Fraud Magazine Online
Login |  Become a Member
 
Share |


An interview with Louis Freeh

Tempered ambition



March/April 2014

MarApr-louis-freeh-22Louis Freeh has balanced raising six children with a tenacious ambition that led him to be an FBI special agent, an investigator with the U.S. Attorney’s Office for the Southern District of New York, a district court judge, the director of the FBI and now the chair of Freeh Group International Solutions, LLC. All along the way, he’s concentrated on some core values.

During Louis Freeh’s eight years as the FBI’s director, he received hundreds of awards, plaques and honors. None of them adorned his office walls at FBI headquarters. However, he eventually papered one entire wall next to his desk with drawings and sketches by his six sons. 

“I chose that wall so I could look at them during phone calls or meetings when I needed to keep my focus on reality and what, at the end of any Washington, D.C., day, is really important,” he writes in his 2005 book, “My FBI: Bringing Down the Mafia, Investigating Bill Clinton, and Fighting the War on Terror.”

“I promised myself when I became director that I wouldn’t be one of those D.C. types who would announce — usually when things were going south — that they were leaving government in order to spend more time with their family. I actually spent all the time I needed with them while director,” Freeh wrote.

When Freeh was FBI director, he sent a message to the bureau’s employees about the agency’s Core Values: 

  • Rigorous obedience to the Constitution of the United States.
  • Respect for the dignity of all those we protect.
  • Compassion.
  • Fairness.
  • Uncompromising personal integrity and institutional integrity.
  • Accountability by accepting responsibility for our actions and decisions and the consequences of our actions and decisions.

“We who enforce the law must not merely obey it,” he exhorted his people. “We have an obligation to set a moral example, which those whom we protect can follow.”

Freeh, by example, could have added a seventh core value: Keep all things in perspective. He has blended an impressive law enforcement career with raising a large family, which he’s worked to keep as his first priority. 

Armed with a law degree and later a Master’s in Criminal Law, he was an FBI special agent in the New York City field office and at FBI headquarters. He then worked successively at the U.S. Attorney’s Office for the Southern District of New York as an assistant U.S. attorney, chief of the Organized Crime Unit, deputy U.S. attorney and associate U.S. attorney.

In 1991, President George H.W. Bush appointed him a judge for the U.S. District Court for the Southern District of New York. Two years later, he answered a call from President Bill Clinton, and he became the fifth director of the FBI.

Freeh began his tenure as FBI director at a nexus of technological and international changes. He transferred the bureau from a national law-enforcement agency to a global security institution by doubling the number of branches worldwide.

He’s now chair of Freeh Group International Solutions, LLC, an investigation firm he founded in 2007 and sold to Pepper Hamilton LLP in 2012. In 2013, Freeh was appointed to investigate allegations of potential misconduct over BP settlement management. In 2011, Penn State hired Freeh to conduct a probe into allegations against former football coach Jerry Sandusky. That year he was the bankruptcy trustee overseeing the return of more than $1 billion to creditors of MF Global Holdings. 

He’s a busy man. But he still tries to get home for dinner.

Freeh will be a keynote speaker at the 25th Annual ACFE Global Fraud Conference, June 15-20 in San Antonio, Texas.

Freeh spoke to Fraud Magazine from his office in Wilmington, Del.

FM: How has your upbringing and background shaped the ways you’ve worked and made decisions throughout your career?
LF:
My immigrant family, strong Catholic values, family military service and 25 years of FBI work have guided and motivated me to do the things I was privileged to do.

FM: You earned a law degree but then became an FBI special agent the next year and later an assistant U.S. attorney. Had you first wanted to become an attorney, or did you always intend on working as an investigator?  
LF:
I went to law school in order to try to become an FBI “street agent.”

FM: Why did you want to work for the FBI as a special agent? Why did you accept the FBI director position?
LF:
I sought the FBI agent position to work cases against dangerous people who threatened others. The director’s position I accepted because the president called and asked.

MarApr-louis-freeh-31FM: You were the director of the FBI during tumultuous times: Kohobar Towers, the Unabomber, the Centennial Olympic bombing, Ruby Ridge and Waco investigations, Whitewater, Campcon, Montana Freeman and much more. All of these matters were diverse, but did you have some common-denominator principles and methods to approaching them?
LF:
The same core principles: full and fair investigations and letting the facts determine how they end.

