Department of Justice turns up the heat on enforcement efforts against individual wrongdoers
Last week, the Department of Justice (“DOJ”) issued a Memorandum, The Fraud Section’s Foreign Corrupt Practices Act Enforcement Plan and Guidance, outlining a new pilot program that offers enhanced “mitigation credit” to companies that “fully cooperate” through self-disclosure of FCPA-related misconduct. The goal of the new program is three-fold. First, encourage companies to create or strengthen anti-corruption compliance programs, second, deter individuals and companies from engaging in FCPA activity, and, finally, to “increase the Fraud Section’s ability to prosecute individual wrong-doers whose conduct might otherwise have gone undiscovered or been impossible to prove.”
Significant attention has been focused on the impact the DOJ Memo will have on companies, but from an individual perspective the ramifications of this memo are significant. The DOJ has now reinforced their commitment to the prosecution of individuals first laid out in the Yates Memo last year. In the Yates Memo, companies were directed to identify individual corporate wrongdoers to meet the full disclosure requirements to qualify for cooperation credit. The new DOJ Memo latches on to the language in the Yates Memo underscoring the focus on the “prosecution of individuals whose criminal wrong-doing might otherwise never be uncovered or disclosed to law enforcement.”
Individual corporate actors are more at risk today than ever before. DOJ has made individual accountability a focus in their corporate investigation priorities, and has now, through the DOJ Memo, offered up to a 50 percent reduction off the low end of the potential guideline range for fines that would otherwise be applicable and no compliance monitor. Most importantly, DOJ will consider declination to prosecute. These are significant benefits to companies if they self-report and turn over corporate wrongdoers in the process. As a result, officers, agents and employees have been placed at significant risk, and the conflict between the interests of the company and that of its’ people has been placed in sharp contrast.
To put a point on their campaign to find and prosecute individuals in the FCPA arena specifically, DOJ has added 10 new prosecutors – double the previous number – to the FCPA unit and the FBI has added three new squads dedicated solely to FCPA investigations and prosecutions. DOJ has also added a compliance attorney to review and approve cooperating companies’ compliance programs.
DOJ is firmly committed to aggressively prosecuting FCPA violations, and the new DOJ Memo highlights the DOJ’s broad focus on holding corporate individuals accountable for their actions. The extension of the directives first outlined in the Yates Memo has put companies across the world on notice that United States is serious about finding and prosecuting individual wrongdoers. As a result, many large companies have been advised to act now by reviewing their FCPA and compliance programs, evaluate structure, reassess risk and test the effectiveness of the existing safeguards. In that same vein, individual officers, agents and employees would be wise to take note of these new developments to avoid the risks of individual prosecution. Front-Line Anti-Bribery, LLC, CEO Richard Bistrong said it well: “The next time you’re tempted to dream up some clever way to pull off overseas bribery without getting caught, read the Yates Memo. And think about the real-life consequences of the decision you’re about to make.” I suggest you add the new DOJ Memo to that reading list.