On September 27, 2018, in remarks delivered at the 5th Annual Global Investigations Review New York Live Event, Deputy Assistant Attorney General Matthew S. Miner reported on the accomplishments of the Department of Justice (“DOJ”) over the course of the last twelve months.  Importantly, he also discussed recent changes to the DOJ’s policies on prosecution of business organizations and how those changes have been implemented.[1]  Miner highlighted the DOJ’s efforts to incentivize and provide guidance to companies to self-report, cooperate and remediate corporate misconduct while underscoring the importance of robust compliance programs to detect and prevent wrongdoing and to obtain full credit in resolving investigations by the DOJ.

Miner first discussed the DOJ’s implementation of the FCPA Corporate Enforcement Policy (“Corporate Enforcement Policy”), which is designed to encourage voluntary self-disclosure of potential FCPA violations.[2]  Under the Corporate Enforcement Policy, absent aggravating circumstances, companies that self-report, cooperate and remediate misconduct are entitled to a presumption that the DOJ will decline prosecution.  As we noted at the time the Corporate Enforcement Policy was announced, one of the open questions is how the DOJ will apply the policy in the face of aggravating circumstances, such as the involvement of senior management in the underlying violation.[3]  Miner reported that three companies have received declinations since the Corporate Enforcement Policy’s introduction last November: Dun & Bradstreet Corporation,[4] the Insurance Corporation of Barbados Limited (“ICBL”)[5] and Guralp Systems Limited (“Guralp”).[6]  Miner pointed out that ICBL and Guralp had received declinations even though both cases involved aggravating circumstances (the participation of senior executives in the misconduct).[7]  Miner noted that these declinations demonstrate that the existence of an aggravating circumstance like management’s involvement in the wrongdoing does not automatically mean that a company will not receive a declination, and therefore companies should voluntarily disclose even when there is such involvement.  Miner also observed that in both cases the DOJ was able to prosecute individuals based, in part, on the companies’ cooperation, which was a factor in the DOJ’s decision to decline to prosecute the companies.[8]

Reflecting on the “sound policy considerations” implemented by the Corporate Enforcement Policy, Miner also spoke about the expansion of the policy to two other contexts.  First, Miner discussed the application of the principles contained in the Corporate Enforcement Policy to other types of corporate criminal cases, as previously announced by the DOJ in March 2018 by then-Acting Assistant Attorney General John Cronan.[9]  Miner cited the DOJ’s announcement in March that it would decline to prosecute Barclays in relation to front-running of FX transactions as an example of this expansion.  Miner counted the company’s timely and voluntary self-disclosure of the misconduct, its thorough and comprehensive internal investigation, full cooperation in the criminal investigation, enhanced compliance program, and full remediation as among the factors considered in the decision to decline prosecution.  Second, Miner built on his previously-announced expansion of the Corporate Enforcement Policy to the M&A context, noting that the DOJ will apply this expansion to all forms of corporate misconduct identified in the due diligence process, and not just those arising under the FCPA.[10]

In describing the rationale behind the DOJ’s expansion of the Corporate Enforcement Policy, Miner explained that “most companies want to do the right thing”[11] and are rational actors that respond to clear economic incentives.[12]  From the DOJ’s perspective, voluntary disclosures and cooperation by companies benefit the DOJ because such actions allow the DOJ to investigate companies more efficiently and can facilitate the DOJ’s ability to prosecute individuals.[13] In addition, the implementation of effective compliance programs helps to prevent misconduct and frees up resources the DOJ otherwise would have used to investigate that misconduct.[14] Finally, Miner emphasized that the consistent and fair enforcement of the law also benefits business, and society more generally, by enhancing stability in the marketplace.[15]

A final policy change that Miner discussed was the “anti-piling on” policy the DOJ announced in May, which is designed to encourage federal prosecutors to take into consideration the potential imposition of multiple penalties on companies by different regulators and authorities in the U.S. and abroad for the same underlying misconduct, and to encourage continued cross-border and intra-agency cooperation on investigations, and the resolution of investigations, of corporate wrongdoing.[16]  Miner noted several recent applications of the new policy, including the DOJ’s decision to decline to prosecute Guralp because of the company’s commitment to accept responsibility for its conduct through a resolution with the U.K.’s Serious Fraud Office, the DOJ’s agreement to credit Société Générale’s payment to the French Parquet National Financier for 50% of the DOJ’s criminal penalty, and the DOJ’s agreement to credit Petrobras’s payments to the Ministerio Publico Federal in Brazil and the U.S. Securities and Exchange Commission for 90% of the DOJ’s criminal penalty.[17]  Miner observed that these resolutions are part of a continuing trend of global enforcement and cooperation.

