All Things Investigations Podcast

Tom Fox (00:01):

Hello everyone. This is Tom Fox back for another episode and today I have with me, Kenyen Brown. Kenyen has a great background and has a frankly, an extremely interesting practice that we're going to talk about and tie it into ESG. So Kenyen, first of all, welcome and thank you for taking the time to visit with me today.

Kenyen Brown (00:23):

Well, I sure appreciate the invitation. I'm glad to be here.

Tom Fox (00:27):

Could you tell us a little bit about your academic background?

Kenyen Brown (00:33):

Sure. I graduated from the University of Alabama Roll Tide back in the day. I won't say how long ago, with a degree in television and radio broadcasting. Then I matriculated to the University of Tennessee up in Knoxville where I got my law degree.

Tom Fox (00:55):

And what's your current role Kenyen?

Kenyen Brown (01:01):

So currently I'm a partner with the law firm of Hughes Hubbard & Reed. And they're predominantly based in New York City and Washington, D.C.

Tom Fox (01:12):

Before you got to Hughes Hubbard, you were an AUSA. So I'd like to maybe turn to that and ask you a little bit about that experience. Where were you an AUSA and can you explain for those who might not know, what does it mean to be an AUSA?

Kenyen Brown (01:33):

Sure, sure. And actually I was both a United States Attorney and an Assistant U.S. Attorney in the Southern District of Alabama based in Mobile. And I was brought on as an AUSA during the Clinton administration and was a Senate confirmed U.S. Attorney during the Obama administration. And for those who might not be familiar with what an AUSA does, they're the top civil litigator and top criminal prosecutor on behalf of the United States for certain geographic region enforcing federal laws.

Tom Fox (02:13):

What's the difference between an AUSA and being the U.S. Attorney for a district in the United States.

Kenyen Brown (02:26):

That's a great question. Beyond the Senate confirmation, as the head guy in the office, you have the responsibilities of interacting with the attorney general in order to implement, in some regard the administration's prosecutorial priorities, but each U.S. Attorney still has pretty wide discretion in the things that they want to pursue within their jurisdiction.

Kenyen Brown (02:56):

But it's to make sure that the overarching administrative responsibilities of the office are in the hands of someone that is aligned with the current administration. And once that current administration is out the door. So is that United States Attorney. Conversely, an Assistant U.S. Attorney is a career person that has that job for really as many years as they would like. And they are responsible for prosecuting cases, both civilly and criminally under the administration of the appointed U.S. Attorney.

Tom Fox (03:38):

What's the relationship between main justice and the various district attorney's offices throughout the United States.

Kenyen Brown (03:47):

Again, here's predominantly a coordinating question. And so the U.S. Attorneys generally have pretty good leeway in pursuing the cases that they would like. However, if they get too far afield, you might have the justice department call them up, or the deputy attorney general saying "hey, that's not in line with our prosecutorial prerogatives at the administration level. You better reign it in some", or if you're too lethargic you in some areas they might say "hey, you might want to consider prosecuting these cases".

Kenyen Brown (04:29):

But really they don't typically engage in that finite level. What they do is they put out resources that come from Congress. The administration will say for example, for border security, the administration will go to Congress and say "hey, we need more money for enforcement of the border". And then you'll get as a district, additional money to bring on a prosecutor or two or three that are specifically tasked with those responsibilities. So usually, it's not as dumb and weeds, but they do help kind of shepherd you in certain directions based upon the resources they make available to you.

Tom Fox (05:11):

You mentioned the deputy attorney general in the compliance world. We hear from the Deputy Attorney General or the DAG from time to time, we heard from Deputy Attorney General Lisa Monaco last October in a speech about some compliance issues. Of course, we had the Sally Yates memo and she was deputy attorney general. Can you explain the role of the deputy attorney general within the justice department?

Kenyen Brown (05:37):

Sure. They have very broad responsibilities. And again, they are the person that really helped with the attorney general, set the tone for the department's policy activities and making sure that they communicate that accurately to the public, as well as leading the different U.S. Attorneys in pronouncing and following those policy dictates. So I would say that they're tone setters if I could put it so politely and they help administer the day to day operations of the department as a whole.

