U.S. Deputy Attorney General Rod Rosenstein said at a conference this morning that the U.S. Department of Justice has revised its guidelines relating to corporate resolutions with the DOJ, particularly as those guidelines relate to charging culpable individuals. The revised guidelines modify the 2015 Yates Memo, and affirmatively obligate companies seeking leniency from the DOJ to investigate and furnish information about culpable employees and agents substantially involved in wrongdoing.
Corporations now will receive cooperation credit in criminal resolutions only if all employees substantially involved in the alleged wrongdoing are identified to the government. And in civil resolutions, corporations will receive cooperation credit only if the corporation reveals the involvement of senior management and board members in the alleged wrongdoing. The new policy highlights the DOJ’s ongoing focus on criminal and civil enforcement actions against individuals and emphasizes the importance of giving serious consideration to obtaining individual counsel very early in the process of an investigation.
The revisions announced today at the American Conference Institute’s 35th Annual Conference on the Foreign Corrupt Practices Act generally provide that “absent extraordinary circumstances or approved departmental policy such as the Antitrust Division’s Corporate Leniency Policy,” the government should pursue provable individual criminal charges against individuals. The guidelines further provide that even in instances where the DOJ declines to pursue criminal charges against a culpable individual, civil claims should still be pursued. Declinations against culpable individuals must be approved in writing by the relevant United States Attorney or Assistant Attorney General and “[i]n instances where the United States declines to pursue criminal charges or civil claims against a culpable individual,” its reasons must be memorialized and approved.
DOJ has revised four of the 10 factors the government should consider in assessing the proper treatment of a corporate target in a criminal resolution. Those revisions, as set forth in Justice Manual 9-28.300 and marked below, include:
4. the corporation’s willingness to cooperate in the investigation of, including as to potential wrongdoing by its agents (see JM 9-28.700);
5. the existence adequacy and effectiveness of the corporation's pre-existing corporation’s compliance program at the time of the offense, as well as at the time of a charging decision (see JM 9-28.800);
7. the corporation’s remedial actions, including, but not limited to, any efforts to implement an adequate and effective corporate compliance program or to improve an existing one, to replace responsible management, to discipline or terminate wrongdoers, to pay restitution, and to cooperate with the relevant government agencies or to pay restitution (see JM 9-28.1000); and
9. the adequacy of remedies such as civil or regulatory enforcement actions, including remedies resulting from the corporation’s cooperation with relevant government agencies (see JM 9- 28.1200).
Finally, the revised guidelines provide that in the context of criminal cooperation, a corporation must identify all individuals who were “substantially involved in or responsible for the misconduct,” as opposed to all individuals who may have simply been involved in the misconduct. This revision reflects an understanding by DOJ that “there may be circumstances where, despite its best efforts to conduct a thorough investigation, a company genuinely cannot get access to certain evidence….” While the company will bear the burden of explaining to the DOJ the restrictions it is facing, the company should not lose criminal cooperation credit where its cooperation is legitimately limited by circumstances beyond its control.
In the context of civil resolutions, the revised guidelines allow the relevant United States Attorney or Assistant Attorney General to exercise “discretion in appropriate circumstances to offer some cooperation credit” where the corporation falls short of earning maximum cooperation credit. However, discretion is limited by an additional revision stating that the DOJ will not “award any credit to a corporation that conceals involvement in the misconduct by members of senior management or the board of directors . . .” To earn maximum civil cooperation credit, the revised guidelines state that a corporation “generally should do a timely self-analysis and be proactive in voluntarily disclosing wrongdoing and identifying all individuals substantially involved in or responsible for the misconduct, without making the government compel such disclosures with subpoenas or other investigative demands.” (see JM 4-3.100(3)).