Internal Investigations Blog

News and Opinions on Corporate Inquiries


NFL Union’s Freeman and Jackson Investigations Suffer

According to watchers in the media, the National Football League Players Association is behind schedule in completing two investigations that it is pursuing, one involving free agent quarterback Josh Freeman and the other surrounding Washington Redskins receiver DeSean Jackson.  While the former probe does not lack the appropriate subject matter, the latter probably does.  Both suffer from a lack of effectiveness reminiscent of the Bullygate investigation of the Miami Dolphins by the league.

Last September, the NFLPA launched an inquiry into how and from whom ESPN sourced a report that Freeman – then the Tampa Bay Buccaneers signal-caller – was in Stage 1 of the league’s drug treatment program.  The correspondent who reported the same was Chris Mortensen, a fellow who has been around the league for many years and has cultivated sources deep within the NFL and its teams.

The unauthorized disclosure of Freeman’s medical history would violate a number of federal and state privacy statutes; league and team rules; and, likely, the collective bargaining agreement between the NFL and the players’ bargaining unit.  Everyone from the source of the leak on down to Mortensen would have potential criminal or civil liability for every disclosure and re-disclosure that occurred.  This is serious stuff that is not only worthy – but demanding – of an internal investigation.

The DeSean Jackson matter?  Not so much.

In that case, the NFLPA announced last month that it was investigating “misinformation” that was provided to regarding the wideout’s alleged ties to the Crips street gang in California.  Other media outlets simultaneously reported that it was LAPD who had notified Jackson’s then-team, the Philadelphia Eagles, that he had been connected to the group.  While such information certainly could be embarrassing to Jackson and costly to him in terms of future contract monies, the dissemination of it – right or wrong – likely violates no law or league or team policy.  And it certainly is not the right grist for the internal investigations mill.

Despite the first probe being on solid subject matter ground while the second one isn’t, neither is going anywhere fast or substantive and that is because – like the NFL in the Dolphins’ matter – the union possesses no leverage to compel cooperation.  It obviously realized this early on, when it formally asked the league to conduct a joint investigation into the Freeman matter.  According to a story at

“According to two union sources, the NFLPA wants a joint investigation for two reasons. First, the union has no power to compel Buccaneers officials to talk, and would like – short of interviewing management itself – to be able to sit in on the interviews to see what questions are being asked. Second, the NFLPA conducted research last week into previous cases of confidentiality breaches and found no evidence of the league having sanctioned a club in such a circumstance, or even having vigorously pursued a case.

Specifically, the union wants to look into the role of Tampa Bay coach Greg Schiano in the leaks. Schiano adamantly has denied playing a part in the information becoming public, and a Buccaneers spokesman said Sunday morning that the team won’t address the situation again until, at least, after the team’s home game against the Eagles. 

According to a union source, the NFLPA has information indicating that Schiano shared confidential information about Freeman with some of Freeman’s teammates. [Emphasis added]”

No power to compel Buccaneers officials to talk.  Exactly.  And the same holds true in the Jackson matter, where the union would also have liked some league help.

The NFLPA can surely compel its own members – Freeman’s then-teammates on the Buccaneers and Jackson’s on the Eagles – to talk to its investigators, but only the league and the teams can make the balance of critical witnesses cooperate in joint probes.  In these two instances, the NFL, Buccaneers, and Eagles have seemingly declined the union’s solicitation of group efforts and – like in the Bullygate case – the internal investigations that were promised become more sizzle than steak.

Law Firm Looks Conflicted in GM Probe

It has been said that even a blind squirrel finds a nut every now and then. Adjusting for the times, it has also been said that if you give laptops to a bunch of monkeys, they will eventually write great novels. So there is a chance that those types in Congress and at the Department of Justice will be able to find the glaring conflict of interest in General Motors’ selection of at least one of its outside internal investigations counsels, even if the company and others apparently cannot.

Staring down House and Senate investigations and a DOJ-initiated criminal probe, GM laudably decided to conduct its own inquiry and retained two well-know, large firms to do so. While they both have outstanding people with tremendous skill sets to do such work, the engagement of Jenner & Block and King & Spalding is confounding from a conflict-of-interest perspective. Especially King & Spalding.

On Monday, Corporate Counsel reported that GM’s in-house and outside counsel were slowly being pulled into the ignition switch scandal, after House and Senate hearings revealed that they apparently played a role in delaying a recall while quietly settling crash lawsuits. In one hearing, Senator Claire McCaskill (D-Mo.), said company’s lead switch engineer lied in a deposition, implying that engineering was trying to hide the defect by replacing a faulty part while not assigning a new part number.

Per the same article:

“GM chief executive Mary Barra on Wednesday tried to explain to the Senate how the legal department could know about defects but failed (sic) to share that information – information that could have saved lives. Barra, at GM for 33 years, was an executive in the manufacturing and engineering division before becoming CEO in January.

‘Within GM there were silos, where information was known in one part of the business, for instance in the legal team, but was not communicated to the engineers,’ Barra said.

Calling the engineer a liar, McCaskill said internal GM documents show the engineer had signed off on the change [that he supposedly denied in his testimony]. GM was represented at the deposition by a lawyer from King & Spalding, McCaskill said, and she demanded to know whom that lawyer reported to (sic).

Barra said she didn’t know, and at one point McCaskill invited her to consult with GM general counsel Michael Millikin, who was sitting behind her at the hearing. She didn’t move, but instead offered the information ‘silos’ answer.