Tom Fox (06:20):

I'd like to turn back to your career as AUSA and ask you, how did that experience as a trial lawyer, whether a civil or criminal help really inform your views that you've been able to take forward today, who were some of the people you worked under and what was it like to learn as an AUSA?

Kenyen Brown (06:43):

You know, it was great. Great experience, lots of trial experience there, very early in the career. I was first a deputy district attorney in Montgomery, and I was in that role for about eight months prior to coming over as an Assistant U.S. Attorney. And just the training opportunities you have just ratchet things up several notches in terms of your experience. And then you're thrown in there and given tremendous responsibility and it is something, if possible, I would recommend for any lawyer to pursue particularly early on in their career. And of course, combining that with the U.S. Attorney. I prosecuted and oversaw the prosecution. If we're talking about the environmental and regulatory space, prosecuted a pair of cases involving shipping companies who were dumping oil bills into the ocean and into the Gulf of Mexico. And these companies were convicted and sentenced to pay $1 million criminal fines and in addition to that $300,000 in community service payments.

Kenyen Brown (08:00):

They were ordered to also fund and implement comprehensive environmental compliance program during a two year probationary period. The chief engineers were sentenced to one month in jail, but keep in mind, they had to remain in the port of remote being foreign nationals for over a year while their trial was pending. So there's a lot of risk there associated with that type of activity. Also prosecuted instances of healthcare fraud, where doctors were making Medicare and Medicaid reimbursement claims for providing services that they didn't provide, or a nurse provided the service instead of the doctor and they were seeking higher reimbursements. Also prosecuted individual companies, engaged in fraudulent purchase of, and reimbursement of durable medical equipment. And these charges were generally brought under False Claim Act.

Tom Fox (09:05):

Kenyen you also worked at on the hill, I should say Capitol Hill. Don't mean to sound like an insider, but on the Senate Ethics Committee. And I would like to turn to your time there now and what was your role and what were some of the key things you thought you accomplished while you were there?

Kenyen Brown (09:24):

Well, while there I was the longtime counsel and ultimately the Senior Counsel for the Senate Ethics Committee. And then I was the Acting Chief Counsel and Staff Director for the House Ethics Committee. And in both those roles that included performing investigation into alleged wrongdoing by senators and staff, giving them day to day advice on the application of the Senate ethics rules and whether or not they could do certain things, whether there is a conflict of interest or whether or not they could accept a particular gift or a trip or something like that. Also provided training to them and oversaw financial disclosure for the members and staff. Now, unfortunately, most of the investigative activities I did for those committees is still confidential. However, I can say that the environment was much more volatile in the house as compared to the Senate. And I think that's largely due to the fact that those house members are elected every two years and they tend to be a lot more reactive to partisan political concerns.

Kenyen Brown (10:44):

Now, historically speaking, at least in recent times, ethics issues have actually been the basis to be a club, to beat the other side with, to win a majority of Congress back with. You heard things from, Hey, we're going to drain the swamp over there. And then a couple of cycles later, they say they didn't drain the swamp and we can drain the swamp better than they can. So I guess my greatest achievement during my congressional days was running those investigations in the house with integrity and not having the House Ethics Committee imploded upon itself and lose the trust of the public for the work that we have to do.

Tom Fox (11:26):

Okay. I'd like to now turn to your move to Hughes Hubbard and ask you if you could tell us a little bit about the nature of your current practice.

Kenyen Brown (11:35):

Sure, sure. Yeah. So at the end of four years, some private practice in Alabama after my 10 years U.S. Attorney. I just wasn't satisfied that I was practicing at the highest level as I had become accustomed to in my tenure with the government. There's not that large of a corporate presence in Mobile or Alabama. So I found it difficult to do some of the things that I wanted to do at the level I wanted to do them, at least from Mobile.

Kenyen Brown (12:07):

And Hughes Hubbard has a tremendous platform with a substantial corporate client base, and they do level and they do rather work at a high level, both nationally and internationally, and their primary offices are in New York and Washington, DC, both rich with a corporate presence. So I found a very attractive opportunity for me to come back to Washington, DC, where I have a lot of congressional connections and former colleagues that have gone on to do just great things, even in the corporate sphere. So being here really puts me at an advantage to service clients in the way that I'd like to. Now in terms of my particular focus, it's on white collar, criminal defense, corporate compliance, counseling, and organizational counseling, as well as some congressional investigations and general litigation.

