Case 1:14-cv-01264-RC Document 83-4 Filed 09/26/17 Page 1 of 20

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

)
100REPORTERS LLC, )

)
Plaintl )
)
V. ) Civil Action No.14-1264(RC)
)
UNITED STATES
DEPARTIENT OF JUSTICE,

Dcfendant.

DECLARATION OF CHARLES E. DUROSS

I, Charles E. Duross, declare pursuant to Title 28, United States Code, Section 1746 as

follows:

L I am a partner with the law firm Morrison & Foerster LLP in Washington, D.C.,

where I am the head of the firm's global anti-comrption practice and am a partner in the

Securities Litigation, Enforcement and White Collar Defense Practice Group. I have represented

numerous corporations and individuals particularly in the field of white-collar crime, including

Foreign Comrpt Practices Act ("FCPA") investigations, FCPA govemment enforcement actions,

anti-corruption compliance counseling, and compliance monitorships. Since Ap/rl2017, I have

been serving as the compliance monitor of a large Brazilian engineering and construction

company pursuant to its resolution of an FCPA case brought by the U.S. Department of Justice

("DOJ"). I submit this declaration in support of DOJ's Renewed Motion for Summary

Judgment.

2. From October 2008 to April 2010, I was an Assistant Chief in the FCpA
Unit in
the Fraud Section of the Criminal Division of the U.S. Department
of Justice. In April 2010, I
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was promoted to Deputy Chief in charge of the FCPA Unit, which meant that I oversaw all of

DOJ's FCPA prosecutions, investigations and resolutions. I continued in that position until

January 2014, when I left DOJ to enter private practice. During my tenure as Deputy Chief, I

supervised about seventeen compliance monitorships in FCPA cases brought by the Fraud

Section, including the case against Siemens AG ("Siemens").

3. I make this declaration based upon my experience in FCPA cases, including cases

with compliance monitors, both as a prosecutor and in private practice; my work in criminal

investigations; my review of documents related to DOJ's investigation and prosecution of

Siemens AG ("Siemens") and related entities, and Siemens' compliance monitorship;

conversations I have had with DOJ attomeys; and my review of court filings and monitorship

documents from the resolution that DOJ entered into with Siemens and related entities.

' 4. In approximately January 2010,I took over supervision of the criminal case

against Siemens and three of its affiliates for violating the FCPA.T By that time, Siemens had

already pleaded guilty and a compliance monitor, Dr. Theo Waigel, had begun his work (the

"Monitor"). I was supervising Joey Lipton, the Trial Attomey who was the Fraud Section's line

prosecutor on the case. Mr. Lipton and I worked closely with Dr. Waigel, Joseph Warin (the

Monitor's "U.S. Counsel"), and our counterparts at the Securities and Exchange Commission

("SEC"), which had entered into a parallel civil settlement with Siemens. I took my

responsibility of overseeing monitorships very seriously, and the Siemens case was the most

important FCPA corporate case in history so it was my top priority. Accordingly, I was a very

i I

f

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hands-on supervisor for this case and took an active role in the Siemens monitorship (the

"Monitorship").

5. There were several important provisions of the Siemens plea agreement that

guided DOJ's approach to and deliberations concerning the Monitorship. Siemens was required

to commit no further crimes and continue to cooperate with DOJ, SEC, and other law

enforcement agencies in ongoing investigations of individual Siemens officials. Siemens was

also required to maintain an ethics and compliance program that was designed to detect and deter

violations of the anti-corruption laws and meet certain minimum requirements, which were listed

in Attachment 1 to the Plea Agreement.

6. Siemens also agreed that Dr. Waigel would serve as compliance Monitor for up to

four years, with a mandate to evaluate the effectiveness of the internal controls, record-keeping

and financial reporting policies and procedures as they related to Siemens compliance with the

FCPA and other applicable anti-comrption laws, and report to DOJ about those issues. Siemens

was obligated to cooperate with the Monitor, which included, among other things, giving him

access to its relevant information, records, and employees. The Monitor's duties and

responsibilities were spelled out in Attachment 2 to the Plea Agreement (the "Mandate").