McCaskill wasn’t satisfied. ‘I guarantee you if I’m lawyer at a deposition where this bombshell is dropped … I’m on my cellphone in the lobby saying to GM ‘we have a problem,’ McCaskill said. She insisted again on knowing to whom at GM the lawyer reported.

Barra finally responded, “It would have been the senior legal team.” Several other lawmakers also questioned why GM’s general counsel didn’t immediately alert the CEO about the deposition bombshell. One said at some point Congress might want to speak with GM’s lawyers. [Emphasis added.]”

Legal ethics experts consulted by Corporate Counsel fretted about Jenner & Block’s involvement:

“[The] internal investigation itself has come under question because GM didn’t hire an independent investigator. Instead Barra named Milliken, along with outside counsel Anton Valukas of Jenner & Block, to lead the internal probe.

Millikin, like Barra, is a longtime GM employee, and Valukas is Jenner & Block’s chairman. The law firm has a long-standing relationship with GM. Millikin’s predecessor as GC was Robert Osborne, who came from Jenner & Block and returned there in 2009 after guiding GM through its bankruptcy. Osborne remains of counsel with the law firm in Washington, D.C.

Another former GM general counsel in the 1980s, Elmer Johnson, eventually worked for Jenner & Block after leaving the company. He died in 2008.

The other law firm helping with the internal probe is King & Spalding, which also has a close relationship with GM. It helped guide the auto company through its 2009 bankruptcy and subsequent U.S. bailout.

Critics question how Millikin or those law firms can be objective about their investigation.

‘To me, there’s a conflict of interest,’ Monroe Freedman, a legal ethics expert and law professor at Hofstra University School of Law, told Reuters. ‘A reasonable person might question whether [Jenner & Block] wants to curry favor with GM, so it can maintain a good relationship or obtain future work.’

But GM spokesman Selim Bingol told Reuters there is no conflict of interest, and Valukas ‘has been charged to go where the facts take him and give the company an unvarnished report on what happened. He is the ideal person to do that, given his understanding of our business and his reputation for adhering to the highest standards.’

Richard Painter, a professor at the University of Minnesota Law School, told Reuters that if GM wanted to reassure shareholders, it should hire an independent law firm. ‘But they may want to disclose just enough to keep shareholders informed, and keep other things private to keep legal defenses available to them,’ he added.”

Good points to be sure, but – hello, McFly – doesn’t anyone else see the 800 pound gorilla in the room that is King & Spalding? You know, the firm whose investigation now has to include its role in counseling or at least being cognitive of the strategic or tactical decision of GM’s lawyers not to share information with its engineers that might have saved lives?

The Good, the Bad, and the Ugly in the Bridgegate Report

Headline writers and pundits are piling on the Gibson, Dunn & Crutcher report on New Jersey Governor Chris Christie’s possible involvement in the infamous Bridgegate toll lane closures, as well as the alleged non-distribution of Hurricane Sandy relief funds to the City of Hoboken. Both of these acts or omissions were thought to have been laced with political motivations. Dealing only with the Bridgegate portion of the internal investigation for purposes of this post, it has to be said that while there are problems with the inquiry itself and the end product, the gnashing of media teeth over its eventual conclusion is far overdone.

According to Page 35 of the report itself, in the wake of the toll lane closures in question, “the Office of the Governor retained the law firm of Gibson Dunn to facilitate cooperation with the U.S. Attorney’s Office’s investigation and other relevant inquiry, conduct an internal review of the George Washington Bridge lane realignment allegations, and advise the Governor’s Office on best practices and make recommendations for improvements going forward.” From the get-go, then, Gibson Dunn’s work was more than just an outsourced internal affairs investigation. It was that, plus damage control and penalty mitigation.

The governor and Gibson Dunn had to anticipate opponents and casual observers seizing upon the seemingly self-serving nature of the law firm’s retention at the outset. Gibson Dunn’s efforts were headed up by partner Randy Mastro, Co-Chair of its Litigation Practice Group, its Crisis Management Group, and a friend of a friend of Christie’s:

“Before returning to Gibson Dunn in 1998, Mr. Mastro served as Mayor Rudolph Giuliani’s Chief of Staff and then as New York City’s Deputy Mayor for Operations. In that capacity, he was responsible for overseeing all of the City’s operating agencies and budget, and served as the Mayor’s chief liaison with elected officials. In the Mayor’s absence, he was authorized to act on the Mayor’s behalf. During his years in the Giuliani administration from 1994 to 1998, Mr. Mastro spearheaded the City’s initiatives to remove organized crime from the Fulton Fish Market, the private carting industry, and the San Gennaro Festival. He also oversaw the successful turnaround of New York City’s Off-Track Betting Corporation. For two consecutive years, NY1-TV named Mr. Mastro one of City government’s ‘Winners of the Year,’ and Manhattan File magazine featured him as one of the ‘45 Most Powerful New Yorkers 45 and Under’.”

As a result, media members and Christie opponents anticipated a whitewashing of Christie’s involvement in Bridgegate and waited for the Gibson Dunn report to validate those suspicions.

After its release, news and opinion outlets cried foul in ways that proved – like most people and organizational business units – that they do not understand the purpose and authority of internal investigations. As an example of their tenor, The Washington Post’s own PostPartisan blog wrote of:

“ . . . that ridiculous report exonerating Gov. Chris Christie (R-N.J.) from any involvement in or knowledge of the lane closures that are at the heart of ‘Bridgegate’. As Carter Eskew points out today, Christie’s defense is a fallacy.

