This recent Wall Street Journal article focused on individual DOJ enforcement actions in connection with corporate enforcement actions in the aftermath of the so-called Yates Memo (September 2015) in which the DOJ was supposedly going to place a renewed emphasis “in any corporate case of holding individual wrongdoers accountable.”
The article noted: “between 2016 and 2020, [the DOJ] prosecuted employees in 37% of 146 cases where companies received leniency through so-called deferred or non-prosecution agreements.”
What do the numbers look like specifically in the FCPA context?
Between 2016 and 2020, the DOJ prosecuted employees in 25% of 36 FCPA cases “where companies received leniency through so-called deferred or non-prosecution agreements” (to use the WSJ’s phrase).
The number falls even further upon adding in the 7 instances during this time frame in which the DOJ resolved a corporate enforcement action through a so-called “declination with disgorgement.”
Specifically, between 2016 and 2020, the DOJ charges employees with FCPA offenses in only 22% of 45 FCPA cases in which companies resolved the matter through a DPA, NPA or declination with disgorgement.
What is interesting about these numbers is that they have completely flipped compared to the dynamic present for most of FCPA enforcement history.
As highlighted in this prior post, from 1977 to 2004 approximately 90% of DOJ criminal corporate FCPA enforcement actions RESULTED in related FCPA charges against company employees.
Why the flip?
In 2004, the DOJ introduced alternative resolution vehicles (NPAs, DPAs) to the FCPA context and further introduced another resolution vehicle (declinations with disgorgement) to the FCPA context in 2016.
In many corporate FCPA enforcement actions resolved through these resolution vehicles (all of which are not subject to any meaningful judicial scrutiny) it is an open question whether viable, provable FCPA violations even occurred vs. a business organization resolving the matter for reasons of risk aversion.
Against this backdrop, it is understandable why the DOJ may not charge company employees with FCPA offenses given that individuals are much more likely to put the DOJ to its burden of proof in an enforcement action.