutors for individuals. I dont think any of us thought that it was fair or just to just let a corporation take the bullet and let individuals off. The public outcry came with some of the Bank Settlements where the banks paid huge amounts of money and no individual was charged. I have an issue, sometimes, with the focus on individuals because we all know theres a legal concept called the bank of new england ferry which a corporation can be held responsible, criminally. Its an accepted legal theory and a corporation can be held legally responsible and criminal even if one of the agents really didnt do everything, responding to your your standpoint to put responsibility on the corporation. From an epic standpoint, i have heard from practitioners the emphasis on corporation in the way the memo has been interpreted to practitioners of throwing people under the bus. I think thats unethical and its not a good Corporate Culture to look to find somebody to throw under the bus just for the expediency of the organization. Ive been concerned about some of the things ive heard with practitioners that theres this kind of emphasis. I have some concerns about that from a Corporate Culture standpoint of getting trusted in the organization. Is hard to do an internal investigation, by the way, if the employees know that your gathering facts not to tell the story about what the company has learned but also to deliver that individual to a department of justice in some kind of package with a bow on top. If theyre smart, they get lawyers themselves pretty quickly and that may not allow them to work for the company but in many countries you cant inspire someone because they dont cooperate with an investigation. Those are some of the realities of good corporate investigation is up against the emphasis on individuals. Any thoughts on the subject . Just to to add to the comments which i agree from all three of you. One is that weve been asked, ive been asked, to provide a basis of prosecuting an individual as an element of cooperation. That is as larry said, to seem right. In this sort of transactional way in which cases are evaluated that does happen and that is worrying. The second is, i think, the department got away from looking at individuals at the beginning. After the yates memo, a lot of cases that have been percolating for years, the prosecutors didnt want to send it up for review by the Deputy AttorneyGenerals Office if they had not evaluated the individuals which they could have done three years ago but had not. It will be interesting to see, assuming the yates memo stays in force, what happens with the new cases, whether that changes the way in which investigations are undertaken from the getgo. I think, my own view has been that the reflective use of deferred prosecution agreement, that are negotiated without skipping the step of whether there is actual liability, is bad for the department. Its hard to know how to remedy that when these cases dont actually go to trial. There is no test. Testing of the evidence when individuals put the government to its proof and some of them have been quite successful. Thats the only real window into that. I think it will be interesting to see what happens with these new cases because the old ones suffer from the distortion that, i i think, has occurred in the last decade or so as weve just gone to a reflective deferred prosecution agreements with big numbers attached to them. Stating whether theres a road in stena memo to replace that yates memo. By the way, you might conclude that democratic 80s were a little smarter than republican 80s because there there was no ogden memo or gorelick i dont but there was a thompson memo and a mcnulty. Lets keep all that my most straight. We were very careful. [laughter] lets talk about. [inaudible] the number of deferred prosecution agreements have gone up steadily right through these very administrations that the four of us have been a part of. If you go back to the reagan and bush 41 and even the Clinton Administration i dont think theres very many bpas that came up. Very rarely. Even in the start of bush 43 administration, we had healthcare and other bpas but it was really at cpa that brought up these preferred prosecution rings. Lets start out with these good thing or bad thing . As they become the standard way of resolving a case. By the way, there are critics, especially on the hill, who believe that a bpa means you let the company off the hook. Jamie, said they were reflective views. I think they were. [inaudible] as the attorney general said, the corporation meets all the elements of entity liability than they should be considered for prosecution. I dont think you should automatically decide not to prosecute a corporation for all kinds of extraneous elements. The fact of the matter is, and ive written about this, new york central case, Supreme Court case, that the corporations can be held responsible criminally whether we like it or not. Thats the law. If congress was to change the law, its had plenty of opportunities to do so and it hasnt. I think the department of justice made it pretty clear that general sessions agrees with this department of justice that they should look at entities and if they meet standards and elements of the crime, they should be considered for prosecution let me just push back on you a little bit, larry. Your general counsel of the Company Based on the Legal Standard that youve been to a few times, you have an employee in brazil has been involved in bribery. Assuming you meet some other legal requirements with regard to jurisdiction in the us, that the company will be liable for the employees. Know, there are all kinds of vectors that the department should look at. All those factors we set out. One, that the attorney general whose name i will will not mention followed by another Deputy Attorney general, but theres a whole host of things that prosecutors should look at with respect to a decision. You should just say because this is an entity, and