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Corporate Governance

: The Race to the Bottom

Monica Goodling and Corporate Governance

By J. Robert Brown

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By now, most are familiar with the report issued by the Justice Department on July 28, 2008 concerning the use of political criteria in hiring civil service level employees in the Justice Department. The report placed Monica Goodling at the center of the investigation, a 1999 graduate of Regent Law School. We offer no comment about the particular allegations or the use of improper factors in selecting staff, a subject well beyond the general scope of this Blog. Nonetheless, there are a few items that nonetheless might be of interest to those reading this Blog.

First, much of the evidence suggesting that administration personnel made improper use of political and other factors in hiring decisions came from emails. This is increasingly a factor in securities litigation as well. It is a stark reminder that those writing emails need to apply the New York Times test, that they do not include anything that they wouldn't want on the front page of the New York times.

Second, additional evidence came from Lexis-Nexis. One of the officials involved (not Monica Goodling) was asked about the use of Internet and Lexis-Nexis searches on various candidates. When shown a search string, the witness, according to the report, testified that she did not recall ever actually running the search. As the report noted:

Williams?s testimony concerning the Nexis search string she provided to Goodling was also inaccurate. As detailed above, at our interview we showed Williams a copy of the e-mail she sent to Goodling on April 10, 2006, in which Williams provided the Internet search string detailed above. In the text accompanying this search string Williams wrote: ?This is the lexis nexis search string that I use for AG appointments.? After reviewing the e-mail, Williams told us that she did not recognize the search string and did not remember sending it to Goodling. She stated that she did not know what she meant when she wrote ?AG appointments,? but asserted that it did not include IJs. At the end of the interview, we asked her to review the document again. She reaffirmed that she did not remember ever using the search string on any candidate. In an e-mail Williams sent the day after the interview, she claimed that she used the search on one candidate for a political position in the Environment and Natural Resources Division (ENRD) and that she deleted from the search ?words that I thought were not appropriate . . . taking [out] words like homosexual, religious, and similar social and/or personal ?buzz words.??

The task force, however, received information from Lexis-Nexis that apparently contradicted the representations. The evidence indicated that the "buzz words" were not deleted and that the search was in fact run numerous times. As the report noted:

Williams?s explanation is not accurate in several respects. Her claim that she deleted ?buzz words? from the single search she acknowledged conducting is contradicted by evidence we received from LexisNexis. That evidence shows that Williams conducted 24 additional searches using the search string, and each time the search included terms such as ?homosexual? or the other ?buzz words? identified by Williams. (emphasis added)

In other words, searches made on Lexis-Nexis were retrievable and apparently some time after they were made. The report does not appear to have data about Internet searches. Nonetheless, it is another example of electronic information that one might think disappears with use but in fact is retrievable. Another thing to keep in mind when discussing those important corporate governance issues.

Full post as published by The Race to the Bottom on August 09, 2008 (boomark / email).