Category Archives: Lawyers

Catching up, again, part 4

Hopefully, building on the last three posts9https://infogovnuggets.com/2019/01/04/catching-up-again/ , https://infogovnuggets.com/2019/01/04/catching-up-again-part-2/, and https://infogovnuggets.com/2019/01/04/catching-up-part-3/, this will close out 2018.

  1. Fake news

    “Journalist at Center of False-Reporting Scandal Faces New Allegations Over Donation Requests,” The Wall Street Journal, December 24, 2018.  The first paragraph says it all: “German magazine Der Spiegel said it would file a criminal complaint against a former star writer who admitted falsifying reports, after discovering that he also appeared to have set up a fake charity operation for Syrian children.”  One can only assume the paper had a policy about not making up stories, or not fleecing the readership.

  2.  Morally but not legally guilty.

    “JD.com Founder Faces Backlash at Home: ‘Behind the Law is Morality,’” The Wall Street Journal, December 24, 2018.  Even though released and after the closure of a three-month investigation into a rape allegation, the founder of a large ecommerce business in China is still getting hammered in the Chinese press (and, one might imagine, at home).  Is that Governance, or Compliance?  How does Compliance deal with an accusation that is not sustained?

  3. Libor was information, too

    “UBS to Pay $68 Million to Settle State Libor-Manipulation Claims,” The Wall Street Journal, December 24, 2018.  Goes back to the 2008 charges of mucking about the the benchmark London Interbank Offered Rate, used a lot in loans and such.  Two aspects here, first dealing with the use of a number derived from supposedly unbiased people to govern “your” deal, and, second, the cost of non-compliance, even if long-delayed.

  4. Which was it?

    “Maintenance Lapse Identified as Initial Problem Leading to Lion Air Crash,” The Wall Street Journal, December 26, 2018.  Maybe it was not improper or inadequate training; maybe it was improper maintenance.  Investigation into crash of Lion Air continues.  Highlights the difficulty of establishing the facts after the fact.  So much information.

  5. Why do you track the numbers if you don’t use them?

    “Psychiatric Hospitals With Safety Violations Still Get Accreditation,” The Wall Street Journal, December 27, 2018. What exactly does “accreditation” mean, if you can have a bunch of serious violations?  The failure rate is about 1%, and nearly all the inspections are by one company.  This is primarily an Information point, on the failure to make use of the available information, or the failure to make it available. And does the government exercise appropriate oversight/governance given the amount of federal funds involved?

  6. Resume errors

    “Acting Attorney General Matthew Whitaker Incorrectly Claims Academic All-American Honors,” The Wall Street Journal, December 27, 2018.  The Acting AG apparently made this error consistently on his resume for years; he wasn’t an Academic All American; instead he was a District VII All District selection.  If he were genuinely confused about what he was awarded, this makes some sense.  But one would have thought that somewhere along the way this would have been discovered.  Is that Information or Governance?  If it were an employee at your company, what would be the sanction?

  7. Information vacuum

    “Commerce Department Won’t Publish Data During Shutdown,” The Wall Street Journal, December 27, 2018.  One wonders what the consequences will be of the absence of this data.  The article says, “Investors often depend on these reports to make trades, which affect stock values, bond yields and the value of the dollar. Businesses use them to make investment planning decisions. Federal Reserve officials depend on them to make interest-rate decisions that ripple through the economy.”  If you rely on a third party for key information, what do you do when you can’t get it?  What’s Plan B?

  8. Who owns the artwork?

    “‘Absolute Control’: Cuba Steps Up Artistic Censorship,” The Wall Street Journal, December 27, 2018.  Cuba severely restricts an artist’s ability to make money from his or her art.  Sure, this is Governance, but is art also Information?

  9. How does your doctor make referrals?  I want to know.

    “The Hidden System That Explains How Your Doctor Makes Referrals,” The Wall Street Journal, December 28, 2018.  Apparently, there are processes in place that might influence your doctor’s judgment.  Would you want to know that?  Is there an ethical issue (Governance/Compliance) that surround this information and how it is used?  Is this conflict disclosed to you?  Adequately?  Do the insurers (who have money in the game) push back on this enough?

  10. Statements on Twitter aren’t facts?

    “Elon Musk Says Pedophile Accusation Against British Man Was Protected Speech,” The Wall Street Journal, December 28, 2018.  Calling a cave diver rescuing boys in Thailand a pedophile is at the heart of the suit against Elon Musk.  Does Twitter have no rules with which one must comply, and no one to enforce those (non-)rules?  Or do we have systems of Compliance and Governance that punish libelous statements, broadly published, regardless of the media/medium?

  11. Ouch

    Wells Fargo to Pay States About $575 Million to Settle Customer Harm Claims,” The Wall Street Journal, December 29, 2018.  More fallout from the account cramming and related scandals.  Total payments so far: ~$4 billion.  Cost of compliance, or cost of poor governance.

 

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Tracking

Apparently, law firms don’t do background checks on incoming partners, at least not if they’re big money makers.

