1. Anna Drummond, University of Vermont Michael Vernick, Hogan Lovells, US LLP Jim Ward, Georgetown University Creating an Effective Compliance Response: Government Inquiries and Internal Investigations

2. Agenda Overview, General Principles and Questions – Jim The Role of Counsel – Mike UVM’s Government Contacts Protocol – Anna Fact Pattern Exercise

3. Overview, Some Basic Principles, Some Important Questions

4. Trends: More Interactions With Government Bad Economy and Limited Budgets – Buzzwords: “Accountability” and “Transparency.” – Impression that students don’t get a return on their investment (high cost/bad job market). Higher Education’s Expanding Portfolio – E.g., Distance Ed., Continuing Ed., International Programs Government’s Expanding Portfolio – E.g., College costs, Student safety, Export controls, Conflicts of Interest

5. How Can Institutions Monitor Government Interactions and Maintain (some) Control? Every situation is different – Lots of questions to consider and many factors involved in deciding strategy and tactics for interacting with government. But, some general principles apply.

6. The Basics: Government Interaction for Dummies Routine is Better than Extraordinary – Don’t escalate unless you have to. Remember the Human Touch – Be polite and avoid adversarial stances whenever possible. – See government people as people. – Avoid “why are you persecuting us” approach.

7. Basics (cont.) Do the work for the government – Volunteer an internal investigation. Respond with an explanation and a plan – Show the government what you do well, explain problems, and provide a plan for fixing them. Follow through

8. Questions to Ask Yourself What are our (multiple) goals? – Speed of resolution, lack of publicity, avoiding sanctions or penalties, limiting scope, etc. What agency, what level? – Who should be the institution’s lead communicator? What other issues are floating around? – Watch out for what you don’t know.

9. Questions to Ask (cont.) Is this “routine” or “unusual”? – How routine or unusual? Do we have a routine contact with this agency/office? – How effective is this channel and do we trust it as a way of resolving this situation? How have others handled this situation? – Learn from others, but also understand what standards others have set.

10. Role of Counsel

11. Government inquiries take many different forms: – From day-to-day operational inquiries to formal investigations Different types of interaction with the Government carry with them different risk profiles – The challenge is to: Ensure that counsel is involved when appropriate but Avoid inhibiting the institution’s ability to operate efficiently

12. Factors to Consider Specialized knowledge/experience Fact-finding skills Sensitivity to more significant problems Distance/objectivity Attorney-client privilege Business/policy issues

13. Practical Considerations Involvement of counsel can take many different forms – Serving as the “face” of the institution – Remaining in the background – Everything in between

14. UVM’s Government Contacts Protocol

15. Government Reviews Procedure Other highly regulated industries – developed compliance programs where compliance takes lead role in responding to government reviews Surprise!—This is less common in higher ed Purposes – timely, consistent, deliberative response to government reviews – internal tracking mechanism, BOT reporting, trend spotting, etc.

16. Government Reviews Intentionally broad definition for what is a “review” – Cast broad net to allow decision-making ability (i.e. more or less involvement). – Some things that don’t seem like a review really are--many agencies won’t tell you the real reason. Articulate how the process works in your procedure and preserve your ability to be involved.

17. Process Involve the right people, operationally and ensure they understand the importance Inform responsible official(s); consider any conflicts of interest issues Work with in-house counsel; involve outside counsel if needed, framing issue narrowly. Triage team created Work begins

18. Develop a Plan Timely response – not everyone knows what this is. Review Production Request. – what is impossible, what is obtainable with time, and what can be readily provided? – develop plan for response, request reasonable extension for what will take longer and propose dates for production (i.e. staggered production). Ask for clarification if you need it.

19. Don’ts DO NOT: Avoid, delay or keep things at too low a level. – Make sure people are aware of the issues and the need for timely response. Provide what is not requested. – Provide what is asked for as quickly as you can. Waste too much time trying to influence the regulator through your education of them. – i.e. “if only they understood higher ed.” – Many regulators don’t care about higher ed’s “special status.”

20. Negotiation Understand what you can get Develop your strategy to get it Take control of the pencil, if you can. (This may be more doable at the state level). Once this turns to litigation, compliance takes the back seat to legal counsel

21. Reporting to the Board As reviews are going on and as they proceed compliance needs to understand probability and impact in terms of risk. This should be reported to the Board as ongoing and upon completion.

22. Debrief Always debrief with your triage team to develop lessons learned Evaluate, from a compliance perspective, what changes to make moving forward Track trends and report to responsible officials and BOT

23. Questions? Jim Ward (jew6@georgetown.edu)jew6@georgetown.edu Anna Drummond (atdrummo@uvm.edu)atdrummo@uvm.edu Mike Vernick (michael.vernick@hoganlovells.com)michael.vernick@hoganlovells.com