In a major speech delivered on September 15, 2022, Deputy Attorney General Lisa Monaco added important substance and details to Department of Justice policies aimed at aggressively combatting corporate crime and encouraging companies to self-report misconduct. These new policies result from months of DOJ meetings with a Corporate Crime Advisory Group comprised of stakeholders from the business community, the defense bar, public interest groups, academics, and others. Monaco stated that the policies "empower companies to do the right thing—and empower our prosecutors to hold accountable those who don't."
Speed in Self-Reporting
DOJ has announced that speed in investigations is a high priority, and delay in cooperation may come at a high cost to companies under investigation. DOJ has a longstanding policy of rewarding companies that self-report misconduct with leniency in prosecution decisions. Yet, in DOJ's view, many companies strategically delay disclosure of key documents or information while attempting to mitigate crises or conclude their own investigations. To deter such behavior, DOJ will now reduce or deny cooperation credit to companies that fail to timely produce important information or documents—particularly those that show the individuals responsible for the misconduct. This change means companies must make an early decision on whether to cooperate, perhaps even before all facts and conclusions are fully developed.
Incentives for Self-Reporting
DOJ also announced specific, predictable incentives for companies that self-report. In recent years, some DOJ components developed policies rewarding companies that provided timely, complete self-reports of misconduct by agreeing, in return, not to demand corporate guilty pleas. This approach will now extend throughout the Department. DOJ's aim is to provide clearly understood incentives for companies to self-report misconduct rather than allowing the uncertainty of leniency to discourage early cooperation.
A "Holistic" View of Misconduct History
In earlier guidance, DOJ announced that when making prosecution decisions, it would begin taking a broader, "holistic" view of a company's criminal, civil, and regulatory record. That announcement prompted a wave of questions from the defense bar and the business community regarding whether this broader approach would disproportionately disadvantage multi-national corporations and companies in highly-regulated industries where the likelihood of some history of enforcement actions is naturally higher. In Monaco's speech, she clarified that history of misconduct will now be benchmarked against competitors in the same industry to determine if a company under investigation is truly an outlier. She also clarified that recent enforcement history would be given greater weight and that criminal actions 10 years or older, and civil and regulatory actions five years or older would not be considered.
Monitoring the Monitors
Following the 2021 announcement that DOJ would require the appointment of compliance monitors in some corporate criminal resolutions, Monaco revealed that DOJ would release new, detailed guidance to bring transparency and predictability to the processes of deciding whether a monitor is necessary, and the selection and oversight of the monitor. Monaco further promised that DOJ would devote more attention to ensuring that the monitorship would not stray beyond its stated scope and budget.
Culture of Compliance
Monaco noted that the Corporate Crime Advisory Group discussed various ways DOJ can encourage companies to foster a culture of compliance. As a result, DOJ announced that in assessing the effectiveness of compliance programs, prosecutors will pay greater attention to payroll. Specifically, DOJ will now consider to what extent companies use metrics and benchmarks to financially reward employees and departments that show compliance-promoting behavior. Conversely, DOJ will assess whether a company seeking leniency has taken steps to claw back compensation and financially penalize wrongdoers.
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