Key participants in the scandal — David Wildstein, Bridget Anne Kelly and Bill Stepien — were not interviewed for the report. The 360-page document makes ‘adverse inferences’ from their assertion of Fifth Amendment rights. And then there were the nasty and gratuitous mentions of personal business between Kelly and Stepien. And the law firm that conducted the ‘investigation’ that exonerated the governor was handpicked by the governor.”

As has been written and alluded to in this corner many a time, an internal investigation is only as good as the cooperation that it can get. And that cooperation is dependent upon the leverage that an organization can bring to bear on witnesses. Fear of demotion or loss of a job pretty much gets people cooperative and talking. This club is trumped only by the threat of prosecution by the government, which then has the opposite effect of keeps the lips of witnesses zipped to everyone except prosecutors.

In the end, Christie may be knee-deep in the planning or unfolding of Bridgegate. But where the key witnesses and only ones that can finger the governor are independently at risk of prosecution for their actions and have shout their mouths pursuant to the Fifth Amendment, there is only so much that the investigators could have done. Immunity deals or plea bargains from the government might loosen the tongues of Wildstein, Kelly, and Stepien, but until such time, any credible investigation – by friend or foe – would have had to reach the same conclusion as this one did: a lack of evidence of involvement or knowledge by Christie.

This is not to say that the PostPartisan piece is not dead-on in being concerned over Gibson Dunn’s selection by the governor for this internal review task, especially given its ties to Christie ally Giuliani. The engagement of a wholly neutral, disconnected, and independent investigations law firm would have been preferable, to be sure.

Further, while the full text of the report reads like the repetitive and monotonous narrative of facts that internal probes often are, the executive summary – probably the most-read or only-read portion of the larger document – is calculatingly more flamboyant and endearing of the governor. Think Peter Parker versus Spiderman:

“It was an emotional session, in which the Governor, welling up with tears, expressed shock at the revelations, directed Kelly’s immediate firing for lying to him, and also decided to sever ties with Stepien.”

This – along with other, action-packed descriptions of Christie in the throes of this crisis – surely is and was intended to sell the righteousness of the governor and to make ever more plausible the conclusion by Gibson Dunn that he had no knowledge of Bridgegate as it unfolded. That likely was the work of Crisis Management Group Co-Chair Mastro, not internal investigator Mastro.

But this subtle partisanship does not alter what is seemingly the proper conclusion to be drawn at this stage of the game. Unless and until Wildstein, Kelly or Stepien open up and finger Christie, there will remain a lack of evidence to connect him to this scandal. Recall that the criminal justice system does not declare defendants “innocent”, but rather, “not guilty.” While Mastro and his report may be wrong in trying to paint the governor as pure as the driven snow, it is right in finding – at present – a lack of evidence against him, no matter how unpopular or seemingly unbelievable that determination may be.

Exit Interviews As Investigations Fodder

It is not as if organizations go around looking for things to investigate about themselves. After all, investigations cost money – frequently money that is not in the compliance and ethics function’s budget – and nobody wants to spend when they don’t have to do so. Yet a recent article by a well-known expert discusses a frequently-overlooked source of information – the exit interview – about all things compliance. This includes reports of misconduct that would or should mandate internal inquiries.

The expert in question is Donna Boehme and the potential fountain of information that is usually overlooked by the C&E function is the exit interview. In “Ode to the Exit Interview: Early Warning System for Compliance” at The Compliance Strategists Blog, she writes of its tremendous usefulness in gauging C&E successes and failures:

“Companies- and their compliance programs – live and die on their management of information. For the chief compliance officer, the ability to efficiently gather and analyze the right data informs the company’s compliance and culture risk assessment, identification and mitigation of potential problems, efficient use of limited resources, and crisis management responses.”

Here it would be appropriate to interject and say that triaging for internal investigations also ought to be explicitly included.

“Compliance officers have multiple ways of gathering information: via the confidential employee helpline, reports from subject matter experts, risk owners, or other key personnel supporting the compliance program, access to shared data from other control functions such as Audit or Legal, management reports, employee surveys, focus groups, and even from the low tech activity of walking the halls.

But one of the most powerful sources of information is also a commonly underused one: the exit interview. Experienced compliance officers understand the value of “piggybacking” on the HR exit interview for all departing employees, including (especially) the unhappy ones. They do so, at a minimum, by inserting well-constructed open- ended questions into the HR script, and outlining for HR those issues that should be brought quickly to their attention. In many companies, a team effort involving both HR and Compliance is emerging as a best practice approach.

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The exit interview is the point at which a normally silent employee with something to tell, might just tell what they know. And the corollary is also worth noting: legitimate concerns are often raised by vocal, and less-than-ideal, employees. Companies that ignore complaints from “problem employees” do so at their peril.

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[It] is a key “early warning” tool in the mission of compliance: to detect and prevent misconduct. Companies that are serious about compliance should ensure they are fully harnessing the power of the exit interview, a no-cost HR best practice with the potential to save them millions in legal costs, civil and/or criminal penalties and reputational damage.”

In the specific context of internal investigations, this is not to say that the C&E staff ought to be looking for trouble that isn’t there. Investigations ought to be commenced only when they are required, or they are just costly, possibly-morale-crippling exercises in futility. But the opportunity to hear from a primary source on matters that might or might not be indicative of issues that really do need to be examined in more depth and maybe with any eye towards investigation.