THE DELIBERATIVE PROCESSES THAT OCCURRED

DURING THE MONITORSHIP

7. Broadly speaking, DOJ had two types of deliberative processes during the

Monitorship. The first type of deliberative process concerned Siemens. That process involved

assessments of Siemens' efforts to comply with its obligations contained in the plea agreement.

Although that evaluation was ongoing throughout the entire 4-year period of the Monitorship,
it
was punctuated at specific points each year, at the time DOJ evaluated the
Monitor,s yearly
report and surrounding presentations and records. The standards that guided
this deliberative
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process included: (a) whether Siemens committed any further crimes; (b) whether Siemens

continued to assist in DOJ's ongoing investigations of Siemens officers and employees; (c)

whether Siemens cooperated with the Monitor by making its records, facilities, and personnel

available to the Monitor; and (d) whether Siemens' compliance program and internal controls

met the minimum requirements set forth in Attachment 1 to the Plea Agreement.

8. In making these assessments about Siemens, we considered a variety of criteria,

such as: (a) whether the company was taking its obligations under the Monitorship seriously; (b)

whether the company was deploying appropriate resources to work with the Monitor; (c) whether

the company was enhancing its compliance program and internal controls in a manner tailored to

address past violations; and (d) whether the company's compliance program addressed all of the

components delineated in Attachment 1 to the Plea Agreement, including increasing visible and

explicit executive support for compliance, improving policies and procedures, enhancing

training, bolstering resources and oversight, implementing stronger internal controls,

strengthening third-party due diligence, and establishing robust processes for reporting issues

and properly investigating them.

9. The second type of deliberative process concerned the Monitor. That process

involved evaluations of the Monitor's performance in executing the Mandate. Although those

evaluations were ongoing throughout the entire 4-year period of the Monitorship, they were

punctuated during the year by certain interactions with the Monitor and his U.S. Counsel: (a)

meetings and discussions with the Monitor regarding the Monitor's draft work plans, including

reviewing the draft work plans, discussing them intemally, conferring with SEC counterparts

about them, receiving presentations from the Monitor and his U.S. Counsel about the draft work

plans, and robust discussions among the Monitor, his U.S. Counsel, and SEC counterparts about

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those same draft work plans; and (b) meetings and discussions with the Monitor and his U.S.

Counsel regarding the Monitor's annual reports, including reviewing the reports, discussing them

internally, conferring with SEC counterparts about them, receiving presentations from the

Monitor and his U.S. counsel about the annual reports, and robust discussions among the

Monitor, his U.S. Counsel, and SEC counterparts about those same annual reports and the

findings contained therein.

10. During the interactions described above, we made certain assessments and

evaluations based upon various criteria, such as: (a) whether the Monitor's work plans provided

an appropriately detailed roadmap conceming the review the Monitor intended to perform, which

would provide notice to the company and set expectations for all parties; (b) whether the

Monitor's work plans and reports were appropriately tailored to the past improper conduct by the

company, as evidenced by the facts to which Siemens had admitted in its plea agreement, and

specific to the nature of the company's business and comrption risk profile; (c) whether the

Monitor was focused on the right compliance and internal control issues; (d) various other

factors relating to the Monitor's approach towards the Monitorship, his use of available

resources, and the evolution ofhis approach year-by-year; and (e) whether, overall, the

Monitor's work plans and annual reports enabled the Monitor - and by extension DOJ and SEC

- to evaluate the effectiveness of Siemens' internal controls, record-keeping and financial

reporting policies and procedures as they related to the company's compliance with anti-

com.rption laws.

I 1. Besides being continuous, the deliberative processes described above were also

cumulative. For example, when DOJ evaluated Siemens' efforts to comply with its plea

agreement towards the end of the second year of the Monitorship, DOJ considered not only the

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Monitor's Year Two Report and related records, but also other information and records

generated before then, including the Year One Report and related records. DOJ did likewise

with respect to its evaluations of Siemens' compliance efforts during the third and fourth years of

the Monitorship, i.e.,DOJ considered all the relevant information and records created up to then.

