Recently outgoing Deputy Attorney General Rod Rosenstein delivered this speech to a university audience. Like many of Rosenstein’s prior speeches highlighted on these pages, the speech was a pleasure to read for its general advice.
For instance, Rosenstein stated: “Today, you are relentlessly bombarded with information, much of it of unknown reliability. The internet lets people share their most ignorant thoughts. Many news stories rely on anonymous sources, without providing details to assess their credibility and bias. Some critics worry that our society will be unable to distinguish fact from opinion, and truth from fiction.”
Perhaps Rosenstein was talking about certain FCPA commentary? (See here, here and here for instance).
Moving on to more legal subjects, Rosenstein (as he has done in several prior speeches) stated:
“At the Department of Justice, our patriotic mission is to promote the rule of law. The term “rule of law” describes the government’s obligation to follow neutral principles. The idea dates at least to the fourth century BC, when Greek philosopher Aristotle wrote that “[i]t is more proper that law should govern than any one of the citizens.
[…]
The rule of law is indispensable to a thriving and vibrant society. It shields citizens from government overreach. It allows businesses to invest with confidence. It gives innovators protection for their discoveries. It keeps people safe from dangerous criminals. And it allows us to resolve differences peacefully through reason and logic.
When you follow the law, it does not always yield the outcome you would choose. In fact, one indicator that you are following the law is when you respect a result although you do not agree with it. You respect it because it is dictated by the facts and the law.”
Rosenstein also talked about the rule of law in this other recent speech.
As discussed in this prior post, it is an open question whether certain FCPA enforcement actions or enforcement agency policy are even consistent with the rule of law.
Rosenstein next stated:
“Prosecutions are an important deterrent to crime, but strong corporate compliance programs are the first line of defense. That is why the Department of Justice should reward companies that try in good faith to deter crime – those that voluntarily implement meaningful compliance programs. When crimes occur, good corporate citizens investigate it, report it to the authorities, cooperate in investigations, and implement appropriate remedies.
Law enforcement agencies should give the greatest consideration to companies that establish effective compliance programs, because it frees our agents and prosecutors to focus on people who commit more serious financial crimes or pose other threats to America.
During my tenure as Deputy Attorney General, we updated Department policies to reflect those principles and to create stronger incentives to uphold the law.
[…]
Corporations need to prepare for unexpected events, but government should provide certainty when possible.
That principle underlies my approach to corporate liability. Companies can be held legally responsible for criminal acts by their employees, but that is not always the most reasonable outcome. In our Foreign Corrupt Practices Act cases, we established a policy that incentivizes exemplary corporate conduct. Companies that self-report violations, cooperate with investigations, and remediate harm are rewarded with a presumption that we will decline to pursue the company with criminal charges. Instead, we focus our limited resources on companies that fail to take compliance obligations seriously.”
Once again (see here for the prior post), Rosenstein nicely articulated the policy rationale for an FCPA compliance defense. However, the best way to “reward companies that try in good faith to deter crime,” and “incentivize exemplary corporate conduct” is not through non-binding DOJ guidance full of vague terms (see here) that the DOJ refuses to provide clarity on (see here).
Rather, those laudable policy goals could best be accomplished through an FCPA compliance defense (see here for article Revisiting an FCPA Compliance Defense).
Separately, Rosenstein’s suggestion that to be a “good corporate citizen,” a business organization must report improper conduct to authorities should be rejected. In the FCPA context, a business organization can be a “good corporate citizen” by thoroughly investigating an issue, terminating or disciplining culpable actors, and implementing appropriate remedial measures – all without disclosing to the government.
In this recent speech, Rosenstein stated:
“When our government makes an allegation of wrongdoing, we need to prove it.”
Well, not exactly. In the FCPA context, all the government needs to do is make allegations and then risk averse business organizations will generally roll-over and play dead and agree to a non-prosecution agreement, deferred prosecution agreement or declination with disgorgement.
In fact, in FCPA history the DOJ is believed to be 0-2 when put to its ultimate burden of proof by a business organization (see here and here).
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