Recently, Acting Deputy Assistant Attorney General Robert Zink delivered this virtual speech in which he talked about: (i) the DOJ’s use of data; and (ii) cooperation and coordination including the DOJ’s so-called “anti-piling” policy.
Zink also stated that “it’s important that the [DOJ Criminal] Division is held accountable by the public for its work—both good and bad.” Duly noted.
As to data, Zink stated:
“This year also saw the Fraud Section utilize data in innovative and creative ways to identify, detect and, where appropriate, charge federal crimes. We have embraced, wholesale, the proposition that data can and does serve as a significant indicator of fraud, foreign bribery, and other white-collar offenses. We have invested in data analysis and used data to initiate many of our criminal investigations—often covertly—to obtain evidence while the underlying offense is still being committed and without the criminal offenders’ knowledge of our investigation. Our efforts using data to identify criminal conduct have yielded considerable cases and results. Expect the Fraud Section to do more on this front in the coming months and years.”
Regarding “the value of cooperation and the importance of coordination,” Zink stated:
“Department policy is clear.
Under the Principles of Federal Prosecution of Business Organizations, a company may receive cooperation credit if the company “identif[ies] all individuals substantially involved in or responsible for the misconduct at issue, regardless of their position, status or seniority, and provide[s] to the Department all relevant facts relating to that misconduct.”
And under the Department’s FCPA Corporate Enforcement Policy—which the Division applies to all corporate matters within the Fraud Section—a company is entitled to a significant percentage reduction off the low-end of the otherwise appropriate advisory Sentencing Guidelines range, so long as the company satisfies certain criteria set forth in the policy.
Taken together, these policies (1) establish what cooperation is, (2) provide a baseline and threshold to obtain cooperation credit, (3) provide specific guidance regarding how to go about obtaining cooperation credit, and (4) go so far as to articulate specific reductions based on the quality of a company’s cooperation.
We, at the Fraud Section, have been consistent in our application of these principles and policies in our work.
And we are public and transparent in how we apply these principles and policies to our resolutions.
You have seen this in our cases this year.
In the Section’s corporate resolution papers this year, you saw companies of widely different types, in widely different industries, receive significant cooperation credit under Department policy.
Specifically, you saw:
- Airbus received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case;
- Herbalife received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case;
- Novartis and Alcon received 25 percent reductions for their full cooperation in their FCPA cases;
- Sargeant Marine received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case;
- And Vitol received a 25 percent reduction off the low end of the Guidelines range for its full cooperation in an FCPA case.
When companies cooperate with the Fraud Section in connection with its investigations and prosecutions, there are benefits.
For one, if criminal liability is established, cooperation may affect the ultimate form of resolution—be it plea agreement, deferred prosecution agreement, or non-prosecution agreement.
Second, cooperation certainly will affect how much a company is required to pay, or not pay, assuming criminal liability has been established.
Cooperation reductions can be, and often are, significant—routinely totaling tens of millions of dollars.
So, cooperation matters.
And the Fraud Section faithfully applies Department policies on cooperation, crediting it when it happens and taking note when it does not.”
As to “the importance of coordination,” Zink stated:
Under the Department’s “Anti-Piling On” policy, prosecutors “should  endeavor, as appropriate, to coordinate with . . . other federal, state, local, or foreign enforcement authorities that are seeking to resolve a case with a company for the same misconduct.”
And at the Fraud Section, we have been clear and consistent in our application of this Department policy.
This year, we applied the “Anti-Piling On” policy to many of our corporate criminal resolutions.
These resolutions included cases involving multiple U.S. enforcement authorities and cases involving U.S. and foreign enforcement authorities.
In these coordinated resolutions, we credited certain amounts paid to other authorities.
In performing our crediting analysis, we carefully considered the equities of the authorities involved as well as the respective national interests of the authorities involved.
And we did so because the offending corporation, in every instance, made a good faith, bona fide effort to coordinate and assist the relevant authorities in achieving a global resolution.
Which brings me to a key point—the difference between what the “Anti-Piling On” policy is, and what it is not.
In our view, the policy is an attempt by the Department to ensure an appropriate and fair outcome for an offending company.
This is achieved, through the policy, by advising Department attorneys to coordinate, as appropriate, with different federal, state, local, or foreign enforcement authorities before resolution to achieve an overall equitable result for the company that avoids unnecessary and unwarranted duplication.
In our view, the policy is not something to be used offensively or tactically by corporations or counsel.
What I mean by that is that the policy is not intended to be exploited by companies to strategically resolve with other enforcement authorities first, often on an incomplete record and with no acceptance of responsibility or admission of liability.
Only later to be used against the Department in subsequent criminal resolution discussions in support of an argument that any further criminal enforcement action by the Department should be precluded or mitigated because of the prior uncoordinated resolution.
Unfortunately, on occasion we see just that: attempts to use this policy—one that is meant to protect companies from unfairly duplicative penalties—against the Department.
Let me also underline one aspect of this policy that may seem obvious but bears special emphasis—coordination requires effort from all sides.
From the Department, from its enforcement authority counterparts and, of course, from the offending company.
And to achieve meaningful coordination—indeed, to enable coordination to occur at all—companies must attempt to coordinate with the Department.
If a company wants Section prosecutors to give any weight to a request that they should credit some, or all, of a preceding resolution with another enforcement authority, that coordination, or attempts to coordinate, must occur well before any agreement is reached with another enforcement authority.
From our perspective, this is how the policy operates, in both theory and practice.”
In other enforcement agency news, the SEC recently announced that Division of Enforcement Director Stephanie Avakian will conclude her tenure by the end of the year. Avakian, who began her career at the SEC, leaves the agency after leading the Enforcement Division over the last four years as Co-Director and then Director.
If you are scoring at home, this means that all three signatories to the July 2020 Second Edition of the FCPA Guidance have left, or will soon leave, the government.
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