Ed. Note-We continue with our interview series of thought leaders in the compliance space. Today, we visit with T. Markus Funk, partner at Perkins Coie.
1. Where did you grow up and what were your interests as a youngster?
My father is a US-born travel photographer who worked for, among other publications, National Geographic, while my mother was a German-born psychologist. Because my father used Europe as his professional point of departure, I grew up near Koenigstein, Germany, attended Frankfurt International School, and spent school breaks in the US. One of the benefits of this trans-national upbringing is that I enjoy German-American dual nationality.
As a kid/teenager, I spent most of my time on the junior tennis and skiing circuits.
2. Where did you go to college?
I spent my undergraduate years at the University of Illinois, moved back to the Chicago to attend Northwestern University School of Law, and during the years between undergrad and law school toiled away as a “ski tech” and Motel 8 late-night clerk in Steamboat Springs, Colorado. Later, I pursued my PhD in law at Oxford University.
3. You started your career as a law clerk to Eighth Circuit Judge Morris S. Arnold and teaching law at Oxford University. So how and why did you come to join the DOJ?
I was very lucky in that my first “real” job out of law school was as a Lecturer of Law at Oxford University, teaching criminal and comparative law.
Although I thoroughly enjoyed the academic life, I noticed that most of my peers – like me – had never spent a day in court, never prosecuted or defended a single client, and candidly viewed the “practice of law” with some derision.
Seeing this lack of real-world experience as an opportunity to differentiate myself from my academic peers and very much desiring to make a difference, I applied to US Attorney’s Offices around the US. My goal was to gain some first-hand experience with the justice system, and to then return to teaching law in the UK, stay on as a prosecutor, perhaps do something else.
My top choice was to become a federal prosecutor in my law school home of Chicago. So when then-US Attorney Scott Lassar was kind enough to offer me the post, I immediately accepted.
As it turned out, I so enjoyed public service, working with great agents and fellow prosecutors, and working for US Attorneys Lassar and Patrick J. Fitzgerald, that I never returned to the UK – I stayed on as an AUSA for 10 years. I have tried to keep a foot (or at least a toe) in the academic community by serving as a Lecturer in Law at the University of Chicago Law School and as an Adjunct at Northwestern, and by writing books and articles. That said, working with colleagues to address client concerns and figuring out practical solutions for complex legal challenges has been so rewarding that a return to academia is not in my near future.
4. How did your work fighting corruption and helping establish the rule of law in post-conflict Kosovo in 2005-06 while detailed to the US State Department influence your thinking about the bribery and corruption?
My time in Kosovo as the USDOJ Resident Legal Advisor working for the US State Department was without question one of the most gratifying and eye-opening experiences of my professional and personal life.
We helped local prosecutors and legislators, as well as members of the international community (including international prosecutors), combat crimes such as human trafficking and counterfeiting. But more than that, my team (and, principally, Kosovo-native Dastid Pallaska, who later would go on to graduate from Yale Law School) and I had the privilege of taking a leadership position in the regional fight against bribery and public corruption.
Despite the pressing needs, few members of the international legal community active in Kosovo had spent any time in court or practiced criminal law – so there was a real thirst on the part of our local counterparts for learning not only about criminal law theory and public policy, but also to get a better understanding of how to put theory into practice by developing investigations and theories of the case, using undercovers, tracing proceeds of crime, etc. In fact, the need was so great that we wrote the Kosovo Trial Skills manual to address precisely these issues through the framework of the country’s then-brand-new criminal procedure laws. (The book, in fact, became the Kosovo Supreme Court’s most-cited-to source.).
One thing we also quickly learned is that, no matter how sharp the differences between the Kosovar and Serbian, Macedonian, and Montenegrin politicians might be, organized criminal groups were rarely, if ever, encumbered by ethnic squabbles and were at all times able to effectively and efficiently work together. They took advantage of the gaps in the local laws and their enforcement, and in a very intentional and ruthless manner exploited systemic weaknesses for their own financial gain.
But as a federal prosecutor out of Chicago who’s colleagues convicted, among others, Governor Ryan (and later Governor Blagojevich), I was always weary of “talking down” to our local counterparts or implying that we in the US or Europe are somehow always far ahead of our Balkan colleagues when it came to getting public corruption under control. In fact, the methods employed by companies and individuals engaging in public and commercial bribery in Kosovo were mainly on all fours with the way (corrupt) things were done in Chicago.
By educating the ruling political class on the negative impact of bribery and public corruption, we were able to introduce anti-corruption legislation, set up law enforcement task forces, and train financial institutions on how to identify suspicious activities and respond properly. This in-the-trenches view of FCPA and Travel Act compliance now helps me in the work that I do, and informs my thinking as I advise clients, deal with US Government officials, and interact with foreign law enforcement authorities.
In short, it is one thing to, as a lawyer, learn about the challenges of dealing with foreign vendors and manufacturers through the birds-eye view provided by books, articles, and court rulings. That said, there is no substitute for having been a first-hand witness to the significant challenges US companies face when they are operating in high-corruption environments.