Tom Fox (13:07):

One of the things that intrigued me about your practice, that I was able to discover and researching a little bit about you is that you've worked with police departments and communities to help identify systemic racial and gender discriminations. Could you tell us a little bit about that practice?

Kenyen Brown (13:24):

Absolutely. When I was the U.S. Attorney, I had the honor as serving as the chair of the attorney generals advisory committee subcommittee for law enforcement community relations. And in that role, I had the opportunity to see a lot of policing and community problems and the strategies communities used across the country. And in order to address these problems, I also had the opportunity to see and observe and review a lot of police department policies and trainings.

Kenyen Brown (14:01):

So I have an informed opinion on what works and what doesn't work, what practice may be technically legal for police departments to engage in, but nonetheless erode public trust. So I came up with a number of programs when I was the U.S. Attorney to address these stormy issues and advise the larger police community on how to solve some of these universal problems in a balanced way. For example, no knock warrants totally legal with the judge's approval, but it only should be used in Exigent circumstances where a victim's life is at stake. Otherwise, no knock warrants are really too dangerous for police and for citizens, police should make their case against a suspect before they arrive on the scene to execute a search warrant. Really, if a suspect is flushing drugs down the toilet, is it really worth the police risking their lives or the life of a suspect to get a bag of dope going down the toilet.

Kenyen Brown (15:03):

Also, if the police are executing an arrest warrant after all a defendant or a suspect, can't flush themselves down the toilet. So what's the hurry. If they have at worse, an hours long standoff with the guy before he surrenders what's the loss. In other words, life should be prioritized over getting that evidence. So I've felt police departments review their policy and trainings to make sure that they're actually sound and promoting public safety also partnered with a prominent police training entity known as caliber press to provide police trainings on implicit bias or third party, officer liability, otherwise known as the duty to intervene such as you saw recently in last month's trial up in Minneapolis, Minnesota were three officers who were bystanding the George Floyd Mo murder were actually personally criminally responsible and liable for constitutionally violating George Floyd's constitutional rights. So we advised for police departments on how to administer their policies to address those types of concerns.

Tom Fox (16:18):

Let me go back to the no knock warrants, because you said something in there that really intrigued me, which was police safety and that a police practice in the kind of public discussion police is really not mentioned either at all or not enough, but you are able to flesh out police practices that could endanger both police and perhaps the public. So I wanted to maybe focus on the police safety issue. When you sit down with colleagues or others in the police enforcement community and have that discussion, does that type of argument work with them that fellas, this is a safety issue, a safety for everyone, including your officers as well.

Kenyen Brown (17:04):

You know, by and large, the far majority of police chiefs that I talk with recognize that no knock warrants are not the best way to go. In fact, I've talked to some that have been in policing for 30, 35 years, and they said they've never used a no knock warrant. And in fact, in when we talked about Minneapolis, they themselves had adopted a policy of no knock warrant after the George Floyd murders, but mysteriously or for some unknown reason, they nonetheless sought one when they were trying to enforce a warrant of a St. Paul, Minnesota police department. So it's a mystery to me why they did that when their own policy said, don't do it. So by large, I think the sentiment there is unless there is an Exigent circumstance that would warrant a no-knock intrusion most police recognize how dangerous that is.

Tom Fox (18:13):

Let me turn now to your wider work in racial and discrimination issues, and maybe tie that to the current ESG discussion, particularly the S how do you see the wider work you do in private practice, outside lawyer, white collar defense lawyer, but in the racial and discrimination area, as part of that discussion of the S and ESG?

Kenyen Brown (18:39):

You know, my New York stock exchange sources advise me that ESG and human capital management that kind of covers these areas and the audits and disclosures related there too, are going to become more and more mandatory and less voluntary. I think the watershed moment has arrived where corporations can't ignore ESG issues or human capital management issues. The New York exchange will increasingly say that ESG and human capital management issues impact our corporation's financial viability as they seek to balance profit margins against ESG and human capital management risk factors. Now, there's not only accountability to protect against fraud, waste and abuse anymore, but you have in the classical context, but the dynamics has shifted to also include shareholder and stakeholder accountability. And the SCC and the New York stock exchange are starting to formalize more and more ESG and human capital management disclosures for shareholders and stakeholders to review.

