The savings in time, money, intangible corporate resources, and even ‘Machiavellian litigation entanglements’ can be maximized if the corporate counsel takes the time to make the investment and build relationships with US regulatory agencies. in the US are not as remote and unaware of the day-to-day regulatory issues that many corporations are experiencing as one might think.
Current regulatory environment: what is this? By summons!!
This is a critical area for the current complex regulatory scheme. Although the new Administration has promised to drastically reduce these regulatory burdens, it does not really affect the outlook of a corporation and the need to develop a CRP (Corporate Regulatory Philosophy) in approach, management and strategy to maintain satisfactory compliance.
It doesn’t matter if you’re dealing with the USDOJ, the Department of Commerce (DOC) which controls Import and Export (BIS), the FDA (which also includes “stem cell” research and practice), the FTC, the FCC, or any other Agency, you should “know your agency” because each has its own distinct internal procedural policies and different aspects of Compliance and ranges and ranges from the highly conciliatory to what many might see as ‘draconian’ and criminal in nature. .
If you are involved with major Washington, DC agencies, it helps to have a local DC attorney, but my experience has shown that this is simply not enough. The Company’s Corporate Attorney must be sufficiently familiar with not only the inner workings of the particular DC agency, but he must also be able to represent his own corporate interest before these agencies in any Jurisdiction.
To this end it is advisable to be a familiar name and face with these Agencies and my approach is to make frequent visits and meet the personalities behind the Titles, develop relationships and reputations with these people and this is the difference between getting a call phone call from them in advance in lieu of a subpoena.
Why Travel to DC: Because, in practice, these agency hierarchies don’t return phone calls very often and even when they do, it doesn’t result in much progress, but they will entertain a visit to their offices where they feel comfortable and comfortable (although the Corporate Council cannot -at first).
For that reason, I make it a routine part of my practice to visit, hold meetings, and gain first-hand knowledge of people and what their Agency views as their priorities on any given issue at any given time.
Compliance – Depending on the Agency, the regulatory authority will be different and it is essential to know this information. Some agencies rely exclusively on the Department of Justice, which is a huge and politically motivated entity, so having the DOJ’s expertise will certainly yield great results.
DOJ – The DOJ can be painstakingly slow, insensitive, and bureaucratic, but having a relationship with the Assistant Attorneys General can drastically reduce this onerous impediment. They can also be heavily influenced by the application of sanctions and some have argued that this element of the Indigenous Agency is controlling and unfair.
It’s easy to come to this conclusion (like the $8 billion fine that was imposed on a foreign EU bank), but it’s also true that knowing the Agency, the personalities behind the titles and *especially having a relationship and a reputation for sincerity” However, the responsibility of corporate citizenship will be invaluable, as while there are serious civil and criminal availabilities available to the Prosecutor, there is also a wide margin of discretion and power assigned to these individuals and, at the end of the day , I have found them to be caring and fair individuals who live and have the same daily activities that we all do.
It would come as a surprise to most corporations to learn that in the past three years the USDOJ, FDA, and Securities and Exchange Commission told me that I was the first ‘in-house’ attorney to visit their office and that they dealt almost exclusively with with the same local DC attorney.
Internal Compliance – At the other end of the spectrum we have Federal Agencies that have their own internal Regulators and Compliance Advocates. For example:
The Federal Communications Commission or the “FCC” – Since the reclassification of broadband communications (Internet) in 2015, it has fallen into the jurisdiction of this Agency under Title II and Title III, has grown into an authority and jurisdiction huge and this even involves “remote” or “close range devices” like Bluetooth, wireless home appliance control and the like, and there is a plethora of regulatory activity regarding “FCC Terminology” like “unlicensed spectrum” or the drop what is known as “white space” which (amazingly) both Google and Microsoft are trying to achieve.