FM: It’s impossible to do justice to such a complicated topic, but could you give a few lessons gained for the FBI from 9/11?
LF:
Governments and nations are usually better prepared to “fight the last war” better than the next. The FBI’s pre-9/11 counterterrorism budget was de minimus — and was only adequately funded after these attacks.

FM: In 2007, you created an investigative group and a law firm. How did that come about?
LF:
When our bank, MBNA America was sold to Bank of America, my family did not want to move back to New York, so I took a consulting engagement by DuPont, which evolved into Freeh Group and Freeh Sporkin Sullivan — now Pepper Hamilton.

FM: Since you left the FBI you’ve tackled some serious investigations such as alleged irregularities in the BP oil-spill claims process and the Penn State – Sandusky sex abuse case. What do you look for in a case before you and your firm accept it?    
LF:
We have to trust our client and have the total authority to act with integrity.


FM: You’ve said that you now crave the nitty-gritty of casework. Has your investigative approach changed much from your FBI and prosecution and days?
LF:
It’s not changed in terms of the core principles statement I had at the FBI and our commitment to fairness and integrity.

FM: Do you still conduct interviews yourself? If so, what are some of your methods?
LF:
Yes, in every major case we do. Get all the facts you can before the interview and conduct it with thoroughness and fairness — using a yellow legal pad, in my case.

FM: A 2013 FORTUNE article said that you embrace the “speedy, on-the-ground approach of an FBI agent.” What does that process mean for you?
LF:
In most cases, there is a great advantage to interviewing subjects and witnesses ASAP and as simultaneous as possible. The theory of preparing weeks to do most interviews can be counterproductive in many ways.

FM: Through the years, how has your understanding of criminal minds evolved — especially those of fraudsters?
LF:
Limitless number of schemes using new technologies and countermeasures, but the frauds still leave a trail of witnesses and evidence that can be found. The fraudster’s greatest liability is the certainty that the fraud is too clever to be detected.

FM: Without giving away too much, what are some things you want to share with the attendees of the 25th Annual ACFE Global Fraud Conference?
LF:
How to use investigative expertise and contemporary techniques to prevent and to detect fraud — with enterprise risk management being the core principle.

FM: Dr. Joseph T. Wells, CFE, CPA, who founded the ACFE more than 25 years ago, has focused on the prevention and deterrence of fraud rather than just examining it after the fact. In your years with the FBI and now as an investigator, how have you seen the importance of this principle?
LF:
Fraud prevention is immeasurably more cost efficient than fraud investigation and prosecution. Moreover, contemporary governance, accounting and corporate fiduciary requirements prioritize prevention and risk management over post-facto discovery and remediation.

FM: Do you include Certified Fraud Examiners on your investigation teams? Or are you familiar with the work and skill sets of CFEs from your time with the FBI? (The FBI employs nearly 500 CFEs.)
LF:
Yes — one of my Freeh Group colleagues, Walt Donaldson, a CFE and one of the best investigators I know, regularly works with me.

FM: What practical advice can you give our members to encourage them as they fight in the trenches?
LF:
Follow your leads, instincts and integrity to do your job fairly and fully — free from improper influences and bias. And let the “chips fall where they may.”  

Dick Carozza, CFE, is editor in chief of Fraud Magazine.

Sidebar 1:

MarApr-louis-freeh-44Freeh is still, in essence, a street investigator with a yellow legal pad

Louis J. Freeh is chair of Freeh Group International Solutions, LLC, a Pepper Hamilton LLP group. He’s also partner and chair of the executive committee of Pepper Hamilton.

He graduated Phi Beta Kappa from Rutgers College in 1971, Rutgers School of Law in 1974 and New York University School of Law in 1984 (L.L.M.). Freeh joined the FBI as a special agent in 1975. He was assigned to the New York City Field Division and later to FBI Headquarters in Washington, D.C. Freeh served as a first lieutenant in the U.S. Army Judge Advocate General Corps.

In 1981, Freeh joined the U.S. Attorney’s Office for the Southern District of New York as an assistant U.S. attorney, later serving as associate and deputy U.S. attorney. In 1991, President George H.W. Bush appointed Freeh as a U.S. district court judge for the Southern District of New York.

