Walmart retail store. Walmart retail store. Photo: Shutterstock

One of the most unusual factors about the long-awaited Walmart Inc. foreign bribery settlement last week was its treatment of the compliance monitor.

Attached to the end of the nonprosecution agreement between the company and the U.S. Department of Justice was a 14-page section describing in meticulous detail the monitor's duties and timetable for completing them.

Laura Perkins, a partner in Hughes Hubbard & Reed's Washington, D.C., office and co-chair of the anti-corruption and internal investigations practice, said she was surprised by the wording in the attachment.

“It's not the usual form language,” Perkins said. “The monitor's mandate is more limited by this agreement; it's restricted to certain countries and certain business lines.” The countries involved were Brazil, China, India and Mexico.

Another surprising aspect, she said, was the agreement makes clear Walmart hired the monitor prior to signing the deal.

It states, “The company retained the monitor prior to the date on which the company's nonprosecution agreement is executed for the purposes of preparing a written work plan, as described below.”

Perkins said, “That's different. Normally a work plan is determined after the monitor studies what should be looked at using a risk-based approach.”

Jay Jorgensen, who until recently was executive vice president and global chief ethics and compliance officer at Walmart, confirmed the company hired former FBI director Louis Freeh as its monitor, and that Freeh began working several months before Jorgensen left the company in December.

Jorgensen, now general counsel and chief compliance officer at the South Korean e-commerce company Coupang, said the in-house lawyers and compliance team showed Freeh how they had built a state-of-the-art compliance program to remediate the problem.

“We didn't just build a compliance program,” Jorgensen said. “We literally mapped out every recommendation that any U.S. or international government agency or expert group has made about compliance programs. And we tried to implement all of them—every best practice, policy and process. It was costly.”

DOJ, however, was not impressed. The agreement states, “Although the company has engaged in significant remedial measures, the fraud section and the [department] have determined that an independent compliance monitor is necessary to ensure that the company's compliance program is operating effectively and adequately tested to ensure that it meets the minimum elements set forth in the corporate compliance program.”

The agreement states the company presented three qualified candidates to federal prosecutors, and the DOJ made the final choice of Freeh.

Under terms of the three-year agreement, Freeh serves for up to two years. His term can be terminated early if all parties agree that his mandate has been met. The DOJ also reserved the right to extend his term another year if his mandate has not been met.

Karen Hewitt, a partner at Jones Day in San Diego, helped negotiate and signed the agreement for Walmart. It was also signed by Gordon Allison, Walmart's chief counsel for finance and corporate governance.

Freeh, a Rutgers Law School graduate, first worked as an FBI agent and then as an assistant U.S. attorney. He served as a U.S. district judge in the Southern District of New York from 1991 to 1993, when he was named FBI director, a position he held until May 2001. He was general counsel to MBNA America Bank from 2001 until it was acquired by Bank of America in 2007.

The following year he founded the global risk management firm Freeh Group International Solutions, headquartered in Wilmington, Delaware, with regional offices in Washington, D.C., New York, Los Angeles and Palm Beach, Florida. He also formed an affiliated law firm, Freeh Sporkin & Sullivan, with two other former federal judges: Eugene Sullivan and Stanley Sporkin.

Read More:

Walmart Agrees to Pay $282M and Hire Louis Freeh as Monitor in FCPA Settlement

Between the Lines: Walmart In-House Lawyers Played Key Roles in Scandal

How Wal-Mart Avoided a Record Fine but Still Paid Dearly

Wal-Mart FCPA Settlement Offers Big Lessons for GCs About Bribery

Wal-Mart Compliance Chief Looking Beyond the Scandals

What Did Wal-Mart's GC Know About Bribery in Mexico?