you have shareholders and police, you shouldnt shouldnt just say we wont prosecute the entity. Thats really not following the law. We really should not. So now youre basing that consequence. Wouldnt you rather have that case be resolved through an agreement that provides for certain conditions being met and ends it that way, rather than having to go make a criminal please under appropriate circumstances. It shouldnt just be used in a promiscuous way is nothing wrong with the tool. The challenge is its a way of resolving a dispute. The question is what are the factors that going into it. The danger is the danger that jamie was alluding to that all of us have mentioned is the corporation to resolve a case in that way compared to the potential going to prosecution is enormous. The burden, it really is on of the justice Justice Department before it forces a corporation into that mold. Needs to decide that it has something going there. I think the danger is its too easy to get one of these bpa and resolve a case for state money and imposing all sort of oversight and the rest of it. Not to mention the reputational consequences when there isnt a discipline. I think it encourages a disrespect for the law. The department of justice is choosing to ignore a Legal Standard and as an individual you dont have that available to you. I think under appropriate circumstances, they might be helpful but under a lot of circumstances, the organization should be subject to indictment and prosecution. Very interesting. Do you agree with this thompson approach . [laughter] hes doing it again. Hes putting out another thompson memo. Same one. [laughter] thats what i mean. [laughter] i grew up in a little Litigation Firm that did whitecollar cases when no one was doing it. Those firms wouldnt touch these cases. I like them because they went to trial. Most cases went to trial and you got, you know, it is the Justice System at work. You had an assertion that somebody did something wrong, you had an opportunity to challenge the assertions and the world we live in now just feels wrong to me because there is never an actual adjudication but the whole adjudication takes place within authority of the Justice Department. Im not entirely sure what the solution is but i dont, im uncomfortable with where we are. Its one of the reasons i spent the second half of my career trying to perfect the art of that adjudication. Making the strongest possible arguments about why this case is not appropriate for that sanction. I understand how weve gotten where we are but i dont love it. What would happen to voluntary disclosure if the pendulum swung a bit more in the direction youre talking, that is, making the government prove its case . And sorting out. I point out the factors are designed to say theres a basis for bringing a case or theres not and its pervasive, the nature of the case, has, has there been good compliance, alternative remedies and so forth. Would selfdisclosure be a more difficult thing if you knew you were disclosing to essentially set up a criminal prosecution rather than on non cross agreement . Thats why i think the program thats in the Criminal Division now on fcp a selfdisclosure is important. I dont know how its working and you may know how its working. On evenly. It has problems. I think the fact that the department now has the wherewithal to look at a problem and see whether its real or just on paper, is a very positive development. Its a new but we dont know what the track record look like but if it continues, we will in the next couple of years right. Coming back to the bpa, its these factors that should drive in the bpa unless you have a violation. The question is when will you invoke it. If you have a company that has shown a high level of commitment compliance to the rule of law, nevertheless, had a violation and its performed in a positive way than i think the recognition of that with something other than the prosecution and conviction makes good sense given the fact that the attorney a general identify. It really does require that on the and to avoid turning that into and negotiated outcome that doesnt have a relationship with the facts spirit. What about monitor ships . What if we moved away from deferred prosecution . We would not. The fact is. [inaudible] i dont like him. [laughter] i think its a default of our system. I understand that every once in a while it might be necessary but it to become reflexive. I may be just nostalgic for days that have gone by and never will return but it had some values. So im nostalgic too, jamie. Just by way of another point. Something ive been practicing law for 43 years and when i started this business, whitecollar criminal defense work, done by a subpoena and nothing else. The subpoena, you worked up the terms. The fact of the matter is corporations really were almost immune. They were a target for systemic pervasive conduct. That has changed over the years and i dont know how we deal with it but im very uncomfortable with a process where we basically say, we wont wont prosecute somebody should be prosecuted under the law and im going to sound like a law professor now but the Supreme Court in 1909, when they decided that the new york ctr. Case they were concerned about the economic power of corporations in our country. Turnofthecentury. They were unwilling to give corporations compliant tech as it related to the wrongdoing. Thats our law. On the issue of compliance, and fact what you said jamie, the recent effort by the Criminal Division particular to providing guidance and evaluate Compliance Programs in a more uniform way, one of the things themes of this guidance is the idea of self policing. Not just prevention but compliance is a way of preventing wrongdoing, training, standards, those are all good things but then you get into discovering wrongdoing, finding wrongdoing, investigating it and reporting it. Theres real emphasis on the policing part. I think everybody in the room appreciates how that