Yesterday, Attorney General Merrick Garland delivered this speech (virtually) to the ABA Institute on White Collar Crime.
In the speech, Garland discussed many of the same topics that DOJ enforcement officials have been talking about for 10-15 years such as how prosecution of corporate crime is a DOJ priority, the importance of individual accountability, and corporate cooperation.
Garland began his speech as follows:
“It will not surprise you to hear that the prosecution of corporate crime is a Justice Department priority. Nor does anyone need to tell this audience why that is so. Fraud, theft, corruption, bribery, environmental crime, market manipulation, and anticompetitive agreements threaten the free and fair markets upon which our economy is based. They decimate the assets of individuals, organizations, and governments alike. And they increase costs for every American. Corporate crime weakens our economic institutions by undermining public trust in the fairness of those institutions. Failing to aggressively prosecute such crimes weakens our democratic institutions by undermining public trust in the rule of law. The essence of the rule of law is that like cases are treated alike; that there is not one rule for the powerful and another for the powerless; one rule for the rich and another for the poor. To fail to aggressively prosecute corporate crime leads citizens to doubt that their government adheres to this principle. The Justice Department does not intend to fail.”
In the FCPA context, query whether “like cases are treated alike” given the buffet of resolution vehicles the DOJ uses such as actual criminal charges, deferred prosecution agreement, non-prosecution agreements, and so-called declinations with disgorgement. Moreover, do some of those resolution vehicles represent “aggressively” prosecuting corporate crime?
Regarding individual prosecutions, Garland stated:
“As the Deputy Attorney General noted, I have made it clear that the Department’s first priority in corporate criminal cases is to prosecute the individuals who commit and profit from corporate malfeasance. It is our first priority because corporations only act through individuals. It is our first priority because penalties imposed on individual wrongdoers are felt by those wrongdoers, rather than by shareholders or inanimate organizations. It is our first priority because – as everyone who has counseled individual corporate officers know – the prospect of personal liability has an uncanny ability to focus the mind. That prospect is the best deterrent to corporate crime. And deterrence – after all – is what we are after. But most important, the prosecution of individuals is our first priority because it is essential to Americans’ trust in the rule of law. As I said a moment ago: the rule of law requires that there not be one rule for the powerful and another for the powerless; one rule for the rich and another for the poor. When people see individuals walk while their companies pay the fines, they cannot help but think that essential principle has been violated. Indeed, as Attorney General Edward Levi noted in a 1975 speech, the very term “white collar crime” is itself “unfortunate since it suggests a distinction in law enforcement based upon social class.” Having tried and supervised corporate criminal cases, I know full well that obtaining individual convictions rather than accepting big-dollar corporate dispositions is a difficult and resource-intensive road for the Justice Department. Accordingly, the Department is marshaling its resources to enable us to successfully take that road.”
Given how Garland framed the issue, is “trust in the rule of law violated” when approximately 80% of corporate FCPA enforcement actions in recent years lack any related criminal charges against individuals?
Garland next discussed how the DOJ is “bolstering our resources by adding force-multipliers to our prosecutors and agents.”
One force-multiplier is data analytics and Garland stated:
“We are using big data – our own, and the data of other departments and agencies – to identify payment anomalies that are indicative of fraud. And we have provided the Criminal Division’s Fraud Section with a new, embedded squad of FBI agents to further strengthen our ability to bring data-driven corporate crime cases nationwide. This represents an enormous expansion of the data analytic work we first applied to health care fraud when I supervised the Fraud Section as a Deputy Assistant Attorney General.”
According to Garland, another force-multiplier are defense counsel “who represent corporations and their boards of directors.” Garland stated:
“As the Deputy Attorney General reported when she spoke with you last fall, we have restored prior Department guidance making clear that, to be eligible for any cooperation credit, companies must provide the Justice Department with all non-privileged information about individuals involved in or responsible for the misconduct at issue. This means all individuals, regardless of their position, status, or seniority, and regardless of whether a company deems their involvement as “substantial.” When the Justice Department offers a company the opportunity to enter into a resolution for its misconduct, it is in that company’s best interest to provide us with a full picture of what happened and who was involved. When we give a company the opportunity to come clean, it must come clean about everyone involved in the misconduct, at every level.”
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