Also included within this Internal Compliance group is the CPSC or Consumer Product Safety Commission along with the Federal Trade Commission or FTC, which derives from its original jurisdiction from the 1914 Clayton Act on “Unfair Trade Practices.” Now, this Agency is located in Bethesda, Maryland, is comprised of only 500 employees, and has two in-house Enforcement Agencies: the OIG (Office of Inspector General) and the CLU (Criminal Liaison Unit).
Now this is critical to how these internal agencies operate compared to the Department of Justice and can make the difference between a huge fine + penalty and a relatively painless Consent Decree whereby the company agrees to engage in remedial behavior within specific guidelines and I can attest that this Agency can be incredibly wonderful to work with and establish official regulatory relations because believe me when I say “They make the decisions” in their territory.
Department of Energy -DOE – It would be appropriate to discuss these limited agencies without touching the DOE. Within this huge agency is the FERC or Federal Energy Regulatory Commission and this jurisdictional base is huge: coal, wind, solar power, national power grids, geomagnetically induced currents (GIC), GMD or geomagnetic disturbances, power plant maintenance nuclear, hydroelectric. power…”ugh! I could go on forever, but the important thing to note here is that this area of power regulation schemes can be complex to the point of appearing almost algorithmic and it is true that they can be complex and controversial”. (See 1., below) But I can say from experience that this agency has a “very compassionate personality” when it comes to law enforcement. They just want the job done.
They do not have the time or desire to perceive themselves as a “fiscal alternative” agency because, frankly, their responsibility is too important and critical to both our national welfare and national security and they are well aware of this responsibility 2. In the In recent times they have found themselves at the crossroads of Public Welfare, Homeland Security, GEOINT (Satellite Surveillance) and as a cross-functional agency with many others.
Know when to ‘hold your ground’
Strategy When Things “Go South”: All that is said here in this short synopsis are the highlights and points of interest to learn about agencies, their particular compliance policies and procedures, whether internal or external ( DOJ) and perhaps most importantly, building relationships. .
But what does a Corporation do when it has become the “target” of an Agency and diplomacy and remedial action have proven futile and it appears that the Agency is unduly aggressive and seems intent on imposing strict and unreasonable fines and/or Severe or Penalties This is rare but it does happen.
This is when the corporate board needs a “previous” action strategy to deal with these in order to adequately protect the legal and financial interests of the company. One option is to make sure you keep your “home court” and that means filing an action in Federal District Court in YOUR particular jurisdiction and seeking relief, injunctive or declaratory vs. imminent Agency action and it is equally important to note that having a reputation that your company can and will take such action is a strong deterrent against such action.
The Agency knows that if he is forced to appear in the “Ever So Friendly” Court in Washington, DC, his chances are slim. It’s like playing against the house in Las Vegas. Some corporations have argued that the deal is sealed.
But what would you perceive as your chances if you called that agency in a Federal Court in, say, San Antonio or El Paso, Texas? I’ll let you decide that for yourself, but take my word for it that your chances of conciliation are much better in the Independent Republic of Texas in a Dallas Federal Court which is on Pennsylvania Avenue 7 blocks from the White House and the Attorneys for DC Enforcement I know full well that the Texas Federal Courts do not fear the Washington power base and have and will consider their corporate citizens.
Now, let’s not say here that DC courts are unfair and I mean to infer that place is scorned, but the reality is this: there is an undeniable political, practical (less expensive), and local court advantage. and it should be common knowledge that if the corporate entity feels it appropriate for it to really make the most of its home state location, this is a simple and ethically appropriate legal strategy, so use it!
1. For example, there is a provision in Section 215(e)(3) of the Federal Energy Law: which states: FERC may order compliance with a Reliability Standard and impose a penalty if a user, owner, or operator of BPS “has engaged is about to engage in any act or practice that constitutes or will constitute a breach of a reliability standard”
2. Power Grid Disasters: March 1989 Quebec Blackout Damage to Salem (NJ) Generator Step-Up Transformers (1989) October 2003 “Halloween Storm” 1859 “Carrington” Event
