In recent remarks, AAG Brian A. Benczkowski emphasized that the US Department of Justice remains serious about fighting corporate fraud and corruption, and noted that transparency in its criteria for prosecution is a key tool for both DOJ and private sector companies. Reinforcing the importance of effective compliance programs, he noted that companies are more likely to implement such programs when it is clear what conduct DOJ will credit or penalize.
Assistant Attorney General Brian A. Benczkowski delivered remarks at the 33rd Annual ABA National Institute on White Collar Crime Conference in New Orleans, Louisiana, on March 8. AAG Benczkowski focused his presentation on the importance of transparency in actions brought and decisions made by the US Department of Justice (DOJ), stating that “when companies understand what conduct will be credited or penalized, the more likely they are, as generally rational actors, to implement effective compliance programs and, upon finding misconduct, to voluntarily disclose it, cooperate with the government, and remediate.” As AAG Benczkowski noted, DOJ and the private sector have a mutual interest in seeing corporate misconduct fairly and effectively deterred and redressed, and transparency in the criteria used by DOJ in exercising its prosecutorial discretion enhances those aims.
Consistent with DOJ’s intent to prosecute fraud aggressively, AAG Benczkowski stressed the Department’s commitment to white collar criminal enforcement, adding, “You needn’t take my word for it. The numbers themselves bear this out.” He then provided statistics of white collar prosecutions brought by DOJ’s Criminal Division during fiscal year 2018, noting an increasing number of prosecutions by the Fraud Section since 2017—particularly by the Foreign Corrupt Practices Act (FCPA) and Health Care Fraud units. AAG Benczkowski emphasized that DOJ remains steadfast in holding culpable individuals accountable, and also in holding corporations responsible where their actions warrant entity-level resolution. He stated that recent prosecutions should send a message to the industry: DOJ is serious about fighting corporate fraud and corruption, and it is serious about doing so through resolutions that are “fair and effective.”
AAG Benczkowski cited DOJ’s current policies that aim to provide guidance and better visibility into DOJ’s decisionmaking process, including the FCPA Corporate Enforcement Policy and the “anti-piling-on” policy. He also highlighted DOJ’s disclosure of its case declinations and the rationale behind those decisions, noting that the purpose is to convey to the public that DOJ will reward companies that voluntarily self-disclose, cooperate, and remediate.
He next referenced DOJ’s continued updating of certain key policies as evidence of the Department’s ongoing effort to promote transparency and to ensure that its policies are comprehensive and current. For example, AAG Benczkowski cited (1) the recent update of the Criminal Division guidance memorandum on the selection of corporate monitors, and (2) the extension of “the principles of the Corporate Enforcement Policy to situations where misconduct is uncovered through due diligence in the context of a merger or acquisition or, in appropriate instances, through post-acquisition audits or compliance integration efforts.” With respect to the latter policy, he commented that applying it to the “M&A context avoids chilling acquisition activity by law-abiding companies, who might otherwise walk away from worthwhile investments due to the risk of FCPA enforcement.”
AAG Benczkowski announced that, in addition to policy updates, the DOJ Criminal Division will host the first of what is anticipated to be an annual training program for white collar prosecutors, which will focus on how prosecutors should evaluate the effectiveness of corporate compliance programs. Through this training, DOJ hopes to further promote consistency in the exercise of prosecutorial discretion.
Invoking DOJ’s continued efforts to foster transparency, AAG Benczkowski encouraged companies to voluntarily self-disclose, take steps to prevent misconduct through compliance programs, and implement remedial measures when misconduct is detected. According to AAG Benczkowski, if companies commit to this approach, they can expect a “fair shake” from DOJ. To support this position, he cited to DOJ’s recent decision not to prosecute a multinational IT services corporation—even though C-suite executives were involved (the former president and former chief legal officer)—where the company self-disclosed the illegal conduct quickly, allowing DOJ to identify and charge the culpable individuals. In its declination letter, DOJ noted several factors for the decision, including the thoroughness of the company’s internal investigation; the proactive and ongoing nature of its cooperation with the government; the effectiveness of its preexisting compliance program; and the company’s willingness to remediate fully and disgorge its entire cost savings from the illegal conduct.
AAG Benczkowski’s remarks reinforce the importance of maintaining effective compliance programs: to prevent and detect misconduct; to avoid government investigations; and to mitigate their impact should they ensue. Additionally, his comments reflect DOJ’s continued emphasis on rewarding corporate entities engaged in efforts to develop strong compliance programs and report and correct misconduct, including a presumption of declination for those entities that voluntarily self-disclose, cooperate fully, and remediate.