Human nature being what it is it is worth bearing in mind that an employee who is leaving an organization of his or her own volition is apt to speak more freely about goings-on in the company than maybe even a hotline caller. C&E people ought to take advantage of the opportunity to ferret out information on a wide variety of topics. Where truly problematic behavior is described, then some basic confirmation and corroboration of the same would and should be a first step. Then – where verified – these reports of bad behavior can be triaged for the appropriate investigations or other response.

What Did GM Know and When Did the Company Know It?

Yesterday’s big story was the revelation that General Motors is the target of probes by Congress and by the National Highway Transportation Safety Administration over its handling of ignition switch defects in at least six of its popular automobiles. Failures in these switches may have resulted in as many as thirteen deaths and seemingly point to quality control failures at the automaker. GM has engaged two law firms to investigate its engineering missteps in dealing with the issue, but these attorneys will likely be more focused on the company’s non-reporting of the problem years ago.

On February 13, 2014, GM recalled 778,000 Chevrolet Cobalts and Pontiac G5s because their ignition switches could easily be bumped or shaken out the “Run” position and into the “Off” or “Accessory” position, causing power brakes, power steer and airbag failure. Although reports attribute thirteen deaths to this issue, GM acknowledges only six as being related to the switch failure. Regardless, the problem remains serious and somewhere along the way, the recall was expanded to include almost 1.4 million vehicles in North America. Models affected are the Chevrolet Cobalt and HHR, Pontiac’s G5 and Solstice, and Saturn’s Sky and Ion.

Sizable as the problem is and as tragic as the resulting deaths may be, they are not entirely unusual in the automotive world. After all, Toyota is in the midst of a 2.1 million vehicle recall of its own right now. And defects subject to recall have caused death and injury along the way. What’s unique is how this problem came to the attention of the people at GM and what was – or wasn’t – rightly communicated in order to further report and address it.

Ironically, it was one of company’s own engineers who accidentally knocked a car out of “Run” in 2004, and from that point forward, the story reads like a car-making comedy of errors.

According to a CNN Money story:

The automaker immediately opened an internal investigation. Various fixes were contemplated but, ultimately, nothing was done.

‘After consideration of the lead time required, cost, and effectiveness of each of these solutions, the [investigation] was closed with no action,’ a GM report to NHTSA says.

But new complaints kept coming in about cars shutting off when the key or steering column was accidentally bumped. So there were more investigations.

In 2005, an engineer proposed that GM redesign the key, an idea that was approved but then dropped.

Instead, GM sent a bulletin to dealers that year asking them to inform customers about the problem. Customers were instructed to remove “unessential items from their key chain,” the carmaker said. The added weight of decorations and other keys increased the chances the key could turn accidentally.

Additionally, GM engineers devised a key ring insert that was supposed to keep attachments on the key ring from moving around and pulling on the key.

The problem wasn’t seen as terribly dangerous at the time, according the timeline GM filed with NHTSA. Even with the engine shut off, GM told the media in 2005, the steering and brakes still worked, although greater effort was needed. And the engine could be restarted after the car was shifted into “Neutral” or “Park.”

But the problems with the switches didn’t go away.

By 2005, there was at least one death when front airbags failed to deploy. GM’s legal department opened a file on the case, but nobody told the automaker’s own safety engineers.

The engineers only found out about the death during a 2007 meeting with regulators at NHTSA.

After that meeting, a GM engineer was assigned to study all Chevrolet Cobalt crashes in which front airbags didn’t deploy, looking for any common element in those crashes. Apparently, nothing was found.

In 2009, GM opened yet another investigation into the ignition problem. That study concluded that GM should redesign the key — the idea that had been accepted and dropped years before.

That change was implemented on 2010 cars, the last model year GM produced the Cobalt.

Meanwhile, airbags still weren’t deploying as they should in front end crashes of earlier models of the Cobalt and G5. As engineers pored over records, they realized that the ignition switch problem was only happening in cars made before 2007.

What most people at GM didn’t know was that Delphi, the company that supplied the switch, had redesigned the part in 2006 to make it harder to turn [and thereby fixing the problem].

The problem had been fixed. A GM engineer even signed off on the changes. Unfortunately, GM didn’t change the part number of the switch. As a result, manufacturing records didn’t indicate that the issue had been resolved.

So other GM engineers kept looking for solutions. The company even hired an outside engineering firm that tore apart and x-rayed ignition switches from different model years. Those experts finally determined that the part on the earlier cars was different.

Finally, in October 2013, GM talked with Delphi, which produced papers showing that the GM engineer had signed off on changes to the ignition switch seven years earlier.

With the answer finally in hand, GM started the process that resulted in this month’s recall of cars made between 2004 and 2007.”

Per another CNN Money article, much of this timeline was put together by a Georgia attorney, Lance Cooper, who represents the family of a woman killed in 2010 while driving a 2005 Cobalt. According to a transcript of the deposition he took of the engineer who knocked his car out of “Run”, the automaker knew of the problem as far back as 2004 and should have reported it to NHTSA within five days of that drive. And if not then, certainly after the 2005 death on which GM’s law department opened a file on the matter.

Now the heat is on and, according to a Forbes report, the company has hired two law firms – Jenner & Block and King & Spalding – to conduct an internal investigation of the entire matter. This as Congress and NHTSA are ramping up their own separate probes and the stakes are high. For failing to report the defect within five days, NHTSA could fine GM as much as $35 million. That would be the most ever for a U.S. automaker and, as an administrative penalty, would not preclude the government from seeking criminal charges.

