Top Menu

DOJ Announces Non-Binding Policy Discouraging “Piling On” Regarding Corporate Resolution Penalties


Yesterday, DOJ Deputy Attorney General Rod Rosenstein announced a non-binding policy discouraging “piling on” by instructing DOJ “components to appropriately coordinate with one another and with other enforcement agencies in imposing multiple penalties on a company in relation to investigations of the same misconduct.”

While this represents a new DOJ non-binding policy, the concept of “piling on” has been talked about for quite some time including by Obama administration enforcement officials. (See prior FCPA Professor coverage herehere and here). This includes in the FCPA context going back to the FCPA reform hearings in 2011 (see here for the prior post) – a concept that has long been termed “double-dipping” on these pages (see here). (See here for an FCPA Flash Podcast on the subject with David Bitkower (former Principal Deputy Assistant Attorney General).

The DOJ’s new policy is general in nature, not FCPA specific, but portions of it are FCPA relevant and a future post will analyze the new policy in the context of FCPA enforcement. For now, this post excerpts Rosenstein’s speech and sets forth the policy.

In pertinent part, Rosenstein stated:

“[W]e are announcing a new Department policy that encourages coordination among Department components and other enforcement agencies when imposing multiple penalties for the same conduct.  The aim is to enhance relationships with our law enforcement partners in the United States and abroad, while avoiding unfair duplicative penalties. It is important for us to be aggressive in pursuing wrongdoers. But we should discourage disproportionate enforcement of laws by multiple authorities. In football, the term “piling on” refers to a player jumping on a pile of other players after the opponent is already tackled.

Our new policy discourages “piling on” by instructing Department components to appropriately coordinate with one another and with other enforcement agencies in imposing multiple penalties on a company in relation to investigations of the same misconduct. In highly regulated industries, a company may be accountable to multiple regulatory bodies. That creates a risk of repeated punishments that may exceed what is necessary to rectify the harm and deter future violations. Sometimes government authorities coordinate well.  They are force multipliers in their respective efforts to punish and deter fraud. They achieve efficiencies and limit unnecessary regulatory burdens. Other times, joint or parallel investigations by multiple agencies sound less like singing in harmony, and more like competing attempts to sing a solo. Modern business operations regularly span jurisdictions and borders. Whistleblowers routinely report allegations to multiple enforcement authorities, which may investigate the claims jointly or through their own separate and independent proceedings. By working with other agencies, including the SEC, CFTC, Federal Reserve, FDIC, OCC, OFAC, and others, our Department is better able to detect sophisticated financial fraud schemes and deploy adequate penalties and remedies to ensure market integrity.

But we have heard concerns about “piling on” from our own Department personnel. Our prosecutors and civil enforcement attorneys prize the Department’s reputation for fairness. They understand the importance of protecting our brand. They asked for support in coordinating internally and with other agencies to achieve reasonable and proportionate outcomes in major corporate investigations.  And I know many federal, state, local and foreign authorities that work with us are interested in joining our efforts to show leadership in this area.

“Piling on” can deprive a company of the benefits of certainty and finality ordinarily available through a full and final settlement. We need to consider the impact on innocent employees, customers, and investors who seek to resolve problems and move on. We need to think about whether devoting resources to additional enforcement against an old scheme is more valuable than fighting a new one.

Our new policy provides no private right of action and is not enforceable in court, but it will be incorporated into the U.S. Attorneys’ Manual, and it will guide the Department’s decisions. This is another step towards greater transparency and consistency in corporate enforcement. To reduce white collar crime, we need to encourage companies to report suspected wrongdoing to law enforcement and to resolve liability expeditiously.

There are four key features of the new policy.

First, the policy affirms that the federal government’s criminal enforcement authority should not be used against a company for purposes unrelated to the investigation and prosecution of a possible crime. We should not employ the threat of criminal prosecution solely to persuade a company to pay a larger settlement in a civil case. That is not a policy change. It is a reminder of and commitment to principles of fairness and the rule of law.

Second, the policy addresses situations in which Department attorneys in different components and offices may be seeking to resolve a corporate case based on the same misconduct. The new policy directs Department components to coordinate with one another, and achieve an overall equitable result. The coordination may include crediting and apportionment of financial penalties, fines, and forfeitures, and other means of avoiding disproportionate punishment.

