In recent years, there has been much criticism of the revolving door — lawyers moving between corporate criminal defense firms and the Justice Department.
But Robert Fiske Jr. sees the revolving door as a good thing.
We should encourage young lawyers to engage in public service — and not slam the door if they do.
Fiske is a former U.S. Attorney in Manhattan and is currently a partner at Davis Polk in New York.
And he is the author of the just released book — Prosecutor Defender Counselor: The Memoirs of Robert B. Fiske, Jr.
“Lawyers in government who have been in private practice do a better job because of their time as private lawyers,” Fiske told Corporate Crime Reporter in an interview last week. “Very often, when they come from private practice, they understand the industry. They know how it works. That gives them a better factual background. It’s a broadening experience. And they can make better judgments as to what kind of action is appropriate because of that experience. That doesn’t mean they won’t go at it hammer and tongs. And they have.”
What about slamming the revolving door?
“I think it would be a terrible thing. You would deprive the government of talented people if you issued some edict that once you go into government you cannot go back to into private practice.”
Fiske has spent more than 40 years at Davis Polk. How has the white collar practice changed over that time?
“When I started, law partnerships were true partnerships,” Fiske said. “The partners were close friends. The partners were Godfathers of the other partners’ children. It was a close knit group. As time evolved and things changed, the practice became much more competitive. And that was in many ways a good thing from a client’s point of view. More new firms came in. It became more competitive. There was more of a fight for clients. And as time progressed, the practice of law became more and more of a business and less and less of a personal professional partnership.”
“That is certainly one change that has occurred. There is an increasing emphasis on the bottom line.”
“When I started in 1955, no major firm was involved in defending criminal cases. That was considered not something firms did. Bob Morgenthau was U.S. Attorney in the 1960s. And some of his assistants went out into private practice — people like Peter Fleming, Bob Morvillo, Charlie Stillman. They started their own boutique law firms doing criminal defense. Because they had been such highly respected prosecutors, that immediately gave white collar criminal defense great credibility. They pioneered that practice. When I came back to Davis Polk in 1980, I decided that we should start a white collar criminal defense practice at Davis Polk. And we did. And we built that practice over the years.”
“Also, there has been a change in the whole concept of prosecuting corporations,” Fiske said. “The collateral consequences that can result from the conviction of a financial institution have become so draconian that these companies can’t afford to defend a criminal prosecution. And in other cases, even if there aren’t those collateral consequences, there has developed a psychology now so that when there is a criminal charge against the company, the best thing a company can do is get it behind them, resolve it and move on. Even if they thought they could fight it and win, they are probably better off financially settling the case. History shows that every time they resolve such a case, the stock goes up. People would rather have it over with than have the uncertainty of have it hanging over them.”
Despite all of the criminal investigations and prosecutions, corporate crime continues apparently unabated. From a public policy perspective, what are we doing wrong?
“When I was U.S. Attorney, we felt very strongly that the best deterrent to corporate crime was to indict individuals,” Fiske said.
“And we did. We indicted a number of individuals when I was U.S. Attorney and convicted them and sent them to jail. I certainly believe that is still true today. And I also think that most prosecutors feel the same way. I think there has been a lot of criticism. People say — why aren’t you getting the big guys? Why aren’t you indicting the top people?”
“I haven’t been on the government’s side of that. But I have no reason to believe that they haven’t been trying as hard as they can to do that. Everyone recognizes that if you indict somebody like Bernie Ebbers at WorldCom and he goes to jail for 20 years, that’s the best deterrent possible to corporate crime. But these are not easy cases to make. There are issues of intent. There are gray areas. And they are hard cases to make. People are trying to do it. I just think it’s harder.”
In his book, Fiske covers many of the highlights of his career, from his time as U.S. Attorney to his stint as independent counsel in the Whitewater matter.
And he represented individuals and corporations products and corporate crime investigations. His book has chapters on EF Hutton and George Ball, Clark Clifford, Three Mile Island, the death of Vincent Foster, the Suzuki Samurai cases, Boston Scientific and The Mets and Bernie Madoff, among many others.
“Commercial needs and medical prudence often are at war with one another when it comes to putting or keeping products or devices on the market,” Fiske writes.
Illustrative of Fiske’s career in private practice is his representation of Richardson Merrell in the thalidomide case.
“Thalidomide was a drug developed by Chemie Grunenthal in the Germany in the 1960s,” Fiske recalls. “It was considered at the time a breakthrough sleeping pill. It was impossible to die from an overdose of it. There was a case where someone took 44 pills trying to commit suicide. And he slept for three days, woke up, had a little bit of a headache and was hungry, but otherwise was fine.”
“It was heralded in Germany as a breakthrough sedative. An American company — Richardson Merrell — got the license to market it in the United States. They applied to the Food and Drug Administration for a new drug approval. A brand new doctor at the FDA who had come from South Dakota — Frances Kelsey — was assigned to it. The story was they gave it to her because they thought the application was so routine. But she looked at it and she had some questions about whether the drug tests were valid, solid statistically. She was taking her time and hadn’t ruled on it when all of of a sudden over in Germany they started seeing babies being born with stumps for arms or legs. There was a big outbreak. A doctor investigated and found that the pregnant mothers had taken this drug thalidomide. And it was clear that the drug had caused it. At that time it was unheard of that any drug could cross the placental barrier. And if a drug was considered safe for the mother, it was considered safe for the fetus. Nobody ever thought this could happen. And it wasn’t part of the routine drug testing at the time to test the drug on pregnant animals.”
“When this first happened, the reaction of the medical community was — this could not have been prevented. This was unforeseen. And there was no fault here. But once the cases got to court, the juries were very sympathetic to the deformed children. And virtually all the cases were settled. You couldn’t defend one. The juries were so sympathetic to the children.”
Frances Kelsey effectively blocked the drug from the U.S. market?
“Yes and in retrospect, she did Richardson Merrell an enormous favor by never approving the application,” Fiske says. “But as part of their pre-marketing clinical testing, they had done clinical testing of the drug in teaching hospitals. That was a prerequisite to the new drug application. The drug had been distributed in the United States on a limited basis. The cases that we were handling were cases that had been brought as a result of that program.”
Fiske was representing Richardson Merrell in the United States and Canada. How many infants in the United States and Canada had been born with these deformities?
“There weren’t that many in the United States. But there were many more in Canada, because the drug had been approved there. And we settled all of those cases. It was a very good working relationship. The Canadian mothers were all being represented by Maurice ‘The Rocket’ Richard, the famous Canadian hockey player. He was an idol of mine as a hockey player.”
Maurice Richard was a lawyer?
“No. He was not a lawyer, but he had been retained by the families. He was their liaison with the Quebec lawyers we were dealing with. We never tried any of the cases. We settled every one of them.”
That’s a case where regulation worked. Did that change your perspective on regulation at all?
“It works well in some cases and sometimes it doesn’t. That was a case where it worked well.”
(For the complete q/a transcript of the Interview with Robert Fiske Jr., see 28 Corporate Crime Reporter 43(10), November 10, 2014, print edition only.)