DOJ did the same when it was considering whether to notiff the Court that Siemens had satisfied

its obligations under the plea agreement with respect to its obligations near the end of the fourth

year. DOJ considered all the relevant information and documents that were generated during the

entire course of the Monitorship in making its ultimate decision to notifu the Court of Siemens'

compliance. Thus, as a result of the cumulative nature of DOJ's deliberative process, DOJ

viewed each of the Monitor's Annual Reports and related records, which summarized the

activities of prior years as well as the current year, as status reports on the progress that Siemens

was making towards complying with the plea agreement.

12. Similarly, the deliberative process involved in DOJ's evaluation of the Monitor's

performance was also cumulative. Thus, for example, when DOJ set out to evaluate the

effectiveness of the Monitor's performance of his Mandate during the second year of the

Monitorship, DOJ considered not only the Monitor's Year Two Work Plan, the Monitor's Year

Two Report, and related records, but also other information and records generated before then,

including the work plan, annual report, and related records for the first year of the Monitorship.

DOJ did likewise with respect to its evaluations of the effectiveness Monitor's performance

efforts during the third and fourth years of the Monitorship, i.., it considered all the relevant

information and records created up to then. Thus, as a result of the cumulative nature of DOJ,s

deliberative process, DOJ viewed each of the Monitor's Work Plans, Annual Reports, and related

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records, which summarized the activities of prior years as well as the current year, as status

reports on the Monitor's performance of his Mandate.

13. By the time I took over the Siemens matter for DOJ, the Monitor had finished

his First Year Review and was formulating his Year Two Work Plan. In the hrst year, the

Monitor had acquired a broad understanding of Siemens' operations, the comrption risks it

faced, and the operation of its global anti-comrption program. During the first year, DOJ

assessed whether the Monitor was effectively carrying out his Mandate as described in the plea

agreement and whether Siemens' efforts to date to comply with the pertinent terms of its plea

agreement were adequate.

YEAR TWO WORK PLAN AND RELATED RECORDS

14. On February 8, 2010, I received a copy of the Monitor's Year Two Work Plan. I

reviewed the Work Plan with Mr. Lipton. As the Year Two Work Plan required, the Monitor

was planning to perforn a more in-depth analysis of Siemens' anti-comrption compliance

program by conducting a project- and contract-based review of Siemens' business practices and

its efforts to implement all of the recommendations from the Monitor's Year One Report. Unlike

the First Year Review, which was broad based, the Year Two Review was more focused and

targeted specific issues identified in the Year One Review. The Year Two Work Plan reflected

the Monitor's opinions, recommendations, and deliberations concerning what steps he should

take during the second year of the Monitorship to enable him to fulfill his Mandate.
15. In general, in evaluating the Year Two Work Plan and discussing it with my

colleagues, in addition to the criteria listed above in paragraph 9, I wanted to know whether the

Work Plan would: (a) enable the Monitor to effectively carry out his Mandate as described in the

plea agreement and inform DOJ concerning how the Monitor was planning to proceed; (b)

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adequately inform Siemens concerning what was expected of it during the coming year; and (c)

enable DOJ to assess the adequacy of Siemens' efforts to date to comply with the pertinent terms

of its plea agreement. More specifically, I wanted to know how the Monitor's Year Two Review

would differ from the Year One Review, so as to avoid duplicating his earlier efforts. Also,

given that Siemens had agreed to implement all of the Monitor's recommendations from the

preceding year,I wanted to know how it would be determined that the company was doing so.

Additionally, given the breadth of the unlawful conduct to which Siemens had admitted, I

wanted to know about the countries the Monitor was planning to focus on during his Year Two

Review. DOJ, the Monitor, and the SEC engaged in a dialogue about these issues as part of
DOJ's assessment of the Year Two Work Plan.

