I have been reading speeches by Department of Justice enforcement officials on white collar crime, compliance, and related issues for approximately 15 years.
I take many of these speeches with a grain of salt because more often than not, the substance of the speech have been articulated before and because I am not seeking to actively market DOJ policy as a way to expand my services (as so many law firms and others do).
Many of these speeches have the look and feel on an “infomercial” in which a DOJ official is trying to market and sell its latest widget.
So it was with this recent speech by Deputy Assistant Attorney General Lisa Miller Delivers in which she stated that the “carrots we offer have never been juicer.”
After summarizing DOJ Fraud Section 2022 numbers – yet at that same time insisting that the DOJ’s work “isn’t about the numbers,” Miller noted that the DOJ’s FCPA Unit “had an even strong year in 2022 than 2021” (which of course was not much of a feat given that 2021 saw the fewest – by far – number of corporate enforcement actions over the past 15 years) and repeated the more normal talking points such as:
“Corruption threatens democracy and the rule of law itself. Corruption heightens inequality and fuels skepticism of effective governance, aiding autocratic leaders. International cooperation and coordination are, therefore, essential to fighting corruption.
With our partners, FCPA prosecutors pursued cases against individuals to punish corrupt actors and deter others on all sides of the illegal scheme: bribe payors, intermediaries, and public officials.”
Miller next stated:
“The department cannot measure its success merely in terms of prosecutions, trials, and convictions. Success includes crime prevention.
A more compliant, ethical corporate world is a safer world – one that advances America’s interests writ large. Companies should understand that the way to compete in the global marketplace, and the path to a more secure world, is not offering bribes or manipulating markets – it’s by managing risks and incentivizing ethical employee behavior.
Accordingly, our corporate enforcement policies and our enforcement actions transparently focus upon incentivizing companies to implement effective compliance programs, and for the same reason, reward voluntary self-disclosure, cooperation, and remediation of the causes of misconduct.”
In doing so, Miller became just the latest DOJ official to articulate the policy rationale for an FCPA compliance defense (see this prior post for instance).”
Miller next discussed “what corporate resolutions are and what they aren’t” and stated:
“There is, of course, no corporate jail. Yet, resolutions are not “free passes.” Corporations undertake serious obligations when they enter resolutions. Whether an NPA, DPA, or corporate plea, those obligations include reporting allegations of misconduct to the Criminal Division, regardless of the credibility of those allegations; obligations to improve compliance programs; cooperation obligations; certifications by executives at the conclusion of the resolution; and depending on the facts, the agreement could include an independent compliance monitor. Our prosecutors continue to police companies’ adherence to resolutions throughout their terms, and if companies fail to follow through, they face additional penalties and reputational harm.
In each case, our opportunity (and challenge) is to foster deterrence and accountability so companies don’t just adopt a “cost-of-doing-business” mentality with respect to our investigations and then return to business-as-usual after a corporate resolution.”
Miller next referred to the recent revisions to the DOJ’s Corporate Enforcement Policy (CEP) (see here for the prior post) and said: “the carrots we offer have never been juicier.”
“In a nutshell, these revisions:
- Reaffirm that, to receive a presumption of a declination, companies must timely voluntarily self-disclose misconduct, fully cooperate, and fully remediate;
- Make it possible for a company to receive a declination in a wider range of cases, i.e., even where aggravating factors may be present, the company may still be eligible for a declination if it demonstrates that it has met additional factors related to self-disclosure, compliance, cooperation, and remediation;
- For voluntary self-disclosure cases in which a resolution is warranted, offer at least a 50%, and as much as a 75%, reduction from the otherwise applicable U.S.S.G. range for companies that timely, voluntarily disclose misconduct, and fully cooperate and remediate; and
- Even in cases where companies do not voluntarily self-disclose, increase the potential penalty reduction for all companies that fully cooperate and timely and appropriately remediate, from a maximum of 25% to 50% off of the U.S.S.G. range.
We appreciate how carefully boards and counsel weigh these decisions.
Taken together, these changes offer companies new and concrete incentives and powerfully make the business case for voluntary self-disclosure. The revisions also motivate companies to maximally cooperate and remediate even when they have not self-disclosed conduct. The broader range of possibilities under our new policy will enable prosecutors to make sharper distinctions between corporate behavior.”
What is interesting is that prior versions of the DOJ’s “infomercial” said the same basic things: that the DOJ’s policy offered companies new and concreate incentives and powerfully make the business case for voluntary self-disclosure.
However, few seemed to fall for the marketing pitch in the prior “infomercials.” If they did, why the need for revisions?
Just like every good “infomercial” often ends with a phone number, Miller stated: “the bottom line: call us before we call you.”