Good evening, and welcome back to Compliance Hot Spots, our weekly snapshot of white-collar enforcement, regulatory and news and trends. In your inbox this week: Pandemic-era federal lobbying snapshot; inside the disarray at the U.S. attorney's office for D.C.; will the SBA be required to release more on PPP loan recipients?; and Skadden grows CFIUS practice. Scroll down for Who Got the Work, and more.

Thanks for reading, and we'd love your feedback. Contact C. Ryan Barber in Washington at [email protected] and at 202-828-0315. Follow @cryanbarber. And contact Mike Scarcella, subbing in for Ryan this week, at [email protected] and on Twitter @MikeScarcella.

 

   

Pandemic-Related Work Brings Windfall

Brownstein Hyatt Farber Schreck topped the second quarter lobbying revenue list, bringing in $12.9 million over the last three months, which according to their internal numbers is a 29% increase from the same period in 2019 and a 17% increase in the firm's haul from the first fiscal quarter, my colleague Patrick Smith reports at NLJ.

Four of the top five law firms for lobbying revenue saw an increase from Q1 to Q2, with only Akin Gump Strauss Hauer & Feld, which led the pack in Q1, showing a slight decline.

After Brownstein at $12.9 million, the top five firms included Akin Gump with $12.4 million, a slight drop from their group-leading $12.6 million in the first quarter but a 21.4% increase year over year; Holland & Knight came in at $7.15 million, up 19% year over year; Squire Patton Boggs at $6.67 million, up 11% from the same period in 2019; and K&L Gates at $5.1 million, up 15.4% YoY.

>> More reading: Special Interests Mobilize to Get Piece of Next Virus Relief Package. "Airlines, hotels and restaurants. Military contractors and banks. Even Broadway actors. These are just a few of the special interests already maneuvering to get a piece of the next coronavirus relief package about to be taken up by Congress." [NYT]

 

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Disharmony at US Attorney's Office for DC

The U.S. attorney's office for the District of Columbia is on its third leader in just months, and a fourth—Justin Herdman, a U.S. attorney in Ohio and former Jones Day partner—is the White House pick for the Senate-confirmed post. The National Law Journal's C. Ryan Barber explored the maneuvering in a piece this week.

The reshuffling—from Jessie Liu to Tim Shea to Michael Sherwin, now serving as the acting U.S. attorney—deepened a sense of disarray and upheaval that, combined with the coronavirus outbreak, has drained morale within the largest U.S. Attorney's Office in the country.

"Having worked in that office for the better part of my career, I can only imagine it is unsettling for most [career prosecutors], and that is because in any U.S. Attorney's Office, particularly in D.C.'s office, which serves as the local and federal prosecutor, you need stability," said Channing Phillips, who served from 2015 to 2017 as the acting U.S. attorney in Washington. "That just hasn't occurred in that office over the past several months."

Sherwin told The National Law Journal that since taking over the Washington office in May he has stressed to career prosecutors he views his role as supporting them and having their backs "100%."

"I think we're going through unprecedented times. Few U.S. attorneys who've ever held this office have had to confront a public health crisis coupled with social unrest and a litany of politically charged cases," Sherwin said. "It's a combination of multiple factors that make working at the U.S. Attorney's Office at this time very challenging. That being said, I want the office to know and the community to know that I am, one, a career prosecutor."

Sherwin continued: "I understand the challenges of being an AUSA, and despite significant turnover from Jessie Liu to Tim Shea to myself, the office should know that I have their back 100%. And, under my leadership, this office will be fully transparent and not only meet, but exceed, our legal and ethical obligations on behalf of this community and the United States."

 

 

Who Got the Work

>> Wilmer Cutler Pickering Hale and Dorr partner Fraser Hunter Jr., vice chair of the firm's securities department, was on the team advising UBS Financial Services Inc. in a new SEC enforcement action. "The Securities and Exchange Commission today announced that UBS Financial Services Inc. has agreed to pay more than $10 million to resolve charges that it circumvented the priority given to retail investors in certain municipal bond offerings," the agency said. Wilmer partner Jonathan Pressman was also on the UBS team. The company did not admit or deny wrongdoing. The SEC's investigation was conducted by the Division of Enforcement's Public Finance Abuse Unit, including Joseph Chimienti, Laura Cunningham, Warren Greth, Cori Shepherd and Jonathan Wilcox. Read the administrative order.

>> Barnes & Thornburg is advising the embassy of Ethiopia on "improving its relationship with the United States government through contacts and meetings with government officials on matters of interest to the Embassy," according to new filings at the U.S. Justice Department's FARA unit. The contract calls for $130,000 in compensation to the firm.

>> Lyft Inc. has a new lobbying partner: Barnes & Thornburg. Partner Brandt Hershman and Lauren Hancock will assist Lyft "with transportation regulations, independent workers and other issues affecting client's industry."

>> A K&L Gates team has signed up to lobby for Strategic Vaccines LLC "on vaccine development and production for COVID-19."