16. An example of that dialogue was a meeting on February 23,2010, where Mr.

Mendelsohn, Mr. Lipton, SEC attorneys and I, attended a Monitorship presentation concerning

the Year Two Work Plan. Mr. Warin made a PowerPoint presentation summarizing the essential

parts of the work plan, and there was a broad and free-flowing discussion about the work plan

and how the Monitorship was progressing. (DOJ_0000384-0000418.) The discussion covered,

among other things, the issues described in the preceding paragraph. Mr. Warin was asked

questions conceming several subjects, including a particular Siemens compliance procedure and

the Monitor's choices regarding country visits.

17. In response to questions posed during the February 23,2010, meeting, on March

24,2010,I received a follow-up letter from Mr. Warin addressed to Mr. Lipton, Mr.

Mendelsohn, SEC attorneys, and me. (DOJ_005248-5250.) The letter addressed each of these

questions, and enclosed a copy of Siemens' employee training program for using its business

partner compliance tool (DOJ-0000325-83), an excerpt of the Monitor's report for the
first year

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of the monitorship (DOJ_005251-0055), and the Monitor's Year Two Work Plan

(DOJ_000029 4-0000324).

18. After taking part in the February 23,2010, meeting, reviewing Mr. Warin's

March 24,2010,letter and enclosures, and discussing the matter with Mr. Lipton, Mr. Warin,

and SEC staff, I was satisfied that Mr. Warin had adequately addressed the concerns we had

raised at the February 23,2010, meeting, that the Year Two Work Plan was appropriate to carry

out the terms of the plea agreement, that the Monitor's Year Two Review should proceed, and

that the Monitor was appropriately discharging his Mandate. These conclusions were the

product of a consultative process between DOJ, the Monitor, and SEC, and the conclusions and

the underlying records and information served as a basis for DOJ's continuing evaluation of the

Monitor's performance as the Monitorship proceeded.

YEAR TWO REPORT AND RELATED RECORDS

19. The Monitor's Year Two Review was scheduled to be completed and the Year

Two Report issued by October 1,2010. However, on July 14,2010,I received a letter from Mr.

Warin addressed to Mr. Lipton, SEC attorneys, and me requesting a short extension of the

deadline to submit the Year Two Report. (DOJ_0005248-00050.) Mr. Warin's letter explained

why he believed that the request was necessary. I reviewed the letter and conferred with Mr.

Lipton. Siemens was fully cooperating with the Monitor, and the Monitor's report was likely

going to be lengthy. I decided that Mr. Warin's request was reasonable, and Mr. Warin was

informed that DOJ agreed to his request.

20. On October 13,2010, the Monitor issued his Year Two Report. (DOJ_0000419-

000937; DOJ-0004749-0005215 (exhibits).) I reviewed the report, including the exhibits as

necessary. The Monitor summarized the activities of the Monitorship over the past year as well

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as the preceding one. The Monitor made another 29 recommendations for enhancing Siemens'

compliance efforts. The Year Two Report reflected the Monitor's opinions, recommendations,

and deliberations conceming what Siemens had already accomplished by that time and what

additional steps the company needed to take to comply with the pertinent terms of its plea

agreement. The Monitor certified that Siemens' compliance plan was reasonably designed and

implemented to detect and prevent future violations anti-comrption laws.

21. Following the issuance of the Year Two Report, the Monitor invited DOJ and the

SEC to a meeting in Munich, Germany, with various Siemens officials concerning the status of

the Monitorship and the Year Two Report. I received a copy of a proposed agenda from Mr.

Warin on or about November 5, 2010. (DOJ _0005265-00066.) I had to weigh the costs and the

benefits of sending Mr. Lipton to Munich. After consulting with my colleagues at SEC, I

concluded that it was appropriate. I asked Mr. Lipton to ensure that the agenda was properly

focused and substantive. On or about November 8, 2010, Mr. Lipton advised Mr. Warin that the

proposed agenda was acceptable to DOJ. (DOJ

-0005267.)
22. The Munich meeting was held on December 9, 2010. Mr. Lipton and attorneys

from the SEC attended Monitor presentations about the Monitor's assessment of how the

Monitorship was progressing and the findings and recommendations in the Year Two Report.

Siemens managers also made presentations concerning the company's financial control

procedures, finance audit group, and compliance group.