Kenyen Brown (19:56):

As a result, we're starting to see shareholder derivative lawsuits crop up across the country where corporation as an ESG or human capital management scandal resulting in a drop in share value. And shareholders are actually suing corporations that have previously held themselves out to be ESG compliant, arguing that they're actually not, and the resulting stock value loss and the reputational loss that they have is damaging them personally, as stockholders. Now, most of these cat cases have not worked their way through the system yet. So we really don't have a great opinion yet about whether or not this will be a continuing trend or a successful trend, but I think corporations need to know that this is a new area of risk for them and they'd be wise to kind of get out in front of it.

Tom Fox (20:53):

That really brings up a great point, which is, I won't tell you how long I've practiced, but let me just say longer than you. And so I think we were both raised in a legal academic background to understand the regulatory and legal risk, provide counsel on those regulatory and legal risks and perhaps provide solutions for our clients. But now we're really moving to an era where reputational risk could be greater than a legal, finer penalty.

Tom Fox (21:25):

So I come out of the anti-corruption compliance world, the FCPA world, and as bad as some of those fines were, it was the stock price dip. That was the bigger hit for many of these companies. And you mentioned that a couple of times in terms of what the New York stock exchange is seeing and advising on, and how do you sit down and talk to a company about guys, here's the range of potential fines and penalties, but that's only one third, one half or one something of what your true risk could be. How do you have those conversations now as outside counsel?

Kenyen Brown (22:00):

You know, I think that's a great question. And before I get to the substance of that, I want to relate back to the house and Senate experience. We were investigating allegations against a certain member of the Senate who was up for re-election in the coming year. And he had engaged in certain conduct, which we found out ultimately did not violate the rules, but nonetheless gave the appearance of wrongdoing. And we took no formal action against him, but just said, Hey, you know what? This conduct was inadvisable, you shouldn't have done it. You didn't technic, or you didn't technically violate the rules, but you should have used better judgement.

Kenyen Brown (22:50):

And that being released in the press created such a windstorm of criticism around this member that he actually abandoned his re-election campaign. So if the public wins and public criticism can impact a powerful politician in that way, an incumbent, powerful politician. I think companies would be wise to kind of heed that lesson and understand that a ounce of prevention is worth a pound of cure.

Kenyen Brown (23:28):

And if you have an incident that if you do an audit, an ESG audit or a human capital management audit beforehand, and you're trying to manage that risk, but you nonetheless have an incident, at least you can point to your efforts to get out in front of that issue rather than being completely on the defensive. You can point to the positive things that you've done to prevent these type of situations from happening and how the actions of that one bad actor or those outlier actors really don't fit with your corporate policy values or vision. It allows them to mitigate reputational risk and somewhat take control of the public narrative being said about them or the narrative that's developing about them. In this way corporations can more quickly get back to the things that they do do rather than spend their energy and time and resources putting out reputation of fires, put it put another way, a good ESG and human capital management program can act as flame retardant to an ESG or human capital management allegation.

Tom Fox (24:45):

Let me mentioned the speech by Lisa Monaco in October to the ABA White Collar Defense Conference. And one of the things she said in that speech, I think for the first time we in the compliance community heard was that the department of justice wanted to know about a company's culture, that they viewed that as a critical element, whether it be an FCPA case or perhaps other white collar case. So I wanted to maybe use that as a lead in to how you would advise a company perhaps around a culture audit or an investigation. If a situation arose, how would you talk to them about performing such an activity or hiring yourself to do so to help proactively mitigate risk or even respond to an existing crisis?

Kenyen Brown (25:30):

So workplace culture audits are just kind of another way to describe human capital management in terms of the audit, but it goes just beyond race or gender. It's also an analysis of whether or not the corporate culture or the culture at climate encourages people, for example, to speak up when they observe wrongdoing across a spectrum of issues, it's inclusive of race and gender issues, but it also includes fraud, waste, and abuse.