5. You were the first to charge and prosecute a Deputy US Marshal (John Thomas Ambrose) with public corruption after he leaked highly-confidential information about the Witness Security (“WitSec”) program to the Chicago mob. What impact did that case have on your thinking?
The prosecution of John Ambrose was one of the most challenging chapters of my prosecutorial career. I don’t want to get into too many specifics. The realization that a sworn Deputy US Marshall was violating his oath by in real-time leaking extremely sensitive information about the whereabouts of what at the time was the program’s most sensitive cooperating witness to Chicago mob bosses seemed like the stuff of a bad crime novel. That this could happen in the 2000s demonstrated that complacency is the enemy. Adapting this realization to my compliance and internal investigations work, making assumptions about what “most likely happened” makes complete sense; but prejudging a situation by assuming that what likely happened is what really happened can have disastrous consequences for the client.
6. You also prosecuted the “Operation Family Secrets” Mob case. National Public Radio in 2013 described the case as “one of the most important criminal investigations . . . in American history.” How did that experience impact your current work?
One of the reasons the public and press paid so much attention to this 5-year investigation and 3-month trial of the Chicago mob (a/k/a/ “Chicago Outfit”) was that the murders and characters involved – including “Lefty” Rosenthal and the Spilotro brothers – were featured in Martin Scorsese’s movie “Casino.” But to me the opportunity to work with senior prosecutors like John Scully and Mitch Mars, and exceptional FBI Agents like Mike Maseth, and vindicating the rights of scores of victims who were forced to wait decades for justice, was a once-in-a-lifetime experience.
The trail of murders, mayhem, and victims these organized criminals left behind was something I had only experienced in the context of war criminals – and war criminals are rarely glamorized in the way that some of our mob defendants were. Bringing these men to justice was the true capstone to my prosecutorial career, and the team’s receipt of the USDOJ’s highest trial performance award, the U.S. Attorney General’s Award (“John Marshall Award for Trial Excellence”), was something I continue to be very proud of.
In terms of lessons learned, nervousness and emotion are part and parcel of high-stakes litigation. But not letting these emotions overtake you, and turning these feelings into a positive, is critical.
7. At your firm of Perkins Coie, you helped establish and co-chair the firm’s Corporate Social Responsibility and Supply Chain practice area. What type of work does this entail?
In 2011, my colleague J. Cabou and I set up Perkins Coie’s Corporate Social Responsibility and Supply Chain Compliance Practice – the first such dedicated practice among the AmLaw 100.
One of my personal goals in focusing on this practice was to leverage my first-hand experience fighting corruption, bribery, and trafficking in the Balkans and elsewhere; my background as a federal prosecutor who handled many white collar cases in Chicago; and my familiarity with the subject matter as an academic who studied these areas. J and I saw this as a developing practice area, and as an opportunity to bring our very unique experiences and expertise to bear on complex issues that, in the main, not of the type that private practitioners encounter or understand.
By way of illustration, at the time we set up the practice many wondered what “CSR” and supply chain issues had to do with corporate compliance and investigations. Today, with ground-breaking laws and regulations like the Executive Order Against Trafficking in Supply Chains, the California Transparency in Supply Chains Act, and the SEC’s Conflict Minerals rules, and with the ramped-up enforcement of the FCPA and US Travel Act, you can barely turn a page in the National Law Journal, New York Times, or Wall Street Journal without reading about a governmental investigation, advocacy group protest, or consumer boycott focusing on real and alleged violations of such laws.
Having participated in raids trafficking operations in the Balkans, drafted anti-corruption and forced labor legislation, prosecuted organized criminals, and written Oxford University Press books and other think-pieces on enforcement and legislative trends in these areas, I felt like this was a natural practice area to help pioneer. That fact that today many firms of all sizes are seizing on the growth of this practice area and are beginning to market their services only further serves to confirm that clients are experiencing very real needs and are looking for counsel who truly understand the practical concerns these novel legal issues implicate, and the pragmatic legal guidance they call for.
8. You were one of the lawyers involved in the Esquenazi appeal, challenging the constitutionality of the FCPA? Can you describe that experience, both from authoring the briefs to the oral argument.
We took on Joel Esquenazi’s appeal pro bono because we recognized the public importance of the federal courts of appeal for the first time weighing in on the USDOJ’s expansive (and, in the view of many, over-expansive) definition of what qualifies as a “foreign official.” The prevailing “we will know it when we see it” enforcement approach has troubled observers and companies for years, and can be difficult to reconcile with common conceptions of fair notice and due process.
My colleague Mike Sink and I, joined by co-defendant Carlos Rodriguez’s counsel, advanced these arguments in our briefing to the Eleventh Circuit, as well as during our October 3, 2013, oral arguments. We have every reason to believe that the time lag between argument and ruling is further evidence that the Court is taking this issue very seriously, and we continue to look forward to receiving a favorable ruling that will provide the global business community with the clarity they have long-since asked for, but that no federal court of appeal has ever weighed in on.
Markus Funk can be reached at firstname.lastname@example.org