Audits and Investigations

On June 27, 2016, in McDonnell v. United States, the Supreme Court resolved a case of substantial interest to businesses that interact regularly with government officials with respect to grants, contracts, regulations and numerous other matters. The Court vacated the conviction of the former governor of Virginia, Bob McDonnell, because it was based on an improperly expansive interpretation of “official act” as used in the federal bribery statute. The Court’s opinion rejects the Department of Justice’s expansive interpretation of the relevant statutes and holds that a government official’s “setting up a meeting, calling another public official, or hosting an event does not, standing alone, qualify as an ‘official act’”—and, thus, is not sufficient to support a conviction. Instead, an honest services fraud allegation must involve:

  • Ÿ “a decision or action on a ‘question, matter, cause, suit, proceeding or controversy’”
  • Ÿ “a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee”
  • Ÿ “something specific and focused that is ‘pending’ or ‘may by law be brought’ before a public official”
  • Ÿ a “public official [who] make[s] a decision or take[s] an action on that ‘question, matter, cause, suit, proceeding or controversy,’  or agree[s] to do so.”


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Marcia Madsen recently presented an excellent paper, which was co-authored by Michelle Litteken, at the ABA Section of Public Contract Law’s annual meeting in Boston. During the ABA meeting, Marcia also moderated a panel on important issues that frequently occur during investigations of Government contractors. For executives or counsel dealing with issues in a

Today, the D.C. Circuit granted a mandamus petition in an important case, In re Kellogg Brown & Root, involving to preservation of the attorney client privilege for internal investigations in today’s heavily regulated government contracting environment. The ability of companies to seek and protect the advice of counsel—which is critical to a company’s ability to conduct its business, and respond to and investigate compliance issues—is substantially bolstered by the decision in two vital ways.
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