On September 15, 2022, the Deputy Attorney General Lisa Monaco announced the Department of Justice’s (DOJ) revisions to corporate criminal enforcement policies following discussions with the corporate crime advisory group. The policy changes focus on individual accountability, corporate accountability, monitorships, and transparency in corporate criminal enforcement. The policies in the memorandum will be incorporated in the Justice Manual through revisions and new sections on independent corporate monitorships. (Further Revisions to Corporate Criminal Enforcement Policies, September 15, 2022 (justice.gov)).
Regarding individual accountability, Monaco focused on the following policies that will reinforce this priority: 1) timely disclosures and prioritization of individual investigations, and 2) foreign prosecutions of individuals responsible for corporate crime. In doing so, the memorandum cited the Memorandum from Deputy Attorney General Sally Quillian Yates, “Individual Accountability for Corporate Wrongdoing,” Sept. 9, 2015 (Yates Memo) and emphasized swift investigations and resolutions.
Regarding corporate responsibility, Monaco focused on the following four areas that DOJ will consider in resolving cases against organizations: 1) a corporation’s history of misconduct, 2) a corporation’s voluntary self-disclosures, 3) a corporation’s cooperation, and 4) a corporation’s compliance program. Metrics relevant to an evaluation of a corporation’s compliance program and culture include 1) compensation structures that promote compliance, and 2) use of personal devices and third-party applications.
The guidance regarding independent compliance monitorships lists the following non-exhaustive factors when evaluating whether a monitor is appropriate. It also provides guidance on selection of a monitor and continued review of monitorships.
- Whether the corporation voluntarily self-disclosed the underlying misconduct in a manner that satisfies the particular DOJ component’s self-disclosure policy;
- Whether, at the time of the resolution and after a thorough risk assessment, the corporation has implemented an effective compliance program and sufficient internal controls to detect and prevent similar misconduct in the future;
- Whether, at the time of the resolution, the corporation has adequately tested its compliance program and internal controls to demonstrate that they would likely detect and prevent similar misconduct in the future;
- Whether the underlying criminal conduct was long-lasting or pervasive across the business organization or was approved, facilitated, or ignored by senior management, executives, or directors (including by means of a corporate culture that tolerated risky behavior or misconduct, or did not encourage open discussion and reporting of possible risks and concerns);
- Whether the underlying criminal conduct involved the exploitation of an inadequate compliance program or system of internal controls;
- Whether the underlying criminal conduct involved active participation of compliance personnel or the failure of compliance personnel to appropriately escalate or respond to red flags;
- Whether the corporation took adequate investigative or remedial measures to address the underlying criminal conduct, including, where appropriate, the termination of business relationships and practices that contributed to the criminal conduct, and discipline or termination of personnel involved, including with respect to those with supervisory, management, or oversight responsibilities for the misconduct;
- Whether, at the time of the resolution, the corporation’ s risk profile has substantially changed, such that the risk of recurrence of the misconduct is minimal or nonexistent;
- Whether the corporation faces any unique risks or compliance challenges, including with respect to the particular region or business sector in which the corporation operates or the nature of the corporation’s customers; and
- Whether and to what extent the corporation is subject to oversight from industry regulators, or a monitor imposed by another domestic or foreign enforcement authority or regulator.
The memo concludes with a statement that “[r]obust corporate criminal enforcement remains central to preserving the rule of law – ensuring the same accountability for all, regardless of station or privilege.” Based on the policies in this DOJ memorandum, it certainly appears that corporate criminal enforcement will be a priority of the DOJ and this administration.