a necessary component of an effective Compliance Program but that brings us back to the idea that again, selfdisclosure, investigations that lead to some type of enforcement effort. So, were seen that trend, i think, and left couple of years, especially including this idea of rigorous self policing. Otherwise, is is referred to as a paper program. Thoughts on that . Is it important inside, i i think, about the relationship between corporations and the government, ideally would be, in my view. Ideally what we would be doing with Public Policy and this may go against the romantic good old days but when lawyers were lawyers. Men were men. [laughter] you can say that. Yes, i can. [the idea the ringing about alignment and obeying the law and the government interest in having the law obeyed and it does seem to me the creative Public Policy, including creative and force a policy would be thinking about that and figuring out how to do it. Something closer is a piece of that but quid pro quo is felt. [inaudible] when you are reporting on individuals as a result of that but its not bringing unjust prosecutions but careful and appropriate ones and as a result of that, its not a leverage negotiation with the Corporation Reputation at risk but a balance act. I think its a great idea but its an alignment of the start to make it work appropriately. I agree with that. I think the proof will be in the pain. When i practice law for 43 years, the old guy here. [laughter] i would argue back to the initiation of the Defense Industry initiative which i was a part of. That was a part of a very exclusive agreement among the leaders in the Defense Industry, Defense Department was there Main Customer in the Justice Department. Everyone knew what would happen if each did their job. Right now, we have a similar situation but we dont know what the output is. We dont know what the result is. We need to see that in order to see whether weve gotten to a point, as david said, where it works again. And, of course, more broadly than in the defense arena. I would be happy with that if it really did work. I do think the incentives, as pat described, and included are very important incentives. Any of us who worked within Compliance Programs and with clients who have them know that it really makes a difference. It really does. To be able to persuade people to go that extra mile and to actually make that a program that works and be a good corporate citizen, you have to be able to tell a company and its shareholders ultimately that this is a real understanding that produces real results. Otherwise if all the parts as you know, i did two or three voluntary disclosures with your old form and they were tough. There was trust. It was perceived as being fair. Larry, im sure youre appreciated the comment at lunchtime in the idea that ethics just being Good Business from your perspective from pepsico. Ultimately, thats where we need things to be. We can have all this talk about enforcement incentives and whether or not you good deal but at the end of the day if we can be more effective in making a case that youre a better company, that youre a more profitable company, when you do business the right way that will make this a lot less important. I agree. Over the years to some observations the companies that want to do the right thing and have the best relationships with customers and tend to have the best very good and loyal employees and they tend to make a lot of money. I debated whether to bring this question up before i go to your questions but the attorney generals comment at the very end encourages me. If you think that the four of us get along pretty well answer to that is we do. Those of us who work the department of justice have had the privilege of working with a very large number of very faithful, dedicated, career people who just a on from one administration to the next. We have the same the same set of friends who do this work. We share a real sense of appreciation for them and also the complexities of the department of justice and how, so often, in the news and what the subject of the congressional hearings just doesnt even come close to describing the real story. When the attorney general talked about the value of the rule of law in the way that it is something that distinguishes us as a nation, such as a part, how each generation has to rededicate itself, i think he said, that really rang true for me. Maybe its now because im off being a College President and i can look at this differently but i find it burdensome in the heart to watch the department under attack from different partisan, political perspectives and i feel the way both ways. Im just as upset if i see one party attacking, versus the the other party attacking if i believe its not really based upon a clear set of facts. I think it hurts the public image and the credibility of the department of justice. Does anybody share my pain on that one . I think you see a greater bipartisanship and the people who have worked in the department of justice and a desire to defend it against the buffeting of politics. You see, really, wit and any other place. All of us have signed letters and advocated for the confirmation of people of the opposite party. We have fought hard to defend a career person who might be under scrutiny unfairly because somebody didnt like a decision they made that is a that they cherish quality for me about the department of justice and there is this camaraderie for a very good reason. If we lose that, we do lose that commitment to the rule of law. That sense of the department as an island of nonpartisan decisionmaking. Obviously, not on issues of how you think about immigration law, what your approach on whatever but in the basic decisionmaking on cases, civil and criminal. If you lost that that this was fair and right and appropriate we would lose more than you can imagine and so, so the deputies, former deputies feel that way about the department and were going to stick up for it for those