How to Keep a Good Deed from Going Bad

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

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• 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

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• 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 governments
  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

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

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• 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

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• 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

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• 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