Third, the policy encourages Department attorneys, when possible, to coordinate with other federal, state, local, and foreign enforcement authorities seeking to resolve a case with a company for the same misconduct.

Finally, the new policy sets forth some factors that Department attorneys may evaluate in determining whether multiple penalties serve the interests of justice in a particular case.

Sometimes, penalties that may appear duplicative really are essential to achieve justice and protect the public. In those cases, we will not hesitate to pursue complete remedies, and to assist our law enforcement partners in doing the same. Factors identified in the policy that may guide this determination include the egregiousness of the wrongdoing; statutory mandates regarding penalties; the risk of delay in finalizing a resolution; and the adequacy and timeliness of a company’s disclosures and cooperation with the Department.

Cooperating with a different agency or a foreign government is not a substitute for cooperating with the Department of Justice. And we will not look kindly on companies that come to the Department of Justice only after making inadequate disclosures to secure lenient penalties with other agencies or foreign governments. In those instances, the Department will act without hesitation to fully vindicate the interests of the United States.

The Department’s ability to coordinate outcomes in joint and parallel proceedings is also constrained by more practical concerns.  The timing of other agency actions, limits on information sharing across borders, and diplomatic relations between countries are some of the challenges we confront that do not always lend themselves to easy solutions.

The idea of coordination is not new. The Criminal Division’s Fraud Section and many of our U.S. Attorney’s Offices routinely coordinate with the SEC, CFTC, Federal Reserve, and other financial regulators, as well as a wide variety of foreign partners. The FCPA Unit announced its first coordinated resolution with the country of Singapore this past December.


Coordination also will help us to identify culpable individuals and hold them accountable. We will seek appropriate corporate penalties when justified by the facts and the law. But the primary question should be, “Who made the decision to set the company on a course of criminal conduct?” Our investigations should focus on those individuals.
Our commitment to enhancing international coordination and promoting individual accountability is demonstrated by our increased cross-border enforcement.  The Attorney General assigned additional attorneys and paralegals to the Department’s Office of International Affairs to achieve those goals. The additional resources help us promptly and efficiently obtain necessary evidence from abroad through Mutual Legal Assistance Treaties and other mechanisms of foreign assistance. They also strengthen efforts to return fugitives from abroad for prosecutions here in the United States. At the same time, we will improve our ability to support our foreign counterparts by more expeditiously responding to their requests for assistance in securing evidence and fugitives located within our borders.”

In terms of the actual policy, it is titled “Policy on Coordination of Corporate Resolution Penalties” and Rosenstein’s memo states in full:

“Corporate enforcement, like other criminal and civil enforcement, must be guided by the rule oflaw. In reaching corporate resolutions, the Department should consider the totality of fines, penalties, and/or forfeiture imposed by all Department components as well as other law enforcement agencies and regulators in an effort to achieve an equitable result. Attached for your attention are new provisions to be incorporated in the U.S. Attorneys’ Manual. These provisions recognize the Department’s commitment to fairness, as well as the strength of our partnerships with law enforcement agencies and regulators in the United States and abroad. We are committed to rooting out and punishing corporate offenders, including through coordinated investigations and resolutions that fully vindicate the public interest. The Department also recognizes the value of corporate voluntary disclosures ofmisconduct and cooperation by responsible corporate actors. In appropriate cases, coordination and balancing of corporate resolution penalties furthers those aims. Thank you for sharing your helpful suggestions on this matter, and for your dedicated work to serve the American people.”

The: new insert in the U.S. Attorneys’ Manual is the following:

1-12.100 – Coordination of Corporate Resolution Penalties in Parallel and/or Joint Investigations and Proceedings Arising from the Same Misconduct

In parallel and/or joint corporate investigations and proceedings involving multiple Department components and/or other federal, state, or local enforcement authorities, Department attorneys should remain mindful of their ethical obligation not to use criminal enforcement authority unfairly to extract, or to attempt to extract, additional civil or administrative monetary payments.

In addition, in resolving a case with a company that multiple Department components are investigating for the same misconduct, Department attorneys should coordinate with one another to avoid the unnecessary imposition of duplicative fines, penalties, and/or forfeiture against the company. Specifically, Department attorneys from each component should consider the amount and apportionment of fines, penalties, and/or forfeiture paid to the other components that are or will be resolving with the company for the same misconduct, with the goal of achieving an equitable result.

