The Department of Justice (DOJ) continues to elaborate on its commitment to principles of individual accountability in corporate civil and criminal investigations, even as questions arise with respect to enforcement policies under the new Administration. In a November 30 speech, deputy attorney general Sally Yates provided an overview of DOJ’s heightened focus on individuals and introduced a new website offering resources on the application of the “Yates Memorandum.”
Given the intense industry reaction over the last year to the DOJ’s heightened focus on individuals, any clarification on the application of the Yates Memorandum can be of interest to the board’s audit and compliance committee. This is particularly the fact given that several recent False Claims Act (FCA) settlements involving health care organizations have included some form of financial penalty assessed on officers and to directors. In reviewing the roll-out of the Yates Memorandum over the last year, Ms. Yates commented that, to date, the new policy was achieving its objectives (i.e., that DOJ prosecutors and civil attorneys are focusing more concretely on individuals and doing so earlier in the investigation). “[Our] people are reviewing evidence against individuals up and down the corporate ladder, looking for those who may have violated the law. And if we determine that we have a case that merits prosecution, you can be sure that we are ready to go.”
The new DOJ website, “Individual Accountability,” includes links to the original Yates Memorandum, as well as the changes made last year to DOJ’s Principles of Prosecution of Business Organizations. In addition, it includes answers to a number of the most frequently asked questions on individual accountability issues, as a form of guidance.
The audit and compliance committee would benefit from a briefing by the general counsel and the company’s outside white collar counsel on the ongoing application of the Yates Memorandum, expectations as to continued focus on individual accountability following the change of administration, and the implications for continued board emphasis on an organizational culture of compliance with law. Ms. Yates noted in her speech that a “significant number of investigations” that commenced after the release of the Yates Memorandum will not be resolved “until well into the next administration.” She expects that, regardless of the fate of the policy, “in coming months and years, when companies enter into high-dollar resolutions with the Justice Department, you’ll see a higher percentage of those cases accompanied by criminal or civil actions against the responsible individuals.”