23. After Mr. Lipton returned to the office from Munich, he and I talked about how

the meetings had gone. Mr. Lipton stated that they had gone well and that Siemens was making

good progress. I asked him to get me copies of the PowerPoint presentations from the meetings.

On or about December 15,2010,I received the materials. (DOJ_0000940-001017;

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DOJ_0001018-00040; DOJ_0001041-00061; and DOJ_0001062-000106.) I found the

presentations to be very impressive and that Siemens had made great strides, with the aid of the

Monitor's recommendations and U.S. Counsel's hard work, in building an effective anti-

comrption compliance program. I discussed the matter with Mr. Lipton, and he had the same

opinion.

24. Throughout this process, DOJ evaluated whether the Monitor was effectively

carrying out his Mandate and, together with the Monitor, whether Siemens' efforts to date to

comply with its plea agreement were adequate.2 After deliberating, among other things, upon all

the information and records I had received to date, including the Monitor's work plans for Years

One and Two, the Monitor's Reports for Years One and Two, the associated materials, the

Monitor's certification concerning the effectiveness of Siemens'compliance program, the

presentation materials from the December 9,2010, meeting, and my conversations with Mr.

Lipton, Mr. Warin, and SEC staff, I concluded that Siemens was making significant progress

towards complying with its plea agreement and that the Monitor was carrying out his Mandate

effectively. These conclusions were the product of a consultative process between DOJ, the

Monitor, and SEC, and the conclusions and the underlying records and information served as a

basis for DOJ's continuing evaluation of the performance of the Monitor and Siemens as the

Monitorship proceeded.

2
By contrast, there were other monitorships that required intervention. For example, we had
situations where we had to direct the monitor to do more work, or we had to criticize a monitor
for going beyond his mandate, or we had to mediate disputes between a company and a monitor.
We did not need to do that in the Siemens case because the company and the Monitor were able
to work together effectively. But to be clear, however, the lack of intervention was not the result
a lack of oversight or critical assessment. Rather, it was the result of hard work by the company
and the Monitor to work together effectively.
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25. As stated above, in his Year Two Report, the Monitor certified that Siemens' anti-

comrption compliance program was effective. This certification was particularly important to

DOJ because the certification represented the considered opinion of an expert on the subject of

corporate compliance, and, as in other cases involving compliance monitorships, the Monitor

was staking his considerable reputation on this judgment. Had the Monitor declined to make this

certification, DOJ would have had to consider appropriate remedial action, including raising the

issue with Siemens, requesting the assistance of the Court, and possibly seeking to breach the

plea agreement and reinstate the prosecution.

YEAR THREE WORK PLAN AND RELATED RECORDS

26. On February 8,2011, Mr. Warin sent a copy of the Monitor's Year Three Work

Plan (DOJ_0002053-00099), together with the Monitor's Year One and Year Two Work Plans,

to myself, Mr. Lipton, and several SEC attorneys. I reviewed these materials. Consistent with

DOJ's views, the Monitor was planning to build on the knowledge acquired during the Year One

and Year Two Reviews to evaluate the long-term sustainability of Siemens' compliance

programs, assess the company's risk-based compliance processes, and evaluate the company's

implementation of the Monitor's recommendations from Years One and Two. The Year Three

Work Plan explained how the Monitor planned to accomplish these goals. The Year Three Work

Plan reflected the Monitor's considered opinions, recommendations, and deliberations

concerning what steps he should take during the third year of the Monitorship to enable him to

fulfill his Mandate.

27. On February 17,2011, I, together with Mr. Lipton and several SEC attorneys,

attended a Monitor presentation of the Year Three Work Plan. As before, there was a robust

discussion about the Work Plan and how the Monitorship was proceeding. Consistent with the

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criteria set forth in Attachments I andZ to the plea agreement, we asked questions about how the

Monitor planned to effectuate the emphasis on sustainability, the implementation of the Year

One and Year Two recommendations, and the countries selected for site visits. We asked how

the Monitor planned to ensure that Siemens' compliance improvements would take root so that

the company would not revert to its past practices after the Monitorship ended. The Monitor had

shaped the Year Three Work Plan to accommodate certain concerns we had expressed in

connection with the Year Two Review.

