FRA recently sponsored GIR Live Zurich on 26 November, where FRA Director, Kaisa Karvonen joined the panel, US v Connolly and outsourcing investigations. FRA Director Selma Della Santina attended the event, hosted by Lenz & Staehelin. The two panel discussions focused on the challenges companies face when conducting #MeToo investigations, and the consequences from governments effectively outsourcing internal investigations to companies themselves.
Here are their key insights:
The conference was kicked off by a keynote speech that underlined the complexities of the legal landscape when it comes to the admissibility of evidence collected during an internal investigation for the purposes of a criminal proceeding. Although there are no clear guidelines in Switzerland, it was once again highlighted amongst investigation practitioners that any evidence collected must be performed in a forensically sound manner. In Switzerland, when documenting interviews, submitting a summary account of an interview would most likely be deemed insufficient evidence by the public prosecution, as an answer cannot be evaluated without knowing what questions were posed during the interview. Corporations should instead aim at documenting verbatim interviews, including any emotional clues and demeanour of the interviewees with the best solution being a video recording - naturally with full consent of the interviewee.
The first panel discussed the challenges of conducting internal investigations relating to #MeToo allegations which began with a brief background to the movement that started in 2017 with accusations of sexual harassment against Hollywood director Harvey Weinstein. Startling references were drawn from the Pulitzer prize-winning book "Catch and Kill: Lies, Spies, and a Conspiracy to Protect Predators" written by the American journalist Ronan Farrow.
Key considerations were as follows:
- The company should not discredit the information provided by the employee if it initially does not sound coherent. Often the trauma associated with such an event can affect the individual's recollection of the event.
- Expectations should be managed from the outset as employers cannot guarantee that information provided to them can be kept entirely confidential.
- Balancing the act of protecting the interest of both parties (the person coming forward with the allegation and the potential perpetrator) can be an extremely delicate exercise and as such should be entrusted to the most senior and experienced in-house investigation specialists.
- Careful consideration should be given when deciding at which point the company informs the authorities in serious criminal matters, especially when the individual affected is reluctant to go to the authorities themselves.
Lastly, panellists from both legal and corporate backgrounds agreed that companies should always err on the side of caution and not dismiss any sexual harassment claim brought to their attention too hastily. A recent study in how sexual harassment claims affect a company's public image published by the Harvard Business Review revealed that participants perceived companies with sexual harassment claims less fair than those where any other types of transgressions were reported, such as financial fraud. More interestingly, the study showed that the quicker a company reacts and investigates the claim, the less public backlash it may face.
The second panel debated the case of US v Connolly, where the Southern District Court of New York concluded that the government had improperly outsourced the Deutsche Bank LIBOR manipulation investigation to the bank itself. The improper cooperation leads to a number of complications during the process and it was revealed that the government had waited three years before conducting any work independently. The panel noted that in Switzerland, the authorities tend to take a different approach compared to that of the US and would typically conduct their own independent investigation in parallel or subsequent to that of the corporate internal investigation.
It was noted that the "symbiotic" relationship that developed between the DOJ and Deutsche Bank may have stemmed from the fact that the bank was incentivized to "overshare" in order to take advantage of the deferred prosecution (DPA) relief available to it under US law. Conversely, under Swiss law, there is no equivalent to US DPA and consequently, companies may be less inclined to share results of their internal investigations.
Whilst the panel all agreed that the ruling in US v. Connolly is very much a US construct, it was also agreed that the ruling sends a strong message to companies outside of US borders. Companies need to preserve the integrity of their internal investigations from the outset in order to produce credible and reliable results. Panel member Kaisa Karvonen noted that key aspects that companies should consider include:
- Setting up an independent investigation governance of experienced investigators and SMEs with direct communication lines to the audit committee;
- Preserving the chain of custody when handling both physical documentation and electronic data; and,
- Deciding on an interview strategy carefully and where possible, collaborating with the Swiss authorities in interviewing main witnesses and/or persons of interest (the company being the damaged party), backed up with comprehensive documentation.