>> A team from Munger, Tolles & Olson advocates for Wells Fargo in a class action settlement that faced objectors in a Ninth Circuit appeal. Keller Rohrback LLP represented the plaintiffs. A handful of attorneys made arguments on behalf of objectors. The circuit panel upheld the settlement.

 

 

Compliance Headlines: What We're Reading

Federal agencies

Can the SBA Justify Its Decision to Release Only a Partial List of PPP Loan Recipients? "While the effort to foster transparency is laudable, the decision to limit disclosure to borrowers receiving loans over $150,000 leaves a large amount of information undisclosed. While the Treasury noted that its disclosure covers nearly 75% of the total funds loaned under the program, it neglected to point out that it reveals only about 25% of the borrowers. The public will remain in the dark as to three-quarters of the entities who received PPP loans," former U.S. Justice Department lawyer Matthew Collette, now a partner at Massey & Gail, writes. [NLJ]

Some Companies Got Both Government Contracts and PPP Loans. "Some government contractors took out loans from the Paycheck Protection Program even as they were paid for government work during the pandemic, a Wall Street Journal analysis shows." [WSJ]

FTC Considering Deposing Top Facebook Executives in Antitrust Probe. "The Federal Trade Commission is considering taking sworn testimony from Facebook Inc. Chief Executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg as part of its investigation into whether the social-media giant has violated U.S. antitrust laws, according to people familiar with the matter." [WSJ] NYT has more here.

Inside the Power Struggle Over the High-stakes Hearing with Top Tech CEOs. "A week ahead of the congressional hearing of four of the most powerful tech industry CEOs, the power struggle has already started. Lawmakers and advocacy groups are jockeying to shape the logistics of the first-of-its-kind July 27 gathering where the CEOs of Amazon, Apple, Facebook and Google will face questions—likely virtually—from the House's top antitrust panel." [Politico]

Lobbying

TikTok Enlists Army of Lobbyists as Suspicions Over China Ties Grow. "The social media company, which one year ago had virtually no lobbying presence in the nation's capital, has hired a small army of more than 35 lobbyists to work on its behalf, including one with deep ties to President Trump." [NYT]

Barr Warns American Executives About 'Foreign Agent' Risks in China Dealings. U.S. Attorney General William Barr on Thursday delivered a stark warning to American executives courting business in China, cautioning that their efforts to win favor in the country could put them at risk of running afoul of a federal law requiring the disclosure of influence activities for foreign powers. [NLJ]

Compliance

IBM Counsel and Others Weigh Slack's Impact on Corporate Investigations. Companies were embracing the use of alternative communications platforms like Slack long before COVID-19, but the onset of the pandemic has made those tools even more central to day-to-day operations. Hanzo's "Internal Investigations in the Age of Collaboration and Remote Work" panel held Thursday delved into implications for corporate investigations and examined how corporate legal departments were adapting. [Law.com]

Why Compliance Officers Have Even More to Worry About. "In its Thaddeus J. North v. SEC brief to the DC Circuit Court of Appeals, the Securities and Exchange Commission argues that a disciplinary decision from the Financial Industry Regulatory Authority against a chief compliance officer should be affirmed, which may portend bad news for compliance officers. The issues presented by the case are troubling because if the court sustains the disciplinary action, it could lead to 1) dozens of CCOs being charged every year for their firms' deficient procedures, even if they acted in good faith; and 2) a strict liability standard applying to 'should have known' liability." [ThinkAdvisor]

Data Privacy In-House Lawyers: Compliance Starts With Getting Business Side on Board. "Privacy is at the forefront, but the staffing and funding for privacy compliance is not yet aligned with what staffing and funding is for other critical compliance programs within companies," said Hugo Teufel III, chief privacy officer and deputy general counsel at CenturyLink in Denver. [Corporate Counsel]

 

 

Notable Moves & More

>> Skadden, Arps, Slate, Meagher & Flom is continuing to grow its CFIUS capabilities, announcing the addition of two former government attorneys Tuesday, three weeks after former Deputy U.S. Trade Representative Jeffrey Gerrish said he was returning to the firm, my colleague Dan Packel reports. Brooks Allen will join Skadden's Committee on Foreign Investment in the United States and national security practice July 27 as counsel in its Washington, D.C., office after seven years in the Office of the U.S. Trade Representative, most recently as assistant general counsel. Tatiana Sullivan (above, at left) will join the practice in September from Stroock & Stroock & Lavan in September as a senior associate. She previously served as the associate director for CFIUS operations and regulatory affairs for the U.S. Department of Defense.

>> FBI Director Chris Wray has turned to a former colleague at King & Spalding—Jason Jones—to serve as general counsel, the WSJ reports.

>> Jones Day has picked up former U.S. solicitor general Noel Francisco, who is returning to the firm. Francisco had been a leading appellate partner when he left the firm in 2017 for the U.S. Justice Department.

>> Meanwhile, Alston & Bird has snagged Jody Hunt, former assistant attorney general in charge of DOJ's civil division. Hunt formerly worked at King & Spalding before heading into public service.