The Department should also endeavor, as appropriate, to coordinate with and consider the amount of fines, penalties, and/or forfeiture paid to other federal, state, local, or foreign enforcement authorities that are seeking to resolve a case with a company for the same misconduct.

The Department should consider all relevant factors in determining whether coordination and apportionment between Department components and with other enforcement authorities allows the interests of justice to be fully vindicated. Relevant factors may include, for instance, the egregiousness of a company’s misconduct; statutory mandates regarding penalties, fines, and/or forfeitures; the risk of unwarranted delay in achieving a final resolution; and the adequacy and timeliness of a company’s disclosures and its cooperation with the Department, separate from any such disclosures and cooperation with other relevant enforcement authorities.

This provision does not prevent Department attorneys from considering additional remedies in appropriate circumstances, such as where those remedies are designed to recover the government’s money lost due to the misconduct or to provide restitution to victims.”

In his speech, Rosenstein also stated as follows regarding deterrence:

“We often talk about deterrence as a goal of law enforcement, but what causes deterrence?

For twelve years, I commuted 40 miles each way from Bethesda to Baltimore, mostly on Interstate 95. The speed limit is 65 miles per hour. Some people take that as a suggestion. They know the enforcement strategy. During those long drives, I sometimes thought about how well traffic laws illustrate the mission of law enforcement. Speed limit signs deter law-abiding people. If the rules are clear, most people obey them out of a sense of duty and honor. But some people are not deterred by rules. If we announce a speed limit, but we do not enforce it, then law-breakers always get ahead of law-abiding people. What if we post a speed camera? A speed camera deters many law-breakers. They slow down as they approach the camera. Then they speed up again. It is not a complete solution. Nonetheless, it does illustrate deterrence. But some people do not bother to slow down at all. Those people are thinking one of two things. Either they do not believe the government will enforce the penalty, or they calculate that the likely benefit of breaking the rule outweighs the potential penalty.

The lesson is that deterrence requires enforcement.  The rules that matter most are the ones that carry expected penalties that decision-makers are unwilling to pay.

Focusing on deterrence requires us to think carefully about what we can achieve in our enforcement actions. Corporate settlements do not necessarily directly deter individual wrongdoers. They may do so indirectly, by incentivizing companies to develop and enforce internal compliance programs. But at the level of each individual decision-maker, the deterrent effect of a potential corporate penalty is muted and diffused. Our goal in every case should be to make the next violation less likely to occur by punishing individual wrongdoers.”

In closing Rosenstein stated:

“In order to promote consistency in our white collar efforts, we established a new Working Group on Corporate Enforcement and Accountability within the Justice Department. The working group includes Department leaders and senior officials from the FBI, the Criminal Division, the Civil Division, other litigating divisions involved in significant corporate investigations, and the U.S. Attorney’s Offices.

The working group will make internal recommendations about white collar crime, corporate compliance, and related issues. We look forward to collaborating with other agencies and regulators in implementing the new coordination policy. And we welcome input from stakeholders who share our commitment to reduce crime and uphold the rule of law. Most American companies are serious about engaging in lawful business practices.  They want to do the right thing. They need and deserve our support to help protect them from criminals who seek unfair advantages. Corporate America should regard law enforcement as an ally.  In turn, the government should provide incentives for companies to engage in ethical corporate behavior and to assist in federal investigations.  Companies can help protect themselves by using caution when choosing business associates and by ensuring appropriate oversight of their activities.

By effectively combating white collar crime and prosecuting individuals when appropriate, we can protect Americans from fraud, and reduce the risk of another corporate-fraud epidemic. That will require us to get the policies right, articulate the policies clearly, train our agents and attorneys properly, and provide appropriate supervision.

The Department’s rhetoric gets a lot of attention – the policy memos and speeches.  But performance matters most.
When we are serious about wanting people to follow the law, it does no good merely to post a sign. We need to make clear our intent to enforce the law, with sufficient vigor that people fear the consequences of violating it.”

FCPA Institute - Zoom (May 16-18, 2023)

Elevate your FCPA knowledge and practical skills. Nine hours of integrated and cohesive instruction led by Professor Koehler (an FCPA expert with teaching experience). Learn more, spend less. Professional credential available.

Learn More and Register

Powered by WordPress. Designed by WooThemes