Daily Dicta: The Good News (and Bad) About New U.S. Attorneys; Gibson Dunn Gets an A+

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Left to right: Richard Donoghue and Geoffrey Berman[/caption] There’s good news and bad in the list of 17 interim U.S. Attorneys appointed by Attorney General Jeff Sessions on Wednesday. The good: The Eastern District of New York went to Richard Donoghue, an 11-year veteran of the office and most recently senior vice president and chief litigation lawyer at CA Technologies.Newsday reports Donoghue “was clearly the most popular choice among alumni of the office, local law enforcement officials and Sen. Chuck Schumer.” He reportedly beat out Kasowitz Benson Torres partner Edward McNally for the post.My issue with McNally is not is his qualifications—he has deep prosecutorial experience. It’s that he interviewed with Donald Trump for the job, per Politico and CNN. So did Geoffrey Berman, the Greenberg Traurig partner tapped as interim U.S. Attorney for the Southern District of New York.As I’ve noted before, this is troubling. Granted, Berman is serving on an interim basis. President Trump has 120 days to submit permanent nominations for Senate confirmation.Still, as Preet Bhararaput it, “It is neither normal nor advisable for Trump to personally interview candidates for U.S. Attorney positions, especially the one in Manhattan.” Because U.S. Attorneys are supposed to be impartial, administering the law without undue political influence. They serve at the pleasure of the president, but they don’t serve the president.It hardly seems coincidental that the three U.S. Attorney’s offices where Trump reportedly interviewed potential appointees were Washington D.C. (where he met with Jessie Liu prior to her appointment), Manhattan and Brooklyn—the same offices that would seem most likely to investigate Trump, his associates or his companies.That seems a bit too cozy for comfort.The other interim heads include Gibson, Dunn & Crutcher partner Nick Hanna for the Central District of California and Craig Carpenito for the District of New Jersey. He joins from Alston & Bird, where he was a co-chair of the firm’s litigation and trial practice group and its government and internal investigations team. Kenji Price of Alston Hunty Floyd & Ing got the nod as interim U.S. Attorney for Hawaii. In Detroit, Matthew Schneider, a top aide to state Attorney General Bill Schuette, will be the interim top prosecutor.One oddity: Dayle Elieson was tapped for the District of Nevada, but is currently a prosecutor in Texas. According to online records, she is not a member of the Nevada state bar. Gretchen Shappert, interim head of the District of the Virgin Islands, was the U.S. Attorney for the Western District of North Carolina from 2004 to 2009 and went on to work at the Executive Office of U.S. Attorneys.The other interim heads are all former first assistant U.S. Attorneys or AUSAs. Most have been running the offices on an acting basis already. They are:Shawn Anderson -- Districts of Guam and the Northern Mariana Islands Gregory Brooker -- District of Minnesota Stephen Dambruch -- District of Rhode Island Duane Evans -- Eastern District of Louisiana Timothy Garrison -- Western District of Missouri Joseph Harrington -- Eastern District of Washington Grant Jaquith -- Northern District of New York Maria Chapa Lopez -- Middle District of FloridaAlexander Van Hook -- Western District of Louisiana [caption id="attachment_875" align="aligncenter" width="620"]

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An A+ for Gibson Dunn

In the sea of law firm client alerts and year-in-review publications, here’s one that stands apart: Gibson, Dunn & Crutcher’s analysis of the Foreign Corrupt Practices Act. The anti-corruption law turned 40 in December. In honor of the birthday, the firm on Wednesday unveiled a comprehensive review of FCPA cases and stats, plus some interesting frontline insights. To wit: “There is an energy in the hallways of the Bond Building, where DOJ’s FCPA Unit is staffed with a driven and relatively young team of prosecutors—clocking in at a median age just shy of 40, most were not alive when the statute was signed into law. Led by the articulate and indefatigable Dan Kahn, the majority of the 31 attorneys currently assigned to the unit attended elite law schools, nearly 70 percent completed prestigious federal judicial clerkships early in their careers, and while more than 80 percent have private practice experience, the majority started with prior prosecutorial experience. “Charles Cain, a quick study who distills complicated scenarios effortlessly, just this year assumed leadership of the SEC’s FCPA Unit. His attorneys likewise have deep experience, with the majority of the 31 attorneys joining the unit from other positions at the SEC and nearly half having spent five years or more in the unit.” Gibson Dunn reports that in 2017, there were 39 combined DOJ/ SEC enforcement actions—down from 53 in 2016, but still more than any year between 2012 and 2015. Fifteen defendants were sentenced on FCPA and FCPA-related charges last year. Since the law’s inception, the largest number of enforcement actions have involved China, followed by Nigeria, Mexico, Indonesia and Iraq. Read the full report here.

On the Side of Angels

In other Gibson Dunn news, partner Tom Dupree racked up a significant win before the Massachusetts Supreme Judicial Court. Dupree represented H. Fisk Johnson III, the head of S.C. Johnson & Son (and one of the wealthiest people in the United States) in connection with his investment in biotech startup Genitrix, LLC. The plaintiff, Genitrix co-founder Andrew Segal, was the company’s president and sole officer. When Genitrix began to fail, Segal chose to forego a salary, but later sued Johnson and Stephen Rose, who was appointed by Johnson to Genitrix’s board of directors. (Rose was also represented by Gibson Dunn.) Segal demanded unpaid wages, claiming that the Wage Act made Johnson and Rose responsible for his salary as “agents having the management” of the company. A jury found Johnson and Rose were liable for Segal’s wages, as well as treble damages, prejudgment interest, attorney fees and costs. Had the verdict stood, it could have been a killer for angel investors in Massachusetts—because who wants to invest in a risky start-up if you’re going to be personally liable for paying the workers if it fails? Dupree convinced the Massachusetts high court to take the case for direct appellate review, bypassing the intermediate court. On Dec. 28, he won across the board. The Wage Act “does not impose personal liability on board members, acting only in their capacity as board members, or investors engaged in ordinary investment activity,” the Massachusetts high court found. “Rather, to impose such liability, the statute requires that the defendants be ‘officers or agents having the management’ of a company.”

Lateral Watch

Sidley Austin snapped up Brian Stretch, the U.S. Attorney for the Northern District of California. A career prosecutor, he remained on the job even after Donald Trump took office. Stretch (whose brother is Facebook GC Colin Stretch) will join Sidley’s San Francisco office in February, working on internal investigations for the firm’s technology, life sciences and financial services clients in the region. Why Sidley? “It was important to me to identify a firm whose values I shared,” he told my colleague Ross Todd. Read the full story here, including a list of frontrunners to replace Stretch as U.S. Attorney.

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