Louis Freeh, Ex-FBI Chief, Taps Old Skills in New Job

Wall Street Journal
Published: Feb. 12, 2012

Louis Freeh is a big name who likes to keep his business small.

After eight years as director of the Federal Bureau of Investigation, Mr. Freeh now runs his own investigative firm and law practice, Freeh Group International Solutions LLC.

Louis Freeh is investigating Penn State’s handling of child-sex charges.

In recent months, he has taken on some of the toughest jobs available: conducting Penn State’s internal probe into its child sex-abuse scandal; becoming a trustee for creditors of the collapsed Wall Street firm MF Global Holdings Ltd. and investigating an SAT cheating scandal.

His investigative operation employs about 27 full-time lawyers and other professionals, and he keeps only about 10 major clients at any one time—often blue-chip companies, such as Daimler AG, which hired him to oversee compliance after settling charges it violated a U.S. antibribery law.

Mr. Freeh’s specialty, he said in an interview, is “a situation where there is a real consuming crisis that could lead to the end of an enterprise or a franchise or a brand.” He declined to say what he charges clients, but said his business is profitable and has no outside investors.

From Public Life to Private Business
The job calls on Mr. Freeh’s experience as an FBI agent and a prosecutor known for tackling organized crime, but contrasts with the vast bureaucracy he led as FBI director, a job for which critics said he was ill-suited.

Mr. Freeh acknowledged that people accused him of micromanaging cases as FBI director. And his insistence on independence rankled superiors at the time. President Bill Clinton and his advisers came to see Mr. Freeh as an underperformer who curried favor with congressional Republicans by investigating the president. Mr. Freeh, in turn, came to see Mr. Clinton as too enmeshed in problems of his own making to spend enough time to help in the hunt for global terrorists.

Today, Mr. Freeh maintains his independent streak, insisting to clients that they are buying his investigative work, not a seal of approval. He says he warns them that they may not like what he finds.

“You’ve got to fight for your reputation every day,” he said in the interview at his New York offices. “You do that by calling these things as you see them, not pulling any punches, and following through on your threat to be completely independent.”

The 62-year-old Mr. Freeh says he isn’t just the name on the door, and that his personal involvement in cases distinguishes him from competitors.

Recently, Mr. Freeh, a colleague and a former Pennsylvania state trooper interviewed a witness on Penn State’s sprawling campus. Mr. Freeh was the lead questioner, taking notes on a yellow legal pad.

In the more than three decades since Mr. Freeh began his career as an FBI agent, some things haven’t changed. “I do the interviews pretty much in the style and format I’ve used since I was 25 years old,” he said.

At Penn State, Mr. Freeh was hired to investigate how the university handled the child-sex-abuse allegations surrounding former assistant football coach Jerry Sandusky. Mr. Sandusky, who is awaiting trial, has denied the charges. Mr. Freeh’s assignment is to determine what school officials could have done differently and should do in the future.

Mr. Freeh said he has already hired ex-FBI agents with experience in child-sex cases, and expects his Penn State investigative team will eventually number around 15 people. Yet he insists that what his corporate clients really get when they hire Freeh Group is Louis Freeh.

“I like to have a direct working relationship with the [chief executive] or the chairman of the board,” he said. “On a daily basis, I know what’s going on in that case. A CEO called me the other night, and I was able on the phone to tell him exactly what’s going on.”

Mr. Freeh said he couldn’t give an estimate of when the Penn State investigation would conclude, in part because there are people he would like to interview but can’t yet because of continuing criminal prosecutions. The school has promised to make public his final report.

Mary Jo White, who was U.S. attorney in Manhattan during Mr. Freeh’s 1993-2001 term as FBI director, said, “Louis is, probably more than anything else, an investigator’s investigator. He is very hands-on, and he was very hands-on as a director of the FBI.”

That direct approach can be intimidating to those under Mr. Freeh’s microscope. When he was hired last year to probe possible corrupt acts by an executive at FIFA, the international soccer body, the official abruptly resigned and said he would rather “die first” than be interviewed by Mr. Freeh.

Meanwhile, his work on the Scholastic Aptitude Test case, in which students are accused of hiring stand-ins to cheat on the college-entrance exam, is nearing completion. His role as trustee for MF Global could drag on indefinitely amid a search for the firm’s missing money.

Mr. Freeh said his goal in MF Global is finding any assets and making sure that those are fairly distributed. That could be a tough sell, particularly if he seeks to give bondholders or big bank creditors preference over MF Global’s individual customers.

“Remember, there’s a lot of checks and balances in the system,” he said. “The judge is going to have to make the ultimate decisions, and that’s why most people have confidence in the system.”

Milestones in former FBI Director Louis Freeh’s career

  • 1975-1981: FBI special agent in New York
  • 1981-1991: Assistant U.S. attorney in New York; prosecuted ‘Pizza Connection’ case involving mobsters using pizza parlors to traffic in drugs
  • 1991-1993: Federal court judge in Manhattan, nominated by President George H.W. Bush
  • 1993-2001: FBI director, nominated by President Bill Clinton
  • 2001-2006: Senior executive and general counsel at MBNA Corp., until its acquisition by Bank of America
  • 2007: Formed Freeh Group International Solutions