So while it may be important to dig into the communications shortcomings set out in the timeline above, that will not be the focal point of the investigation. The Jenner and King people will have to make like Howard Baker and ask what the president – or other ranking person with reporting authority to NHTSA – knew and when they knew it. Because the cover-up is usually worse than the underlying wrong and this one could cost GM $35 million and its reputation.

Miami Dolphins Bullygate and the NFL’s Wells Report (Epilogue)

The two previous posts on this topic found some faults with the investigation and resulting report that hopefully did not diminish the reputation of Ted Wells – as if this corner could do so – but did point out handicaps that were foisted on his efforts from the start.  It is as plain as this:  an investigation is only as good as the access and cooperation that it gets.  Here, Wells did not get the most.  So what could have been done different to improve his results?

As can be gleaned Part 1 and Part 2, the problem with the Wells investigation centered on the fact that it was done from outside of the Miami franchise looking in on it.  It did not have to be so, and triaging the matter properly would have solved that problem.

From the beginning, Bullygate matter had been an unanticipated nightmare for the National Football League.  In recent years, the league has assumed the posture of being short on “separateness” and long on tolerance, diversity, and inclusion.  Witness the implementation of the Rooney Rule, the proposed outlawing of the “N” word on the field of play next season, the soon-to-occur drafting of an openly-gay player, and the broadcasting of the Super Bowl around the world in native tongues as examples of this.  The ticket- and merchandise-buying public is no longer made up only of knuckle-dragging white males and the NFL knows it.

When the story of the bullying in the Dolphins locker room broke and was later confirmed, an image and marketing crisis erupted.  It did not look good that a team in the NFL allowed bullying – already a hot topic – of one of its black players by a white player.  And although it turned out that two other black players also harassed the victim and that race was not really that much of a factor in the relationship between these four men, the news and sports media always made certain to tease the ethnicities of those involved.

The bullying and race-card heat felt by the NFL was further exacerbated by the revelation by current and former players that the behavior revealed in the Dolphins locker room was pervasive throughout the league.  Despite the best marketing efforts, it looked as if the NFL and its teams were still composed of homophobic thugs and Neanderthals.

The league no doubt felt that it had to “do something” in order to prove that it was on top of situation and so it acted.  It hired Wells and commissioned him to do an investigation into the internal workings of the Miami franchise.  Surely it would reveal that this was an isolated incident with nothing to see here, and the NFL could close the book on the PR headache that this had become.  Again, the effectiveness of the probe was compromised by its being done from the outside and with little teeth to compel cooperation.

As stated in i-Sight blog interview, the better approach could have been selected at the triaging stage.  While the NFL may have wanted to take the lead on an investigation for public relations and image purposes, it should have gotten together with the Dolphins and the National Football League Players Association – its player’s union – and mapped a joint internal investigation of the bullying allegations at issue.

By bringing the Dolphins into the inquiry, the NFL could have secured better cooperation from witnesses that eventually became fuzzy on details or even openly hostile to questioning, such as the assistant trainer.  As the employer, the team – and not the league – could have taken concrete steps to ensure cooperation by witnesses such as guaranteeing continued employment, protecting them against retaliation, and providing them with anonymity, where required, in return for the full disclosure of the information and evidence sought.  This surely would have helped turn the tide in extracting the truth from hesitant individuals.

So too, would the involvement of the NFLPA.  As the dues-receiving bargaining unit for NFL players, it is clear that the union has fiduciary duties to each player in its membership.  While one might anticipate the union coming down on the side of Incognito, Jerry, and Pouncey in order to protect their rights as accused – always common where the participants are management and labor – these same fiduciary duties would require the league to protect the interests of Martin and any and all player-witnesses equally in this labor on labor conflict.  This, too, would have likely served to increase cooperation by interviewees.

Putting together a better investigation blueprint that enlisted these two other organizations would made for a truly internal investigation and increased its yield of information and evidence to Wells and his team.  Coming at things from the inside and with the protections for witnesses discussed above would have been more effective in getting at the truth and gaining for the NFL the bully-pulpit (no pun intended) it desired.

Thoughts On NFL’S Wells Report On Miami Dolphins Locker Room (Part 2)

Almost two weeks back, Ted Wells’ report to the National Football League on working conditions within the Miami Dolphins’ football organization was released. As previously written, the first hurdle that Wells faced was compelling witness cooperation from the outside looking in. The second one was presented by the inability to do more than speculate about Jonathan Martin’s unique state of mental health and how that impacted – rightly or wrongly – the sequences of events that brought the league to commission Wells’ work in the first place.

For those who have not experienced competitive sports up close, the wrongness of the words and actions of Incognito, Jerry, and Pouncey appear to be as plain as day. In a normal workplace, that would be so. But, here it is not as clear cut precisely because of the uniqueness of the workplace. As a result, it is not easy to figure out where the line should be drawn between permissible and impermissible conduct and how Jonathan Martin’s personality should factor into that equation, if at all.

Remember back to when you were a kid and it was accepted as fact that you would get picked on by your older brother. The harassment was often grueling, relentless, and a test of endurance, but the reward was certain when a bully came around. In the family, dishing it out when you could – and taking it when you had to – were the dues paid in order to belong to this tremendous little group. So it was on the Miami Dolphins.