“Top Lawyers Evade Harassment Claims,” The Wall Street Journal, July 31, 2018 A1.  Partner switches to a new firm that didn’t know of his history of harassment.

See also a posting last month on a related topic: https://infogovnuggets.com/2018/07/23/sexting/

Do law firms think they are somehow immune from the laws that apply to their clients?  Do they read the news?  Do they have a fundamentally different culture?

Just asking.  But this does go to both Compliance and Governance.

 

 

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Tapes and onions

Today, with surveillance cameras everywhere, it’s good to remember that everything you say may be recorded.  Even by someone you trust.  And those recordings turn up.

“Cohen Recorded Talk With Trump,” The Wall Street Journal, July 21, 2018 A1.  Trump’s then-personal lawyer recorded a conversation with then-private-citizen Trump about a story about a Playboy model.

Several different layers of onion involving this tape its creation, its collection by the FBI under a warrant, its production after a court-ordered review, its release to the press, and its impact.  And who owns it, at each stage of the process?  Did Trump know he was being taped?  Was this privileged?  Was the privilege waived?  How and by whom?

I just ask the questions.

 

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Conflicts as information

“McKinsey Held Back Chapter 11 Positions,” The Wall Street Journal, June 20, 2018 B1. Consultant advises in bankruptcy proceedings while holding undisclosed interests in the outcomes.

Did McKinsey not know that they had these investments?  Did they not have a process for checking for conflicts?  Or did they not care?  Did the lawyers not ask when employing an agent?  Was there no policy, at McKinsey or the court or the attorneys, about conflicts?

Maybe they need an outside consultant to review their processes.  Lots of really cool slides.

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Poster boy for Information Governance

Years ago, while teaching a course to MBA students at Rice University, I used the Target credit card breach as a case study.  It touched a lot of bases.  Now we have a better one.

While there have been a lot of information governance-related stories in the news over the past two years, including Equifax and Facebook and VW and Wells Fargo, my nominee for the one name associated with the most significant teaching example in information governance and compliance is the former FBI Director, James Comey.

First, he gave us The Day That Information Governance Died, with his July 5, 2016 pronouncement that, notwithstanding her clear violations of several applicable legal laws dealing with the handling of confidential or secret information (and the destruction of information subject to a subpoena), Secretary Hillary Clinton’s use (and wiping) of a private server to store government email was not going to be prosecuted.  Such a pronouncement deviated “‘from well-established Department policies'” that the FBI does not comment about  ongoing criminal investigations.

Then he wrote a memo ostensibly commemorating a meeting he had with his boss on government business on a government computer (while in a government vehicle) during the work day, and declared that that was his personal correspondence that he could (and did) distribute as he pleased.

And now we learn that he conducted government business over his own private gmail account {that information does not appear in the WSJ article – Ed.}, and actively avoid his boss’ oversight (and his bosses failed to adequately supervise him).  “Report Blasts FBI Agents, Comey Over Clinton Probe,” The Wall Street Journal, June 15, 2018 A1. Inspector General releases his report on the Clinton Investigation.

Recap:

  • Violations of law are not enforced
  • Evidence is destroyed notwithstanding a subpoena
  • Senior employees ignore long-standing policy
  • Senior employees treat documents prepared by them in the course of business as their personal information
  • Senior employees use private email accounts to transact government business
  • Employees hide things from their bosses
  • Bosses failed to adequately supervise their reports

And this is at the FBI, by a lawyer.

Does anyone wonder why we have a hard time getting traction on information governance initiatives?  Certainly an argument for an Information Governance case study of just the Clinton email investigation and its aftermath.  Not sure you could cover it all in one semester, at both law schools and business schools.

 

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What does a lawyer do if the client ignores his advice?

The CEO arranged to hire one of his buddies for a senior job with the company.  Someone ( employees? a shareholder?) sent a letter to a member of the Board complaining about the hiring.  The CEO asked Security to find out who wrote the letter, despite being told by Compliance and the General Counsel not to.  He persisted.

“Barclays CEO Hit With Penalties of $1.5 Million,” The Wall Street Journal, May 12, 2018 B1.  UK regulators fined him nearly $870,000 for a ”serious error of judgment.'”

What does it say about a company when the CEO doesn’t listen to the company’s General Counsel or Compliance department?  Is this a governance problem, a compliance problem, or an HR problem?  Costs the shareholders about the same.  And did either the General Counsel or Compliance advise the Board that the C?  What happened to them?

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Reliance

“U.S. Prosecutors to Weigh Criminal Case for McCabe,” The Wall Street Journal, April 20, 2018 A1. The DOJ Inspector General referred the case/matter of former FBI Deputy Director for criminal prosecution over his responses to investigators looking into leaks.

What does it say about the culture of an organization when two of its top officers, both of whom are lawyers, may have lied to federal investigators?  And what if that organization’s mission is the investigation of crimes?

How much do we rely on institutions and professionals to provide governance and to stand as examples of compliance?  Is that reliance justified?

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