In addition, Miner summarized the achievements of the FCPA Unit thus far in 2018, noting that there have been eight corporate resolutions this year involving approximately $925 million in total corporate U.S. criminal fines, penalties and forfeiture, as well as charges brought against more than 30 individuals, resulting in 19 convictions.[18]  These figures are comparable to those of 2017, in which the DOJ announced eleven corporate FCPA criminal enforcement actions involving approximately $1.15 billion in total U.S. fines, penalties and forfeiture.  Miner also stated that, while there had been no FCPA trials over the prior twelve months, there were five FCPA-related trials scheduled over the next seven months, signaling that FCPA enforcement, and in particular the prosecution of individual wrongdoers, continues to be a focus for the DOJ.[19]

Miner’s remarks also emphasized the continued importance of robust compliance programs.  Miner highlighted the credit that companies could receive from implementing robust compliance programs and remedial measures when negotiating a resolution with the DOJ.  He also observed that businesses and the DOJ benefit from having an acquiring company with a robust compliance program already in place uncover wrongdoing and “right the ship” at its acquired company.  His speech underscored the priority companies should place on implementing strong compliance programs to prevent or detect improper conduct, which will better position them to make voluntary disclosures and obtain the maximum benefits of cooperation.

[1] See DOJ Press Release, Deputy Assistant Attorney General Matthew S. Miner of the Justice Department’s Criminal Division Delivers Remarks at the 5th Annual GIR New York Live Event (September 27, 2018), available at https://www.justice.gov/opa/speech/deputy-assistant-attorney-general-matthew-s-miner-justice-department-s-criminal-division (hereinafter, “Miner Remarks”).

[2] The FCPA Corporate Enforcement Policy is available at https://www.justice.gov/criminal-fraud/file/838416/download.

[3] See DOJ Releases FCPA Corporate Enforcement Policy, Cleary Enforcement Watch (December 1, 2017), available at https://www.clearygottlieb.com/~/media/organize-archive/cgsh/files/2017/publications/alert-memos/doj-releases-fcpa-corporate-enforcement-policy-12-1-17.pdf.  For additional discussion of DOJ’s FCPA Corporate Enforcement Policy see Elizabeth (Lisa) Vicens & Jonathan S. Kolodner, The New DOJ FCPA Corporate Enforcement Policy Highlights the Continued Importance of Anti-Corruption Compliance, Cleary Enforcement Watch (January 9, 2018), available at https://www.clearyenforcementwatch.com/2018/01/new-doj-fcpa-corporate-enforcement-policy-highlights-continued-importance-anti-corruption-compliance/.  For a further discussion of a recent settlement under the FCPA Corporate Enforcement Policy see Breon S. Peace, Jennifer Kennedy Park & Alex Janghorbani, Recent Settlement Highlights Cooperation Parameters Under the Department of Justice’s FCPA Corporate Enforcement Policy, Cleary Enforcement Watch (July 6, 2018), available at https://www.clearyenforcementwatch.com/2018/07/recent-settlement-highlights-cooperation-parameters-department-justices-fcpa-corporate-enforcement-policy

[4] See Dun & Bradstreet Declination Letter, available at https://www.justice.gov/criminal-fraud/file/1055401/download.

[5] See ICBL Declination Letter, available at https://www.justice.gov/criminal-fraud/page/file/1089626/download.

[6] See Guralp Declination Letter, available at https://www.justice.gov/criminal-fraud/page/file/1088621/download.

[7] See Miner Remarks at 2.

[8] See Miner Remarks at 3.

[9] See Jonathan S. Kolodner, Nowell D. Bamberger, Phillip L. Hurst & Garrett D. Shinn, DOJ Announces Expansion of Approach Encouraging Self Reporting and Cooperation, Cleary Enforcement Watch (March 5, 2018), available at https://www.clearyenforcementwatch.com/2018/03/doj-announces-expansion-approach-encouraging-self-reporting-cooperation/.

[10] Miner had clarified in a speech in July that the Corporate Enforcement Policy applied to potential FCPA violations discovered in connection with mergers and acquisitions.  See DOJ Press Release, Deputy Assistant Attorney General Matthew S. Miner Remarks at the American Conference Institute 9th Global Forum on Anti-Corruption Compliance in High Risk Markets, available at https://www.justice.gov/opa/pr/deputy-assistant-attorney-general-matthew-s-miner-remarks-american-conference-institute-9th.  For further discussion see Jennifer Kennedy Park, Jonathan S. Kolodner & Martine B. Forneret, DOJ Remarks Provide Guidance on Addressing FCPA Risk in M&A Transactions, Cleary Enforcement Watch (July 30, 2018), available at https://www.clearyenforcementwatch.com/2018/07/doj-remarks-provide-guidance-addressing-fcpa-risk-ma-transactions/.

[11] Miner Remarks at 3.   

[12] Id. at 2.

[13] Id.

[14] Id. at 4.

[15] Id. at 3.

[16] Id.  For further discussion of the “anti-piling on” policy, see Jennifer Kennedy Park & Jonathan S. Kolodner, Deputy Attorney General Rosenstein Announces New Policy to Limit “Piling On” in Enforcement Actions, Cleary Enforcement Watch (May 10, 2018), available at https://www.clearyenforcementwatch.com/?s=piling+on.

[17] Miner Remarks at 4-5.

[18] Id. at 6.

[19] Miner also announced that the Securities and Financial Fraud Unit brought charges against 62 individuals, including several individuals charged with manipulating the commodities markets, and obtained 36 convictions, while the Health Care Fraud Unit brought charges involving 320 individuals and obtained 193 convictions.  Id. at 6-7.