WSJ, President Elect Trump, and Compliance Counsel vs. Compliance Officer

WSJ, President Elect Trump, and Compliance Counsel vs. Compliance OfficerBy Roy Snell

President-Elect Trump recently stated that he was going to hire a chief compliance counsel.  I have heard the term “compliance counsel” used a few times and am not quite sure what it means.  I typed “chief compliance counsel definition” into Google and all that came up were definitions for a chief compliance officer.  It was ironic because even Google seems to be confusing compliance counsel with a compliance officer.  So the best that we can do to define the term is to look at the way people use the term.  Fortunately for us, Sam Rubenfeld recently interviewed two attorneys and myself asking us what we thought President-Elect Trump’s compliance counsel should do.

Sam stated in his article entitled, Experts Ponder Role of Trump Organization Compliance Counsel:

Sheri Dillon, a partner at the law firm Morgan Lewis & Brockius LLP, said during Mr. Trump’s press conference in New York on Wednesday that the person holding the position would be responsible for ensuring the organization’s businesses “are operating at the highest level of integrity and not taking any actions that could be perceived as exploiting the office of the presidency,”

The attorney who was speaking for the president-elect seemed to imply they were hiring a legal counsel, not a compliance officer, to focus on the risk area of conflicts of interest.  There was no mention of a compliance program.

Daniel Alonso, managing director & general counsel for Exiger, was quoted in the article as saying, “It’s a difficult job, but a good lawyer with a good sense of professional responsibility should be able to carry it out.” Which is fine but again… no mention of a compliance program.

Sam also quoted Sherbir Panag, a global compliance lawyer practicing in India as saying, “This could be a golden moment to set the stage on public disclosure for corporations, a field which is very nascent.” The implication, which is consistent with Dillion’s announcement, is that this is a legal position focused on a single risk area.

The attorneys’ (Dillion, Alonso, and Panag) definition of the term “compliance counsel” is similar to the definition of “legal counsel” and not similar to the definition of a compliance professional.  I contend the term compliance counsel is no different than legal counsel and it confuses people.  I doubt that the use of the term will go away, but I think people should not be confused as to what the term means.  Sam added my comments to the end of his article:

Roy Snell, chief executive of the Society of Corporate Compliance and Ethics, said the Trump Organization should change the title of the compliance counsel to chief compliance officer, and the first thing that person should do upon hiring is implement a compliance program that comprises all of the group’s “seven essential elements.” The person should be responsible for all risk areas.

You have to focus on all elements of a compliance program equally and in a coordinated manner because that is what makes a compliance program work. Working on one element like audit, legal, risk or ethics separately or to the exclusion of others is what we tried in the past. It failed.

I would be remiss if I didn’t mention that the seven elements of a compliance program were not created by our group.  They were created by the United States Sentencing Commission and are listed in Chapter 8 of the United States Federal Sentencing Guidelines which suggested that companies should hire a compliance officer and implement an effective compliance program; and that those who don’t could receive double or triple penalties.  There is no mention of a compliance counsel in Chapter 8 of the United States Federal Sentencing Guidelines.

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  1. Great call-out on the development of the title of “compliance counsel” as compared to that of “compliance officer”. In the presidential appointment example, it is clear that a distinction should be made and that the higher need is for a compliance officer with the know-how and resources to build a program as you describe. That should not, however, eliminate the need for some large and diverse organizations (including the government) to also establish compliance counsel with sole or at least primary responsible for providing legal advice and guidance to the compliance officer. I hope your point was not to advocate for the elimination of the compliance counsel role. It is and should be a continuing need for most large organizations for the same reason that compliance should not report to the legal department. You still need substantive legal guidance and appointing compliance counsel makes the point that the legal department has a role, but that role is, in the compliance environment, ancillary to the officer role.

  2. I have worked in the past as a ‘Regulatory Attorney’ who was housed in the corporate compliance department. My role was essentially what I take this one to be-handling compliance-related issues from the attorney perspective. Issues around audits, investigations, policy making, and specific topics like overpayments. I imagine that this role would be akin to that, on a much larger stage. So if my interpretation is correct, it would be an attorney who is very solid on understanding compliance program elements as well as the legal and regulatory issues facing the office.

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