For at least the second time in recent weeks, the Justice Department’s criminal division chief delivered lengthy public remarks on what the department expects from companies choosing to cooperate with federal investigators. In a speech at the New York Bar Association’s Fourth Annual White Collar Crime Institute last week, Assistant Attorney General Leslie Caldwell returned to the topic of corporate cooperation. It was the latest in a string of speeches from DOJ on this subject.
Under the department’s Principles of Federal Prosecution of Business Organizations (also known as the Filip Factors), federal prosecutors may consider a company’s cooperation when charging a company or resolving a case. The Principles flesh this out, but with these speeches, DOJ is “pounding the pavement on cooperation,” Ms. Caldwell said, and increasing transparency on what that means. Dovetailing this effort, DOJ is also adding more detail on Filip Factor considerations in resolution documents like deferred prosecution agreements (DPAs).
Building upon comments from earlier speeches about what’s essential to cooperation credit (or antithetical to it), Ms. Caldwell noted the following:
- Cooperative internal investigations have “universal” features.
- Through those internals, companies learn the relevant facts.
- Companies provide those facts, good or bad, to the government.
- The facts include those about individuals responsible for the misconduct, regardless of rank.
- Companies provide the evidence in a timely fashion.
- Cooperation means “helping to remove and overcome the barriers to identifying and producing the relevant information” that DOJ needs for a “meaningful” investigation. This may mean providing documents to DOJ that it could otherwise obtain through litigation or the compulsory process. She criticized, in particular, companies’ “kneejerk invocation of foreign data privacy laws” and warned that DOJ had made a point of learning more about foreign data privacy laws and would question overbroad assertions.
- Companies that “boil the ocean” may not earn cooperation credit for doing so. Unnecessarily broad or costly investigations also may delay resolution. Company counsel should talk with prosecutors about ways to focus investigations so they can avoid wasting time and energy on facts and conduct outside DOJ’s investigative scope.
- Cooperation is more than compliance with a subpoena. Cooperation is also more that public talking points, whitewashing of facts on individuals, or withholding information on potential wrongdoing just because companies or their counsel can imagine an innocent explanation.
- Cooperative companies are “equally forthcoming” to all involved regulators and enforcement entities. Providing inconsistent or incomplete information across authorities involved in an investigation will impact DOJ’s “cooperation” evaluation.
- Cooperation may not earn a company maximum credit but it will earn them something. Companies that choose to cooperate and share relevant information quickly, have a “real chance” of declination, but even imperfect cooperation can yield a less draconian outcome. By the same token, cooperation that is slow, incomplete and not fully candid, and comparatively reactive instead of proactive, may be defective, diminishing available credit.
Ms. Caldwell insisted that, by laying out these suggestions and admonitions, DOJ was not telling company counsel how to run an investigation. Company counsel is not expected to play the FBI agent, and DOJ recognizes the place for zealous advocacy. It is asking for “thoughtful, reasonable steps” toward providing a “full and accurate picture of what happened.”
As helpful as it is that DOJ is defining cooperation here and elsewhere, the transparency is short on specific prescriptions. Instead of firming up the Principles, these speeches offer morsels of advice, caveated and case-specific – more cautionary tale than affirmative guidance. Perhaps that’s the nature of the law in this area. Perhaps that’s what all sides ultimately want: flexibility and nuance. Still, it remains to be seen whether DOJ’s transparency on this score results in more “orderly” investigations and mutually beneficial cooperation.