As a federal prosecutor for ten years, he worked on the prosecution of the Enron case and later on the criminal investigations that grew out of the 2008 financial meltdown.
As such, he’s an ideal candidate to ask — why no criminal prosecution of the big Wall Street banks or their high ranking executives?
Robb Adkins is now a partner at Winston & Strawn in San Francisco, California. He chairs the firm’s white collar criminal defense group.
And he says that the question is a legitimate one and one that he continues to grapple with.
“You ask — where is the Ken Lay prosecution for the current financial crisis?” Adkins said in an interview last week with Corporate Crime Reporter. “Where is the high level executive? The head of a bank? Or a company itself?”
“That’s a very hard question to answer. Prosecutors tell you we look at the facts presented in each case. And if we have the evidence in a singular case, we would bring those cases. We don’t indict industries. We indict individuals and companies for which there is specific admissible evidence to suggest we would have a reasonable likelihood of success in proving guilty.”
“Having said that, your question is a fair one — where are the prosecutions? With respect to the banks, why hasn’t there been either a corporate prosecution, or a prosecution of high level executives?”
“You mentioned Arthur Andersen. I didn’t play a role in whether to charge Andersen. But it was a very controversial decision involving a handful of folks. And it had an impact upon thousands.”
“The Arthur Andersen decision led to several new policy changes at the Department of Justice. There is Thompson/Filip memo on what factors need to be looked at when you prosecute corporate entities.”
“One of the factors in the memo is the economic impact such a prosecution can have. That’s one of the factors that prosecutors are supposed to consider. And that’s an interesting question when it comes to large financial institutions.”
“They used to call them the Big Eight accounting firms. The Andersen prosecution led to a shake up in the accounting industry. I don’t pretend to know how much of the impact was from the prosecution. But that is one of the factors that needs to be considered when it comes to charging banks.”
Do you sense growing public antagonism to the Department of Justice for not bringing criminal prosecutions against the big banks?
“I did notice it when I was a prosecutor,” he says. “And it still continues. I answered a lot of questions from the press and the public. I disagree that there should be two classes of criminals — those who are small enough to be prosecuted and those who are big enough to avoid prosecution.”
“That’s obviously wrong. But I would answer by saying — it’s a question of specifics. It’s obviously not proper to get a scalp of a company because we need to get one from some company. It has to be that that particular company did something sufficient to be prosecuted.”
“There is absolutely a populist view, and a headwind, behind the view that there is a different set of rules for those at the big banks versus those engaged in street crimes.”
“All I can tell you is from my time as a prosecutor, no one ever came to me and said that. We made the decisions made on the facts of each case. Our obligation was to bring those cases that are legitimate.”
“Prosecutors are not only willing but eager to bring those types of prosecutions. That is what they do. They are certainly not afraid to bring those types of cases. In my experience, they weren’t unintelligent or corrupt. At the line level, they are eager to bring those cases.”
“During my decade or so prosecuting cases, I had never had anyone bring influence from on high to say look — facts be damned, we are just not going to bring this case.”
“But I do share the frustration of many of the perceived failures of the Department of Justice. And the way I would answer those questions was — you have to welcome those kinds of questions. It comes with the job. The people are the client. That’s who you work for. You don’t become defensive. You welcome all of those questions. And if you can’t answer them, and sometimes you can’t, that’s fine. And if there is criticism, that’s part of the job. And you need to embrace that because of who your client is.”
Adkins’ practice at Winston & Strawn is focused on compliance, enforcement and international investigations — with a tilt toward Foreign Corrupt Practices Act (FCPA) cases.
Adkins says that his clients in the white collar criminal defense bar are increasingly reluctant to self report to the Justice Department.
He says the question of whether to self-report is the most difficult one faced by clients in FCPA cases.
“Most white collar defense attorneys will tell you that they are very skeptical about the benefit that the company receives when they report,” Adkins said. “And that benefit, which is touted by the Department of Justice, is not quantified or tracked. And it’s very difficult to tell a client that there is some quantifiable benefit in their risk and reward analysis.”
“And remember, the company in the United States is not required to self-disclose. So, I would say the majority of white collar practitioners lean against disclosure. But it does matter on a case by case basis — how pervasive was it, what remedial actions were taken, how long ago was it.”
“These types of decisions are not being made in public,” he says. “It’s very difficult to know what is going on in all of the different boardrooms and offices around the country. Those conversations are taking place. My sense is there is greater skepticism today about self-disclosure because of the track record of many companies self-disclosing and then receiving enormous fines or worse.”
“Why is that the case? It’s the lack of any quantifiable benefit you can convey to your client.”
“Because the FCPA reach has broadened so much over the last seven or eight years, the government is now focusing on areas that are new and different and sometimes involved very minor incidents of alleged bribery or corrupt conduct. That may require companies to come in and do an internal investigation that may be smaller in scope.”
“When you have matters like that, the debate changes from — here is an enormous issue that occurred at the company — to — this is a relatively minor matter that came up and we handled it quickly with remediation.”
“So yes, that is my sense, fewer white collar practitioners are advising their clients to disclose. But as you can see, with more than half the cases or more coming from self-disclosure, it’s obviously still happening at a pretty rapid clip.”
[For the complete q/a transcript of the Interview with Robb Adkins, see 27 Corporate Crime Reporter 14(12), April 8, 2013, print edition only.]