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Thoughts On Recent DOJ Speeches

Thoughts

Reading speeches by high-ranking DOJ officials through the lens of a specific law is interesting.

For instance, in recent speeches both Deputy Attorney General Lisa Monaco and Acting Assistant Attorney General Nicole Argentieri talked about the importance of individual accountability.

Monaco stated that the DOJ’s “first priority has been — and will continue to be — individual accountability. Companies can only act through individuals. The rule of law demands that those most culpable for a company’s misconduct are the ones being charged, prosecuted, and convicted.”

Likewise, Argentieri stated “companies act only through people, and so, above all, our number one goal is holding culpable individuals accountable — including corporate executives, no matter how prominent or influential.”

Such statements of course have been articulated by DOJ officials for many, many years.

It’s interesting though that in the last approximate 15 years approximately 75% of corporate DOJ FCPA enforcement actions have not resulted in any DOJ FCPA charges against company employees.

Compare this figure to FCPA enforcement prior to 2004.

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 dramatic reversal? (See here).

Argentieri also stated as follows:

“But our corporate enforcement actions show the industry-wide impact of our policies in action. We have brought cases against some of the largest and most significant companies in their sectors. Cases that send a clear message to industry about the importance of — and the benefits from — strong compliance programs, and in so doing, will transform those industries.”

Transform is a word that has long been used by DOJ officials to rationalize DOJ policies.

For instance, in 2012 Assistant Attorney General Lanny Breuer defended the DOJ’s frequent use of NPAs and DPAs and stated:

“Over the past three-and-a-half years, the Department of Justice has entered into dozens of DPAs, and non-prosecution agreements, or NPAs.  I’ve heard people criticize them and I’ve heard people praise them.  What I’m here to tell you, is that, along with the other tools we have, DPAs have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.”

Time would demonstrate just how empty those words were as several companies on the ever-expanding list of FCPA repeat offenders resolved its first FCPA enforcement action through a DPA or NPA only to resolve a second FCPA enforcement action (in some cases a short time later and often times through a DPA or NPA again).

Talking about post-enforcement action compliance obligations, Argentieri noted that currently “there are nearly 40 companies under supervision by the Fraud Section or MLARS (Money Laundering and Asset Recovery Section). Twenty-four of those companies have a market capitalization of more than $1 billion and 22 of them are public companies.”

Think about this for a minute.

There are currently 40 companies under “DOJ supervision” including 22 public companies!

Is this the proper role of the DOJ?

DOJ officials of course talk frequently about voluntary disclosure and Argentieri was “proud to announce that early indications are that our [voluntary disclosure] policies are bearing fruit.”

How does she know?

Argentieri explained:

“Since 2021, there have been substantial year-over-year increases in disclosures from companies to the Fraud Section. In 2023, we received nearly twice as many disclosures as in 2021. We expect this trend to continue as more companies take advantage of the benefits of voluntary self-disclosure and the CEP more generally.”

This rationalization is almost laughable.

2021 was likely one of most disruptive and unique years in corporate history due to COVID. Comparing many statistics to 2021 is likely not going to tell one much of anything other than that 2021 (as well as 2020 and perhaps even 2022) were unique years.

Monaco also spoke about voluntary disclosure and stated that DOJ policies on voluntary disclosure are “consistent, transparent, and predictable.”

How is a non-binding DOJ policy document providing prosecutors substantial discretion (see here for the latest iteration) “consistent, transparent, and predictable” particularly when it is based on vague and ambiguous terms and concepts like: “effective,” “extraordinary,” “egregious,” “fully,” “timely,” “appropriately,” “significant,” “reasonably prompt,” “proactive,” and “appropriate” (among other terms)?

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