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Assistant AG Polite Talks Compliance And Related Topics

Polite

Recently DOJ Criminal Division Assistant Attorney General Kenneth Polite delivered this speech.

He focused on the following topics: how the DOJ evaluates “corporate compliance programs to ensure that companies are designing and implementing effective compliance systems and controls, creating a culture of compliance, and promoting ethical values,” corporate monitors, DOJ compliance related resources, and the consequences for a company violating a DOJ resolution agreement.

Polite also announced that he has asked his “team to consider requiring both the Chief Executive Officer and the Chief Compliance Officer to certify at the end of the term of the agreement that the company’s compliance program is reasonably designed and implemented to detect and prevent violations of the law (based on the nature of the legal violation that gave rise to the resolution, as relevant), and is functioning effectively.”

During his speech, Polite used the words or concepts “detect and prevent” several times. Keep in mind however, that there is no relevant legal standard that requires corporate compliance programs to “detect and prevent” violations of law. For this reason among others, Polite’s policy suggestion is off-target.

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Attorney General Garland On “Force-Multipliers” And Other Topics

Garland

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:

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In The Words Of The DOJ …

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Recently the Department of Justice Fraud Section released its 2021 Year in Review.

Set forth below are the FCPA relevant portions.

The Fraud Section has three “litigating units” including the FCPA Unit described as follows:

“The Foreign Corrupt Practices Act (FCPA) Unit has primary jurisdiction to investigate and prosecute violations of the FCPA and works in parallel with the Securities and Exchange Commission (SEC), which has civil enforcement authority for violations of the FCPA by publicly traded companies. The FCPA Unit has brought criminal enforcement actions against individuals and companies and has focused its enforcement efforts on both the supply side and demand side of corrupt transactions. The FCPA Unit also plays a leading role in developing policy as it relates to the FCPA, and training and assisting foreign governments in the global fight against corruption.”

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Measured By This Goal, DOJ Policy Has Failed

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Imagine a government enforcement agency unveiling an enforcement policy that had X as a stated goal and then nearly six years later, X occurred only 7% of the time.

The answer would seem clear: the goal of the enforcement policy failed.

As highlighted below, in releasing the 2016 FCPA Pilot Program and thereafter in 2017 in releasing the FCPA Corporate Enforcement Policy (CEP), the DOJ stated that a “main goal” was to encourage voluntary disclosures to permit prosecution of individuals. Yet, nearly six years later there have been FCPA prosecutions of individuals in only 7% of cases the DOJ has self-identified as being resolved pursuant to / or consistent with the Pilot Program or the CEP.

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DOJ Individual Actions: The Strange Public – Private Divide

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These pages track all sorts of Foreign Corrupt Practices Act statistics.

Some of the statistics are “inside baseball” like and other statistics (such as the long time periods associated with FCPA scrutiny or the general lack of individual enforcement actions in connection with most corporate enforcement actions) raise significant public policy issues and/or undermine government rhetoric.

The statistic discussed in this post fits all three categories: it is equal parts “inside baseball,” it raises significant public policy issues, it undermines government rhetoric, and moreover it is just plain strange.

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