Athletic fields and locker rooms – both places where many hours were spent in another lifetime – are still located in that world. There, fights remain to the metaphorical death – meaning a career ending injury or being cut – and gallows humor is the coping mechanism that manifests itself in a take-no-prisoners fashion. It is not so different from the family example given above, only more vulgar and less mature.

Of course, in the wake of September 11th and the sacrifices of military service members over the entirety of this nation’s history, it is trite and borders on silly to say that athletes go to war together. Nevertheless, that is how coaches have always seemed to describe it and how athletes themselves often think of what they do. The same hardness that lets them play through injuries and – in contact sports – engage in unbelievable acts of violence that would land them in prison off the field or arena creeps into their team and unit relationships.

Teammates are commonly hardest on their fellow teammates – even in jest – precisely because going to extremes is the norm for them. Nietzsche’s professed “that which does not kill me makes me stronger” theory dominates not only in training and on-field play, but also in locker rooms and off the field. Pranks, jokes, conversation, and everyday language – even those involving things that are normally out of bounds in civil society – are constant and coarse to outside eyes. Yet, to most athletes, they are expected. It is the warrior-class way: tough love from those within the circle that is not tolerated from those outside of it.

Now layer onto this very different world Martin or someone like him.

By his own description, he was from a good family and was generally a quiet and intellectual individual growing up and into his adult life. He was teased by teammates while in college at Stanford, but not as crudely as was his experience with the Miami Dolphins. He admittedly was not one who fought back in confrontational situations and instead chose to conceal his feelings and walk away from perceived conflict. He suffered from a seemingly mild sort of depression which bothered him greatly and he took medication for this condition. Of note, he repeatedly chastised himself for not standing up to others when his feelings were hurt. Plainly put, he was the antithesis of the proto-typical athletic personality described above and that put him on a collision course with many members of any NFL locker room in which he was to land.

The Wells Report concludes that workplace bullying of Martin took place within the Dolphins’ facilities. But that answer should depend upon which men – Incognito, Jerry, and Pouncey or Martin – behaved in a workplace-appropriate manner, given their unique psychologies and professional stations. And that determination seemingly could not or should not be made without Wells gaining access to Martin and his mental health records.

Wells retained a respected psychologist, William H. Berman, Ph.D., as a consultant to his investigation, but the report suggests that the doctor never examined Martin. Surely the doctor would have preferred direct access to his subject before labeling him a victim, particularly where the bona fides of that victimhood were – by Martin’s own account – tied to long standing mental health issues. And it seems that the scientific method would demand as much before making a judgment call as to what or who was right or wrong – or at least appropriate – in the Miami locker room.

Yet, this was not their fault. Wells and Berman could only work with what they had been given. While the Dolphins might be contractually able to gain first-person access to Martin and his medical records if they are still pursuing a parallel investigation of their own, plainly the NFL did not have that ability. In the rush to look as if it had done something, the league put Wells and his people to work with less than the best tools and access and the report reflects the same.

Thoughts on NFL’s Wells Report on Miami Dolphins Locker Room (Part 1)

Last Friday, the National Football League’s report on working conditions within the Miami Dolphins’ football organization was released. Prepared by the noted Theodore V. “Ted” Wells, Jr. of Paul, Weiss, Rifkind, Wharton & Garrison following his investigation on behalf of the league, it is – through no fault of Mr. Wells – underwhelming in some respects. This is primarily due to the somewhat hamstrung position that Wells was put in as an external investigator trying to do an internal investigation.

One of the largest hurdles encountered by a non-government outsider doing what is properly an internal investigation is gaining buy-in and cooperation from probe targets and witnesses. Whereas the DOJ has its prosecutorial power of persuasion and an internal investigator engaged by the employer has the threat of termination and other workplace sanctions to compel cooperation, the outsider has none of that. This case was and is no different.

As is well known by now, some type of action by somebody was compelled by news media reports of the harassment of one Miami Dolphins offensive lineman by another. It soon became common knowledge that the alleged victim was Jonathan Martin and his alleged tormentor was Richie Incognito. The former being black and the later being white only added to the racially-tinged salaciousness hoped for by media outlets that were also crying for someone to do something.

While the NFL surely felt compelled to take some investigatory action, given the fact that its brand and one of its more storied franchises was being pummeled in the press, it – unlike the Miami team itself – was without a cudgel to compel the cooperation of witnesses to conditions within the Dolphins organization. As a result, it commissioned the Wells investigation while giving it insufficient arms for the impending battle with hesitant witnesses on the road to the hoped-for unvarnished truth.

Witness this frustrated effort to confirm facts from the Wells Report:

“Martin claimed that both of his offensive line coaches, Turner and Mosley, overheard some of the raunchy comments about his sister, in the offensive line room or on the practice field. Incognito does not dispute these assertions. According to both Martin and Incognito, Turner neither joined nor criticized the harsh language. Also, both Martin and Incognito said they thought Turner was a good coach.

Turner denied witnessing or overhearing any inappropriate treatment of Martin by his teammates, but Mosley admitted overhearing the crude joking about Martin’s sister; in fact, Mosley specifically recalled a two-week period during which Martin’s teammates constantly made such comments. Martin also asserted that, on occasion, Mosley participated in such insults; Mosley denied this. [Emphasis added.]”

One of the unexpected turns of events during the Wells probe was the discovery of other perpetrators and other victims within the organization that seem to outdo the alleged harassment of Martin. One of these was an assistant trainer and the other a former offensive lineman now with another team and identified only as Player A.

