As the Trump Administration wraps up its first 100 days, practitioners have a bit more clarity regarding how the new Administration will assess corporate compliance programs, cooperation and white collar cases. Over the past few weeks, senior Department of Justice officials have consistently touted the Administration's continuing commitment to enforcing the Foreign Corrupt Practices Act (FCPA) and rewarding effective compliance programs.
Attorney General Jeff Sessions struck a note of continuity at the April 24 Ethics and Compliance Initiative Annual Conference. Despite the Trump Administrations initial emphasis on the prevention of violent crime and illegal immigration, the Attorney General stated that the DOJ largely will maintain Obama-era policies with respect to white collar crime. He explained that the initial focus on other issues "does not mean that we will reduce our efforts in other areas."
Regarding the FCPA, Sessions pledged to "continue to strongly enforce the FCPA and other anti-corruption laws," asserting that corruption "harms free competition, distorts prices, and often leads to substandard products and services coming into this country." Specifically, Sessions emphasized holding individuals accountable for corporate misconduct and self-reporting by culpable corporations and organizations, framing each as a continuation of existing DOJ policies and practices. He noted that to prosecute responsible individuals, the DOJ "will work closely with our law enforcement partners, both here and abroad, to bring these persons to justice." The Attorney General also stressed the importance of "building strong cultures of compliance" and pledged that the DOJ will "continue to reward effective compliance programs."
The Attorney General's remarks appear to be an endorsement of the Obama-era policy set forth in the September 2015 memorandum from then-Deputy Attorney General Sally Yates, which sought to more effectively combat corporate misconduct by seeking to hold more individuals accountable. That memorandum required, among other things, that a company must turn over all relevant facts regarding individuals involved in corporate misconduct before receiving cooperation credit and that prosecutors should not, absent extraordinary circumstances, enter into resolutions with corporate defendants that provide protection for potentially culpable individuals.
Finally, Sessions stated that when making charging determinations, the DOJ will continue to assess the strength of a company's compliance program, the extent of the company's cooperation, whether it self-discloses and whether the company takes appropriate remediation steps. Framing this as a continuation of past DOJ practice, Sessions noted that "[f]or years, the Department of Justice has directed our prosecutors to consider these factors when making charging decisions."
Interestingly, Sessions's speech came on the heels of comments by Pablo Quiñones, Chief of the DOJ's Strategy, Policy and Training Unit at the Anti-Corruption, Export Controls & Sanctions (ACES) Compliance Summit, in which he discussed the roles of Compliance Counsel expert Hui Chen and federal criminal prosecutors in assessing compliance programs and instituting enforcement actions. Chen was hired by the DOJ in November 2015 to help prosecutors develop and evaluate corporate compliance and remediation measures. At the April 18 ACES Summit, Quiñones was asked how important Chen's view of a corporate compliance program is in the DOJ's consideration of an enforcement action. Quiñones responded that while the Criminal Division "value[s] her expertise," when it comes to charging, "the ultimate decision is made by prosecutors." These comments by Quiñones may indicate that, while Chen's voice is considered, federal prosecutors also may make an independent judgment as they assess compliance programs in connection with charging decisions and settlement terms.
As a new era at the DOJ begins, including with the confirmation of Maryland US Attorney Rod Rosenstein as the new Deputy Attorney General, the comments by Sessions, Quiñones and other senior DOJ officials should remind companies and individuals that while an effective compliance program remains critical, prosecutors take a number of factors into consideration when determining whether to bring an enforcement action.
- Despite the Trump Administration's early focus on violent crime and immigration, the DOJ will continue its focus on investigating and prosecuting FCPA, fraud, and other white collar matters. Accordingly, companies should not expect a downturn in the FCPA enforcement trend.
- The need for companies to maintain a strong compliance program – especially with respect to anticorruption and the FCPA – and continually improve their policies and programs has never been more important.
- Internal corporate compliance training and messaging also should highlight the negative impacts of corruption and fraud on competition, prices, and the quality of products/services provided to customers.
- The Criminal Division will continue to consider the extent of a company's cooperation, whether the company self-discloses, and whether it takes appropriate remediation steps when determining whether to initiate an enforcement action. In order to best position themselves, companies need to take allegations of fraud and corruption seriously, vigorously investigate them when they arise, and take proactive steps to remediate any problems. This is so whether or not a company makes the difficult decision to self-report.