28. After considering all the information and records I had received to date, including

the Year Three Work Plan, the information from the February 17,2011, meeting, and discussions

with Mr. Lipton, Mr. Warin, and SEC staff, I concluded that the Monitor was appropriately

carrying out his Mandate, that the Year Three Work Plan was appropriate, and that the Year

Three Review should proceed. These conclusions were the product of a consultative process

between DOJ, the Monitor, and SEC, and the conclusions and the underlying records and

information served as a basis for DOJ's continuing evaluation of the Monitor's performance as

the Monitorship proceeded.

29. On May 10,2011, I received a letter from Mr. Warin addressed to Mr. Lipton,

SEC attorneys, and me, advising that the Monitor was going to modify the Year Three Work

Plan with respect to a certain country to his review. (DOJ_00052S3.) I read the letter and

decided that the modification was reasonable.

30. On May 26,2011, pursuant to our request, I received a letter from Mr. Warin

addressed to myself, Mr. Lipton, and several SEC attorneys enclosing audit testing protocols that

the Monitor was using during his Year Three Review to help evaluate Siemens' implementation

of the Monitor's recommendations and the effectiveness of the company's internal controls.

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(DOJ_005285-86; DOJ_0003188-340.) I reviewed these materials. The protocols covered many

of the compliance program elements described in Attachment2 to the plea agreement.

YEAR THREE REPORT AND RELATED RECORDS

31. On or about October 7,2011, the Monitor issued his Year Three Report.

(DOJ_0002606-3187; DOJ_0002100-000605 (exhibits).) I reviewed the report and referred to

the exhibits as necessary. The Monitor summarized the activities of the Monitorship over the

past year as well as the preceding ones. The Monitor made another nine recommendations for

improving Siemens' compliance effons. The Monitor certified that Siemens' compliance plan

was reasonably designed and implemented to detect and prevent violations within Siemens of the

anti-comrption laws. The Year Three Report reflected the Monitor's considered opinions,

recommendations, and deliberations concerning what Siemens had already accomplished by that

time and what additional steps the company needed to take to implement an effective compliance

program.

32. On or about November 7,2011, I, together Mr. Lipton and several SEC attorneys,

attended a Monitor presentation concerning the Year Three Report. There was a robust

discussion concerning the status of the Monitorship and Siemens' progress. It appeared that the

company's compliance improvements were becoming sustainable. We relied on the Monitor's

certification conceming the adequacy of Siemens' compliance program as part of the

government's on-going assessments whether Siemens was taking all the required steps to comply

with its obligations under the plea agreement.

33. During the third year of the Monitorship, DOJ evaluated whether the Monitor was

effectively carrying out his Mandate and, together with the Monitor, whether Siemens' efforts to

date to comply with its plea agreement were adequate. After considering all of the information

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and records I had received to date, including the Monitor's three work plans, his three reports,

the related records, the audit testing protocols received on May 26,2011, the November 7 , 2011

meeting, and my conversations with Mr. Lipton, Mr. Warin, and SEC staff, I concluded that

Siemens was making significant progress towards complying with its plea agreement, and that

the Monitor was carrying out his Mandate effectively. These conclusions were the product of a

consultative process between DOJ, the Monitor, and SEC, and the conclusions and the

underlying records and information served as a basis for DOJ's continuing evaluation of the

performance of the Monitor and Siemens as the Monitorship proceeded.

YEAR FOUR WORI( PLAN

34. In about mid-November 2011, I learned that Siemens had proposed that the

Monitorship should continue for a fourth year. I discussed the proposal with Mr. Lipton and Mr.

Warin, including the appropriateness of fourth year, its value to the company, and its benefits to

the government. I agreed to the proposal, so that Siemens could continue its efforts to improve

its compliance program.

35. On December 19, 2011, Mr. Warin sent copies of the Monitor's Year Four Work

Plan to Mr. Lipton, SEC attomeys, and me. (DOJ_0003898-000915.) I read the work plan.