As set forth in the Report:

“The Assistant Trainer was born in Japan and attended university there through 2001, before emigrating to the United States. Martin said that Incognito, Jerry and Pouncey directed racial slurs at the Assistant Trainer, calling him a “Jap,” a ‘Chinaman’ and a ‘chink’; referred to him as a ‘dirty communist’ or a ‘North Korean’; made demands such as ‘give me some water you fucking chink’; spoke to him in a phony, mocking Asian accent, including asking for ‘rubby rubby sucky sucky’; and called his mother a ‘rub and tug masseuse.’ Martin also informed us that Incognito and Jerry taunted the Assistant Trainer by saying that they had had sex with his girlfriend.

On December 7, 2012 (the anniversary of the attack on Pearl Harbor), Incognito, Jerry and Pouncey donned traditional Japanese headbands that featured a rising sun emblem and jokingly threatened to harm the Assistant Trainer physically in retaliation for the Pearl Harbor attack. Martin reported that the Assistant Trainer confided to him that he was upset about the Pearl Harbor prank, finding it derogatory and demeaning.

[Offensive linemen John] Jerry and [Mike] Pouncey each admitted that they repeatedly used racial language toward the Assistant Trainer – including calling him a ‘Jap’ and a ‘Chinaman’ – and acknowledged their Pearl Harbor Day stunt. Incognito likewise did not dispute that he and others directed these kinds of words at the Assistant Trainer but said that this language was all in good humor and that the Assistant Trainer recognized that the words were not meant seriously, even responding with his own jokes.

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We asked the Assistant Trainer about these matters. He said he was not comfortable answering questions on this topic and implied that he could not be candid with us because he was concerned about losing the trust of the players, which he felt would compromise his ability to perform his job.

When pressed, the Assistant Trainer denied that he was bothered by his treatment [.] [Emphasis added.]”

With respect to Player A, the Report states:

“Martin and other witnesses informed us that Player A was repeatedly called a ‘faggot’ and subjected to other homophobic invective. Incognito stated that Player A, although not actually believed to be gay, was subject to these taunts repeatedly and persistently—he got it “every day from everybody, high frequency.” According to Incognito, Player A was a ‘good kid’ and he ‘took it well,’ never asking his teammates to stop.

Incognito and others acknowledged that Player A was routinely touched by Incognito, Jerry and Pouncey in a mockingly suggestive manner, including on his rear end, while being taunted about his supposed homosexuality. Incognito specifically admitted that he would grab Player A and ask for a hug as part of this ‘joke.’

Martin said that on one occasion, Pouncey physically restrained Player A and, in full view of other players, jokingly told Jerry to “come get some p_ _ _y,’ and that Jerry responded by touching Player A’s buttocks in a way that simulated anal penetration. Pouncey and Jerry both denied this allegation.

Given the seriousness of this allegation and the conflicting recollections, we decline to make any findings about this particular alleged incident.

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The evidence shows that Coach Turner overheard and participated in this behavior toward Player A. During the 2012 Christmas season, Coach Turner gave all of the offensive linemen gift bags . . . Player A’s bag included a male [blow-up] doll.

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When interviewed, Turner was asked if he gave Player A a male blow-up doll. He replied, ‘I can’t remember.’  [Emphasis added.]”

While the Wells Report dismisses these denials and faulty memories in light of other evidence that contradicts them, there is no denying that antagonism towards the inquiry – for whatever reason – fails to cement some of the most important facets of the investigation. To a large degree, it is a case of “no victim, no crime.”

It will be interesting to see if the Dolphins – through the promised threat of economic sanctions or, alternatively, economic protection – can compel greater cooperation from members of the organization in the pursuit of its own internal probe than Wells did. If so, that would put any remedial or disciplinary efforts on sounder footing.

Sovereign Wealth Funds and FCPA Enforcement

Big Finance’s dealings with sovereign wealth funds are crying out for internal probes whose primary benefit ought to be getting the finance industry ahead of the government’s own fledgling investigations of the same. Aggressively independent and coordinated internal investigations by several large banks and private-equity firms that have already fielded government document requests seemingly tailored to FCPA concerns might earn potential and invaluable cooperation credits and other benefits down the road.

Back on January 14, 2014, The Wall Street Journal reported that the Securities and Exchange Commission had begun looking into whether some big-name banks and private-equity firms violated bribery laws in their interactions with sovereign wealth funds. As many as ten companies had received the letters of inquiry – which didn’t contain specific allegations of bribery, but requested that they retain documents and asked about their dealings with these overseas assets – according to sources.

As noted in the story, sovereign wealth funds are pools of investment monies owned and administered by foreign governments. A number have invested with both private-equity firms and some of the biggest Wall Street banks in recent years, occasionally helping them to stave off collapse. These have included taking stakes in Citigroup, Merrill Lynch & Co. before its acquisition by Bank of America Corp., and Morgan Stanley.

Attorneys who are familiar with past anti-corruption investigations of other industries told the WSJ that the letters appear to be tied to a broad FCPA investigation of the banking industry. While there could be anti-money laundering and related components to the government inquiries, the anti-bribery angle is a solid bet. Sovereign wealth funds are prime candidates for FCPA concern, given that the hands of foreign governments and foreign officials are all over them and the statute prohibits the payment of cash or non-monetary gifts to either in the pursuit or retention of business.

