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Assistant Attorney General Caldwell’s Unconvincing Defense Of DPAs / NPAs

As noted in this Global Investigations Review article, at a recent event in Paris in connection with the release of the OECD’s Foreign Bribery Report, Assistant Attorney General Lisa Caldwell defended the DOJ’s frequent use of DPAs and NPAs to resolve Foreign Corrupt Practices Act enforcement actions.  As stated in the article:

“Caldwell defended the Department of Justice’s (DoJ) reliance on settlements in FCPA cases. “In the United States we are often able to achieve much more through a settlement – a negotiated settlement – than we could achieve following conviction at trial,” she said. “We are able to impose reforms, impose compliance controls, and impose all sorts of behavioural change that a court would never be able to impose following even a conviction at trial.” Since 2009 over 50 companies have settled with the DoJ for alleged FCPA violations. Caldwell told the audience in Paris: “Companies cannot be sent to jail, so all a court can do is say you will pay ‘x’. We can say: ‘you will also have a monitor and will do all sorts of other things for the next five years, and if you don’t do them for the next five years then you can still be prosecuted’.” “In the United States system at least it is a more powerful tool than actually going to trial,” she said.

Post-enforcement action compliance obligations typically last 2-3 years, not 5 as Caldwell suggested.  Regardless, Caldwell’s defense of DPAs and NPAs is just as unconvincing as former Assistant Attorney General Lanny Breuer’s defense of DPAs and DPAs in September 2012 (see here for the prior post).

For starters, the function of the DOJ’s criminal division, as stated on its website, is to “serve the public interest through the enforcement of criminal statutes.”  Whether the function of the DOJ is, in addition, to “impose reform, impose compliance controls, and all impose all sorts of behavioral changes” on a business organization is a point of much disagreement. (See, e.g., “Prosecutors in the Boardroom“).

Regardless of one’s thoughts on whether the DOJ’s criminal division ought to play the role of a quasi-regulator, the notion that the DOJ is powerless to effect corporate change through old-fashion law enforcement (that is enforcing the FCPA without use of NPAs and DPAs) is plainly false.

For instance, the Siemens enforcement action did not involve the use of an NPA or DPA.  Yet, it is clear from the plea agreement, sentencing memorandum, and judgment that the DOJ was able to obtain the reforms, compliance controls and behavioral changes it wanted.  More recently in 2014, the Alcoa enforcement action was resolved without an NPA or DPA.  The plea agreement and judgment in the case (see here and here) again demonstrate that the DOJ was again able to obtain the reform, compliance controls and behavioral changes it wanted.

To return to Caldwell’s words, perhaps NPAs and DPAs are indeed a more powerful tool in FCPA enforcement actions than actually going to trial, but then again the DOJ is 0-2 in FCPA history when put to its ultimate burden of proof by a business organization in an FCPA enforcement action.

Just because the DOJ may have difficulty proving FCPA violations against business organizations and just because the DOJ is troubled – with good reason – by traditional notions of corporate criminal liability, does not mean the DOJ needs to continue to champion the alternate universe of NPAs and DPAs it has created.


To read a different perspective on Caldwell’s recent remarks, see here from Tom Fox at the FCPA Compliance and Ethics Blog.

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