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The elevator pitch for James Doty goes like this: He directed the internal investigation into accounting failures that had led the Federal Home Loan Mortgage Corp. to understate its earnings by billions. Doty’s report on Freddie Mac was released in 2003, making it one of the comparatively rare instances in which a lawyer’s corporate governance inquiry didn’t go unsung. “Freddie Mac was easy to deal with in the aftermath,” recalls Doty, a partner in the D.C. office of Baker Botts. “Our report was public — we even went to Congress to testify on it. It’s more difficult when you’re dealing with private clients. You don’t want to appear to clients to be trumpeting their problems, though frequently the work you are doing would be useful to lawyers practicing in the same area of law.” Since the Freddie Mac case, Doty, 67, has been busy. Last summer, the board of WellCare Health Plans Inc., a major Medicare/Medicaid provider based in Tampa, Fla., retained Doty to lead an independent committee that is helping the company undergo what he calls a “process of oversight, remediation, and restructuring the management team.” The committee is looking into issues related to ongoing inquiries from several federal and state agencies. According to a Wall Street Journal report in November, the agencies are investigating allegations that WellCare inflated its mental-health care expenses to retain money that should have been refunded to Florida’s Medicaid program. Doty’s work on another matter is further along. Last April, the SEC and the Justice Department announced a record-setting $44 million settlement with Houston-based oilfield services company Baker Hughes Inc. over Foreign Corrupt Practices Act violations — an outcome that could have been considerably more draconian had the company not come clean and cooperated fully with investigators. Five years ago, when the company first realized it faced serious compliance risks over bribery allegations, Baker Hughes set up an independent panel chaired by Doty to help it navigate through this problem. Alan Crain Jr., Baker Hughes’ general counsel since 2000, says that the company has had a long relationship with Doty: “The thing that’s so good about Jim is that he has an encyclopedic knowledge of the compliance and enforcement area, that he exudes honesty and integrity, and he is so practical in the advice that he gives.” The Baker Hughes board was confident that Doty’s panel was giving it good advice because the panel’s recommendations focused not just on keeping the company out of trouble this time but on fixing problems so that the company runs better, Crain adds. In the end, a Baker Hughes subsidiary pleaded guilty to three felony counts, and the parent company entered a two-year deferred prosecution agreement with the SEC. It paid an $11 million criminal fine, a $10 million civil fine, and $23 million in disgorgement of profits — which, at $44 million, made for the largest combined penalty for FCPA violations. Doty still chairs the blue-ribbon panel overseeing compliance. He was also the administrator of a $79 million fund distributed last April by investment advisers Edward D. Jones & Co. as part of the settlement of an SEC enforcement action. The moneys were paid to customers to whom Edward Jones had failed to adequately disclose that it was being paid millions of dollars in revenue-sharing payments by certain mutual fund companies for selling their funds. Doty says he came late to the case as an independent consultant. The SEC proceeding was difficult for Edward Jones, he says, but it improved the way the company does business and it is better for having gone through the process. Persuading companies to take their medicine and convincing regulators that they have is what Doty does best. He says he knows no area of law that depends more on mutual respect than the advising of companies, and their boards and audit committees, on corporate governance and regulatory compliance. “What you want — to be effective and make a constructive difference — is to have credibility,” Doty says.

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