On February 5, 2014, Compliance Week reported that the Department of Justice had joined the SEC investigation. Allegedly, it is particularly interested in sovereign wealth fund activities in Libya by Credit Suisse Group, JPMorgan Chase, Societe Generale, Blackstone Group, and others.  According to the story:

“The Justice Department and SEC are focusing their investigation on a group of middlemen called “fixers,” operating in the Middle East, London and other countries. Specifically, they’re trying to determine whether these fixers funneled bribery payments to Libyan officials on behalf of financial firms in exchange for business [.]

In some instances, these fixers collected a so-called “finder’s fee,” which could be considered a bribe, depending on the size of the fees and the agent’s relationship with the parties of the transaction [.]”

If CW is accurate about the foci of the DOJ and SEC probes, then the banks and private-equity firms are playing with fire. Realizing that any industry whose vernacular includes the terms “fixers” and “finder’s fee” will bring regulatory enforcers to it like sharks to chum, Big Finance ought to get its hands on some qualified, truly-independent professionals; map an investigation plan that gets the government’s approval; and let the outside investigators have at it.

This may result in the companies taking punishment, but only after garnering invaluable cooperation credits and perhaps staving off a larger, industry-wide probe of banks and private-equity firms similar to that endured by the oil and pharmaceutical sectors in recent times.

Fay Vincent and Rules for Investigations Responses

Sage advice was put out to business executives yesterday. Though it appeared in an article that was not internal investigation-centric, its roster of lessons learned as tips for the next generation of leaders could have been. Regrettably, when it comes to first responses to the crises that lead to internal probes, few companies and executives seem to have learned these same lessons.

The article in question was entitled “Ten Tips for New Executives” and it appeared on the Op-Ed pages of The Wall Street Journal on February 4, 2014. It was penned by Fay Vincent, the former commissioner of Major League Baseball. For non-fans, Vincent was hardly just a baseball guy and knew a thing or two about the law and business. He still does.

According to his Baseball Almanac biography, Vincent graduated with honors from Williams College in 1960 and receiving his law degree from Yale three years later. He began his legal career as an associate at Whitman & Ransom in New York and later made a partner at Caplin & Drysdale in Washington, D.C.  While in the nation’s capital, he also served as Associate Director of the Division of Corporate Finance of the U.S. Securities and Exchange Commission.

In 1978, he left the practice of law to become President and Chief Executive Officer of Columbia Pictures. Following the acquisition of Columbia by the Coca-Cola, Vincent was made Senior Vice President and President and CEO of its Entertainment Business Sector. Eventually, he was promoted to Executive Vice President of the parent Coca-Cola Company.

Vincent came to Major League Baseball in 1988, when he was appointed by then-commissioner A. Barlett Giamatti to be his deputy. When Giamatti unexpectedly died mid-term, Vincent was unanimously selected to complete his predecessor’s unexpired five-year contract as Commissioner. He started serving in that capacity on September 13, 1989. His term was marked by crises that started with the 1989 Loma Prieta earthquake during the San Francisco Giants’ World Series appearance and ended shortly after labor strife degenerated into a lockout of the players in 1990. It ended with a “no-confidence” vote by MLB owners and his subsequent resignation on September 7, 1992.

Vincent’s “Ten Tips” were written from a general business perspective for a general business audience, but they ring so true for the compliance function and internal investigations. Almost a third of them are rules that – not surprisingly – run contrary to the often truth-challenged, PR firm-spun damage control that breaks out at first hint of a compliance or ethics problem and internal probe.

These include:

“6. The important thing is to be sure that the important thing remains the important thing. Explain your strategy frequently and then rephrase it and repeat it.

7. Never complain; never explain. No one listens. Take the blame if something goes wrong. Do not blame mistakes on prior administrations, the weather, bad luck or your competitors. But don’t appear defensive.

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10. . . . [.] The only worthwhile public response to a crisis is honesty.

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If all the suggestions above were distilled into one essential message I’d offer to a person newly arrived in public life, it would be this: Tell the truth, at work and in public. But also remember: One does not have to answer every question, either from a colleague or a reporter. The press will accept a demurrer, but a lie almost always is soon uncovered, and the damage to the reputation of the person who lies—and often to the organization he represents—is severe.”

How true.

Recall that in the wake of the San Francisco crash of one of its planes last year, Asiana Airlines was pilloried in the media by PR types for not spinning the story to its benefit.  This before it even got an investigation started and at least a preliminary handle on what had happened to its aircraft and passengers. At the time, Asiana’s response was that – with a plane down and people injured – “it [was] not the time to manage the company’s image.”


Of course, such situations are not the time for phantom defenses or other excuses that seek to shift blame at all costs from the company under the microscope to anyone else:

“It wasn’t us.  We didn’t do it. And if we did, it was a rogue employee.  Or someone forced us to.  Or tricked us.”

Instead of sounding as incredible as a kid claiming the dog ate his homework, such companies ought to fit this to be the time for fair-minded objections to any rushes to judgment and honest statements of intent going forward:

“Right now, we do not yet know what happened or exactly how. But we are committed to finding that truth and reporting it to our shareholders and to the public, unless somehow precluded from doing so by the government or a court or a regulatory body. We are an honest and ethical company that is committed to doing the right thing – even if it hurts – and when we know, you will.”

That commitment to internal fact-finding should be the “important thing” that Vincent wrote of and loyalty to that process should become a mantra. So should a willingness to accept the blame, if and when it is appropriately fixed on the company.  Wouldn’t shareholders, the media, and the public consider that a more desirable first response to an organizational crisis and like it better?

Here’s betting they would.