In 1993, President Bill Clinton appointed Freeh the fifth director of the FBI. In 2001, Freeh joined MBNA America Bank in Delaware as vice chairman and general counsel.

Freeh is an advisor to Millennium Partners, L.P. and a board member of the US Naval Academy Foundation and the Max Planck Florida Institute. From 2006 to 2013, Freeh was a member of the Bristol-Myers Squibb Company Board of Directors, at which he chaired the governance committee.

Freeh and his wife, Marilyn, have six sons.

Sidebar 2:

FBI tackled intellectual fraud with Economic Espionage Act

 By Louis J. Freeh 

Before the Sept. 11, 2001, attacks on the World Trade Center and Pentagon, the largest single area of responsibility for the bureau was white-collar crime, an all-purpose phrase that covers a multitude of sins. One of the most frustrating of all crimes in that broad category was the one involving trade secrets, frustrating because so much money was at stake and because existing laws were so inadequate to the task. Oftentimes, the cases involved a former employee trying to make off with some corporation’s intellectual property.

We nabbed a onetime contractor for Gillette who had stolen trade secrets related to the development of a new razor, a potential loss to Gillette of hundreds of millions of dollars. But in a surprising number of cases, foreign governments, many of them our putative allies and friends, specifically instructed their intelligence services to go after and secure trade secrets that would give their own companies a decided advantage over American competitors. (Good espionage can drive the research and development budget down to near zero.) Targets included pharmaceutical formulas, enzymes, computing software and applications — billions of dollars of intellectual property in the aggregate, not to mention the loss of jobs from the lost revenues and the forfeiture of American leadership in critical areas of technology.

In all, we identified about 43 nations that were so instructing their security services and, in most cases, using their own U.S. embassies as bases of operation. The People’s Republic of China surprised no one, but some of our closest allies bordered on the shocking.

Just as shocking were the antiquated laws we had at our disposal. For hundreds of years, trade-secret laws belonged to the states. If someone stole the plans for your better spinning wheel or improved mousetrap, you could sue them in state court, or the state could prosecute, but federal entities were almost powerless to intervene. That might have made sense in a pre-global business environment, but in an economy where foreign governments were among the biggest perpetrators, it hamstrung us to no end.

We tried to get around the matter by invoking a variety of federal statutes — mail fraud, wire fraud, and the like — but the fit was sloppy at best. In one case, in Massachusetts, we charged a group of intellectual-property thieves with the transportation of stolen goods in interstate commerce, a crime to be sure and one for which we had jurisdiction, but a stretch all the same. The judge read the statute; looked at our cases; reminded us that the law applied to goods, not ideas; and threw us out of court. Rightly so, I think.

Finally we drafted a new trade-secrets statute at the FBI; we ran it by the Justice Department, which was fine with the idea, and the White House, which didn’t give us much support. We called the bill the Economic Espionage Act and took it to Congress. That’s exactly what it was — spying meant to gain an economic advantage, not a military one — but the State Department was appalled at the name. You can’t call it “espionage,” they screamed; ambassadors all around town will be rushing for their smelling salts. Let’s make it the Economic Security Act instead. But we held our ground, and the statute passed — a landmark federal trade-secrets law that has gone a long way toward protecting American commerce from foreign spies.

Excerpted with permission from “My FBI: Bringing Down the Mafia, Investigating Bill Clinton, Fighting the War on Terror,” © 2005 by Louis J. Freeh with Howard Means, St. Martins’ Griffin – New York.

Read more insight and discuss this article in the ACFE's LinkedIn group



The Association of Certified Fraud Examiners assumes sole copyright of any article published on www.Fraud-Magazine.com or www.ACFE.com. ACFE follows a policy of exclusive publication. Permission of the publisher is required before an article can be copied or reproduced. Requests for reprinting an article in any form must be emailed to FraudMagazine@ACFE.com.




Click here to Login and leave a comment...

Reviews
 
By Michael_Broda

FBI Career Guide
ACFE Watch
2014 Fraud Examiners Manual US Edition
2014 CFE Exam Prep Course US Edition
2014 CFE Exam Prep Toolkit US Edition

 

 

 
©2014 Association of Certified Fraud Examiners
Privacy Policy | Advertise With Us
Association of Certified Fraud Examiners Global Headquarters
716 West Ave | Austin, TX 78701-2727 | USA | FraudMagazine@ACFE.com