Kenyen Brown (26:03):

Does the corporation have an environment that discourages retaliation for someone reporting wrongdoing? Does the corporation have multiple ways for employees and the public to report that misconduct? Are there anonymous ways to report that misconduct? Does the corporation hold its third party vendors and partners accountable for the same corporate value? So I think that those are the type of things that they have to manage reputationally, as well as things that, as you mentioned, the department is looking at in the more classic traditional lanes as to whether or not a corporation has a viable, effective compliance program.

Tom Fox (26:47):

I'd like now to turn to maybe looking down the road a little bit and where you see ESG and some of these other issues in your white collar practice and 2025 and beyond you had a great phrase, you got actually had a lot of great phrases. I'm going to prolong and I'll tell you right now, flame retardant was great. But where do you see these types of issues in your practice? A little further down the road?

Kenyen Brown (27:16):

Well, I'll give an example before I get to that. I was called in to do by a defense contractor, an allegation of racial bias and I started digging into it and I really didn't see or observe the racial bias. But what happened was that the head of production of the company was let's just say overzealous, trying to respond to co COVID staffing shortages and was subsuming the role of human relations and labor relations.

Kenyen Brown (28:01):

And what essentially was how happening was that the production department was coming in and excusing people for significant time discharging that was going on and kind of characterizing it as something else. Despite the fact that the government compliance officer raised red flag say, "Hey, there's a problem. We've got time discharging". But due to the influence of the head of production, they really couldn't stop it because the officials at the top kind of gave deference to the production guy who had been there for many years and had a lot of influence in the company.

Kenyen Brown (28:43):

So I found that situation very interesting in that they really needed an outside person audit person to come in and say, look, you've got a problem. You've got to correct it. But where it started, because the HR and labor relations persons happened to be African American was an allegation of race disparity and them not being honored in those respective roles, which I found out to be was not a race based discriminatory thing. It was more tension between production and HR. So I say, to say sometimes when you pull at the tapestry of some of these race based claims or gender based claims, you might find out a lot more than you expect in terms of your culture. So, and I'm sorry if that was far field for what you asked, but I thought it would be Jermaine, but from what I understand and observe the trend is that the SCC and New York stock exchange will increasingly require more ESG human capital management disclosures.

Kenyen Brown (29:51):

They will be heightened accountability to not only shareholders, but to also stakeholders that will impact companies value their mission and their organizational goals. And I would advise them to get out in front of these issues perspectively so that they are armed with something that they can use to defensively mitigate these reputational risk. And perhaps even lawsuits. If you're found, if someone in your organization is far field from your stated policy that might get you out of the lawsuit, it might limit your exposure when it comes time for the jury to award damages. So these are things that corporations should be doing proactively as this area of the law continues the trend, and it has been trending over the past 25 years. But now I think we're at the kind of watershed moment where these things really matter.

Tom Fox (30:55):

Kenyen, unfortunately we are near the end of our time for this episode, but I was wondering of our listeners wanted more information on yourself on Hughes Hubbard, or perhaps some of the topics we've touched on what would be the best way for them to find out more?

Kenyen Brown (31:06):

So for me personally, they can give me a ring at 2-0-2-7-2-1-7-6-0-0 again, 2-0-2-7-2-1-7-6-0-0. Or you can reach me by email at Kenyen, K-E-N-Y-E-N.brown@hugheshubbard.com. We'll also be sending out or publishing on our website, a guidebook for corporations as to ESG and Cuban capital risk management very soon. So, so keep a look on our website also more generally, keep an eye on rather the SCC website for developments in this space.

Tom Fox (31:47):

Well, Kenyen and I wanted to thank you for taking the time to visit with me. It's been a great interview. Thank you.

Kenyen Brown (31:52):

Thanks so much now.

Tom Fox (31:53):

Okay. All right, Super.

Kenyen Brown (33:03):

I appreciate that. I appreciate that. Yeah.

Tom Fox (33:13):

All right. Thank you and see you soon and be glad to be a guest another time.

Kenyen Brown (33:18):

All right. Take care.