very reasons. Another on that point. I have nothing to add to that point i dont agree with every word but part of it does come what from paul was saying and imposing that question. Theres an appreciation when you serve as a deputy or in any role in the Justice Department that it is like any other institution composed of people. Those people are part of a tradition but the protection of the institution is also the protection of fostering the people who do and choose to do the right thing. There are real dangers and partisan politically motivated tax who are doing their best. Thats what draws and i suspect for all of us, this protective sense when we see that from any direction coming at people who we to be doing their best. At the same time, we have to hold the department to account. Larry and i coauthored. [inaudible] that said our fbi director was a threat to our democracy. That was not a decision that we took lightly. We both like him very much but we felt that what happened in the runup to the election was a bad, bad for the department, bad for the rule of law. Were not just automatically going to defend the department. Will try, rightly, to hold it to its highest standards. Let me tell one to. Before the. [inaudible] you saw the letter that was supportive of rod rosen signed, why would he be a good Deputy Attorney general . I said, he knows the department and the department implement the law. The way in which we do things because a lot of what we do is the exercise indiscretion and its not written down anywhere. So she said what is that more . Have you been over to the Justice Department . Yes. Where did you go . Place that in the press room. Get out of the press room look at the murals, look at what is embedded in the stone and artwork of the department. It will tell you what its about. If you start reading that, if you looking at what the department has for decades and centuries said it embodies, you will understand that. I i just hope we can keep that set of. [inaudible] a life. Ill tell a story. We were in a meeting in my office in the Deputies Office and it was a contentious meeting and there was a group arguing for one result, another group arguing for a practical result and my deputy, associative attorney general, was dave margolis. We had all worked with dave, a beloved figure. How long had he worked . Back he had his 50 year a year about before he died. After this contentious meeting and he got in my nurse he comes into my office and says larry, remember this is the department of a value, its not a department of practicality. That made my decision. [laughter] i hope weve generated some interest on your part with a question or two. The wait will do this is not a fancy technology because i declined to go that direction. I just thought microphones might be. We have runners in the back. We have some questions submitted ahead and ill read them out . Perfect. As long as i dont have to read it myself. We had some questions submitted. I read them out one at a time. Should all parts of the doj follow the fraud section promoting effective Compliance Programs . What you think of the antitrust divisions . Quick story on that. When i was writing content writing the modest memo. We were considering the factors to chart a business and those factors were modified by the thompson memo and i got my receptionist said that the and i trust provision wanted to see me in the antitrust 880 walked in and said this memo doesnt apply to us. I quickly realized that the and i trust was a world of its own and didnt want to try cases in the same way. Clever this question is, its an interesting one. They dont all all operate the same way. The fact is that a memo those philip factors as we say, Mark Phillips who replaced me. They apply to all prosecutors. Its not just the fraud section. Not just at cpa prosecutors. Its all federal prosecutors, prosecuting all business organizations but those factors do make an exception and, i think, that was still part of marks revision and its found in the attorney manual in the antitrust division. Theres a reason for that. Cartels are hard to break. Just as we were talking about the Defense Industry initiative, if you have a very very clear quid pro quo for coming in first and bringing your cartel, you get a pretty big reward. I think thats worth preserving. I certainly agree. In looking at what the amnesty and in the way in which theyve broken enormous cartels, its been very successful. I dont think it translates so much to other kinds of crime because its inherently a conspiracy. I think thats why it doesnt translate readily. Its a work in progress but i think its important. At the risk of getting down in the weeds, david, david, some of us have dealt with the Civil Division and its enforcement of the law which on one hand might seem very different but when your company and your facing an enforcement action by the department of justice, its still about the high cost associated with that. Some would say that when youre looking at a false claims act or enforcement of false claims act, its a different deal altogether. Any improvements they are that we might think is helpful . [inaudible conversations] i think its important statute. Its an Important Service and its essential, there are huge problems that jamie alluded to. The penalties are on paper, are so astronomically large from a financial point of view in many cases and so random in a way that they that it creates an arbitrary. [inaudible] you can have these enormous penalties imposed, civil monetary on top of the damages which is a strangekind of calculation but its a statute that although its called fraud statute it can be based on recklessness, liability can be based on recklessness and fraud can be implied so theres an enormous implied from the fact that youve violated a material regulations so it all the things that make it phenomenally powerful and somewhat irrational tool ultimately. I think the way its been managed over the years came back to this idea