Consistent with DOJ's view, the Monitor was planning to continue to focus on the long-term

sustainability of Siemens'compliance program and assess the Company's efforts to ensure an

efficient transition to maintaining an effective compliance program after the completion of the

Monitorship. The Work Plan explained how the Monitor planned to accomplish these goals.

The Year Four Work Plan reflected the Monitor's considered opinions, recommendations, and

deliberations conceming what steps he should take during the fourth year of the Monitorship to

enable him to fulfill his Mandate.

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36. After considering all the information and records I had received to date, including

the Year Four Work Plan and discussions with Mr. Lipton, Mr. Warin, and SEC staff, I

concluded that the Year Four Work Plan was appropriate, that the Year Four Review should

proceed, and the Monitor was appropriately carrying out his Mandate. These conclusions were

the product of a consultative process between DOJ, the Monitor, and SEC, and the conclusions

and the underlying records and information served as a basis for DOJ's continuing evaluation of
the Monitor's performance.

37. On June 6,2012,I received a letter from Mr. Warin addressed to Mr. Lipton, SEC

attorneys, and me, providing an update on the Monitor's Year Four Review. (DOJ_0003894-

00097.) This letter confirmed for me that the Monitor was effectively implementing the Year

Four Work Plan and his Mandate.

38. On July 3I,2012,I received a letter from Mr. Warin addressed to Mr. Lipton,

SEC attorneys, and me providing another update on the Monitor's Year Four Review.

(DOJ_0003890-0093.) This letter, like the June 6, 2012,letter, confirmed for me that the

Monitor was effectively implementing the Year Four Work Plan and his Mandate.

YEAR FOUR REPORT AND RELATED RECORDS

39. On or about October 12,2012, the Monitor issued his Year Four Report.

(DOJ_0003395-00884; DOJ_0003916-004067 (exhibits).) I reviewed the report and referred to

the exhibits as necessary. The Monitor summarized the activities of the Monitorship over the

past year as well as the preceding ones. As in the preceding years, the Monitor certified that

Siemens' compliance plan was reasonably designed and implemented to detect and prevent

violations within Siemens of the anti-comrption laws. The Year Four Report reflected the

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Monitor's considered opinion, recommendations and deliberations concerning what steps

Siemens had accomplished by that time.

40. On or about October 22,2012,I, together with Mr. Lipton and several SEC

attorneys, attended a Monitor presentation concerning the Year Four Report. There was a robust

discussion concerning the status of the monitorship and the Year Four Report, including certain

Siemens business practices in a particular country and the timing of the conclusion of the

Monitorship.

41. On or about November 1,2012,I received a letter from Mr. Warin addressed Mr.

Lipton, SEC attorneys, and me, which addressed the questions raised in the October 12,2012

letter. After taking part in the October 22,2012, meeting, reviewing the November 1, 2012,

letter, and talking to Mr. Lipton and Mr. Warin, I concluded that Mr. Warin had adequately

addressed the concerns raised at the October 22 meeting.

42. During the Fourth Year of the Monitorship, DOJ assessed whether the Monitor

was effectively carrying out his Mandate and, together with the Monitor, whether Siemens'

efforts to date to comply with its plea agreement were adequate. Based upon all the information

I had received to that date, including the Monitor's Year Four Work Plan, Mr. Warin's letters of

October 22,2012, and November 1, 2012, the Year Four Report, and my conversations with Mr.

Lipton, Mr. Warin, and SEC staff, I concluded that, during the fourth year of the Monitorship,

Siemens had made significant progress towards complying with its plea agreement, and that the

Monitor was carrying out his Mandate effectively.

43. In or about late November or early December 2012, I concluded that, with respect

to the entire 4-year term of the Monitorship, Siemens had satisfied the terms of its plea

agreement with respect to the Monitorship. I based that decision on all the information I had

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received to that date, including: the Monitor's written work product and oral presentations

described above; Siemens' efforts to develop and implement an effective anti-corruption

compliance programs and its implementation of all 152 of the Monitor's recommendations; and

my discussions with Mr. Lipton, Mr. Warin, the Monitor, and SEC staff attorneys. These

conclusions were the product of a consultative process between DOJ, the Monitor, and SEC, and

the conclusions and underlying records and information served as a basis for DOJ's continuing

evaluation of the performance of the Monitor and Siemens over the course of the Monitorship,

and DOJ's ultimate conclusion about Siemens' compliance with its plea agreement.