of rational enforcement. That the Division Needs to be a steward and recognize of the excessive potential of that statute has and rein it in. The danger comes when the department starts to measuring it success by how high they rung the bell and how many dollars they bought in and you see that increasingly. The worry, and the reality is that its got a little bit out of control and i think that id love to see the penalties rationalized and id love to see a new approach to enforcement that recognizes its not civil lawyers against plaintiff and it needs to be handled like Law Enforcement with the same kind of prosecutorial judgment that the criminals. Next question. As a former deputys paternal general and divining an informed approach of an Ethics Program how would you characterize its unforeseeable future at doj . Were optimistic, i think, in terms of things that were hearing and the greater communication about compliance, the effort the department has made in the last two years to look at Compliance Programs seriously. I dont think what we said today suggests that there hasnt been real Good Progress with regard to the encouragement compliance. I think its a good thing. The Criminal Division, if you look at what constitutes the compliance and Ethics Programs. I think its very good. Can it be translated into some of the other areas of the department . I dont know. The real question that we said is still remains to be seen is how much Credit Companies will end up getting following all of this guidance and putting stronger programs in place and when it comes to decisionmaking , whether its a form of a resolution or a decision to charge or not charge, whether it be a wing of that effort. And how you can do what jamie did in the Defense Industry industry effort. In recent time there has been an evolving situation where foreign corrupt practices practice self have been driven underground because of the unpredictability of whats going to happen when you make a selfdisclosure in cpa. One a footnote i would drop, in this particular audience is an easy one, is for more consistency across the problem. This is hard to do given the span of control that i described earlier. But you dont do it by reflexively deferring to the United States attorney. They are, in many ways, the masters of their particular domain but they are not islands unto themselves. They are a part of the department that has priorities, rules, processes. [laughter] wearily down to three choices. [laughter] okay. I will buy eight. [laughter] i think that clearly the attorney general has to make it clear of the department of justice lawenforcement matters. And that this uh challenge it could be more vigilant so that his number one. So there are some very big differences to make sure not all of the attention goes there which is why i was pleased to hear them talk about that and it was meaningful. To those address the need the federal. Something about the federal prison population and the resources. There is not a new challenge and to have implications with those policies to shift away so that it doesnt get to that point but but that thought that that has a real potential of the impact of our community. It is part sitting to hear from the rule of law. From attorneygeneral sessions from the federal judge in hawaii and that president obama also looked at the judiciary. Can you comment on the impact from the judiciary and how that relates to the rule of law . It is of litigating operation and to have an act of frustration but day in n and day out your working for a federal judge. But the judges the boss not the attorney general but he is bennett trial lawyer with respect to that comment at the end of the day will appear before a judge to prevail i would use another word. [laughter] with our country and democracy with those comments that you refer to increase is that did in the short run and criticizes in my experience that backfires but that broader point of that challenge and the political environment that we find ourselves with inflammatory statements coming from government officials and i think the Justice Department needs not only to be fair or be perceived as fair to protect the reputation so that raises questions about the balance the have to analysis to this the challenge for the department. Thinks for coming today it has been helpful i have two questions if you will bear with me taking a cue from what has happened in the last few months we have seen record numbers alleging violations for certain members of the images administration with what public corporations were expected to do my second question is does it have a Compliance Team fax. The Justice Department where they are discussed with of Justice Management Division that you cannot do this or that but they do with. With that internal ethics police. Where there are real questions to refer a question to someone whose opinions will be binding but then with the Inspector General to police all of that so to insure that they abide by the rule of law that has been retained to revise them on the ethics of compliance how much attention the public is now giving so know im not in the best position to give it vice and people say really . You can do that . And sas. That is how it has always been applied. Pet allotted people believe that has never been true. If it triggers a conflict. And people look at that to say this is a good way that could be good for the country that it is helpful to keep or separate with the ethical and vice m process as well executivebranch employees starting with the Ethics Committee that they have to be sorted through but at any point if anything crosses the line from a criminal perspective i have complete confidence and the fbi are the career prosecutors are in the position to pursue long doing wrongdoing there is so long history of for accusal to make sure those Decision Makers are deposition mentioned david had a 50 year track record. And hopefully they will make decisions over time and another question . Mave