THE CONCLUSION OF THE MONITORSHIP

44. DOJ and SEC then consulted regarding the conclusion of the Monitorship, end we

agreed that the Monitorship would end on December 15,2012. (DOJ_005343-0044.) SEC

advised that Siemens had complied with the terms of its civil settlement with SEC, and

authorized DOJ to say so in a notice to the Court. (DOJ_005343.) Mr. Lipton drafted a notice,

which I approved.

45. On December 18, 2012, DOJ filed a Notice advising the Court that Siemens had

satisfied its obligations under the plea agreement with respect to the Monitor. (See Case No. 08-

cr-00367-RJL, dkt. entry 21.) The Notice recited the basis for DOJ's assessment, including the

Monitor's extensive reviews for each of the four years of the Monitorship, the Monitor's

certification that Siemens had fully implemented each of the Monitor's 152 recommendations,

the Monitor's annual meetings with DOJ and SEC to review the findings and recommendations

in the Monitor's annual reports, and the Monitor's certifications at the end of years two through

four of the Monitorship that Siemens' anti-comrption compliance program was effective. (See

id.,fln741.)

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EXPECTATION OF CONFIDENTIALITY AND HARM TO

MONITORSHIPS FROM DISCLOSURE

46. I understood and expected that the records and information that the Monitor

provided DOJ and SEC during the Monitorship would remain confidential. There were

important practical reasons for this practice. In my experience as a DOJ manager overseeing

corporate monitorships, DOJ needed to ensure that the information it received from monitored

companies and monitors was accurate, detailed, and comprehensive. This meant that companies

and their respective employees needed to feel confident that they could share sensitive

commercial, financial, accounting, auditing, IT system, marketing, research and development,

business tools and practices, and compliance information in detail with the Monitor without fear

that it would be disclosed to competitors or others that would use that information to their own

advantage or, even worse, the disadvantage of the company. Moreover, companies would be

circumspect in providing fulsome information about control failures, near misses, or or even

necessary remedial steps for fear it would be taken out of context or misused by competitors. It

was clear to me that this information, which was provided during countless interviews, through

voluminous documents, and in myriad presentations, would be substantially restricted if the

companies and their employees believed that such information would be subject to public

disclosure. As such, if such information is subject to public disclosure, then the extent and

quality of the information that monitors receive from companies-and thus provide to DOJ

during the course of the monitorship--will almost certainly be negatively impacted. If the

monitorship process is to continue to succeed, companies and monitors must be able to

communicate openly and honestly without fear that the information they exchange will end up in

the public domain.

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47. My experience in private practice, including as a current monitor in an FCPA

matter, confirms my opinions on this subject. If the records and information that monitors

provide to DOJ and SEC during compliance monitorships are not treated confidentially, the flow

of information between monitors and the govemment will be stifled. This will happen for two

independent reasons. First, as described above, the company will understandably be less

fulsome in its exchanges with the monitor, which means less information will be available to

flow from the monitor to DOJ and SEC. Second, the monitor will likewise be more circumspect

in what the monitor shares with DOJ and SEC. Indeed, even the process for sharing such

information will become more cumbersome, likely with less written exchanges and those that are

provided will be less detailed. In the end, this will impede the flow of information to DOJ and

SEC, will reduce the candid discussions among the monitor, the company, and DOJ and SEC

about the progress (or not) of the company in improving its compliance program and intemal

controls, and will negatively impact the efficacy of monitorships, which are designed to achieve

an incredibly important policy goal: preventing corporate criminal recidivism. Put simply,

treating a monitor's work plans, reports, and other materials as non-confidential will seriously

harm the monitorship process.

I declare under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct.

Executed on this ) q day of September ,2017 .

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