Earlier this month, at the American Bar Association’s (ABA) 38th National Institute on White Collar Crime, Deputy Attorney General Lisa O. Monaco and Assistant Attorney General Kenneth A. Polite, Jr. highlighted the Department of Justice’s (DOJ) recent policy changes and expanded initiatives in corporate criminal enforcement, emphasizing once again the importance of affirmative corporate compliance and DOJ’s commitment to individual accountability. The deputy AG also highlighted a recent area of focus for the Department — sanctions evasion.
Among those policies and initiatives discussed or announced were the following:
Voluntary Self-Disclosure Policies
In September 2022, Deputy AG Monaco had directed each DOJ component to develop its own voluntary self-disclosure policy to encourage corporate cooperation in criminal enforcement. The purpose of the policy directive was to promote a culture of corporate compliance while ensuring transparency and consistency in the way that DOJ treats corporations that engage in criminal activity. The deputy AG highlighted in her ABA remarks that every component that prosecutes corporate crime has complied with her directive. As she noted, in February 2023 DOJ announced a single policy for all 94 U.S. Attorney’s Offices (USAOs) across the country, thus “eliminating geographic disparities and uncertainties.” Although there are variations among the policies for the different components, the central principle of each, according to Monaco, is that “absent aggravating factors, no department component will seek a guilty plea where a company has voluntarily self-disclosed, cooperated and remediated the misconduct.”
How the components harmonize their policies and how uniformly the USAOs implement theirs remains to be seen, but the message from the deputy AG is clear — DOJ wants corporations to believe that it is in their best interest to affirmatively self-disclose their own misconduct.
Evaluation of Corporate Compliance Programs
Assistant AG Polite’s remarks similarly focused on allying corporate compliance efforts with the Criminal Division’s investigatory efforts. He announced revisions to the Evaluation of Corporate Compliance Programs (ECCP), including how DOJ will “consider a corporation’s approach to the use of personal devices as well as various communications platforms and messaging applications, including those offering ephemeral messaging,” and whether policies governing these messaging applications ensure that business-related electronic data and communications can be preserved and accessed. DOJ will also consider “how companies communicate the policies to employees, and whether they enforce them on a consistent basis.”
Assistant AG Polite was clear that where companies have not produced communications from third-party messaging applications, prosecutors will affirmatively ask about their “ability to access such communications, whether they are stored on corporate devices or servers, as well as applicable privacy and local laws,” and that “[a] company’s answers — or lack of answers — may very well affect the offer it receives to resolve criminal liability.” He cautioned: “[W]hen crisis hits, let this be top of mind.”
Pilot Program on Compensation Incentives and Clawbacks
DOJ also announced a pilot program incentivizing companies to make their own efforts to reach individual actors beyond DOJ’s prosecutorial efforts. DOJ hopes corporate compensation programs can help shift the burden of “corporate malfeasance away from uninvolved shareholders onto those more directly responsible,” and to that end, Deputy AG Monaco previewed DOJ’s Pilot Program on Compensation Incentives and Clawbacks.
Styled as a prevention mechanism, the program provides that “when entering into criminal resolutions, companies will be required to implement compliance-related criteria in their compensation and bonus system and to report to the [Criminal] Division about such implementation during the term of such resolutions.” In addition, as Assistant AG Polite explained in his subsequent remarks officially launching the three-year pilot program, it also offers “fine reductions for companies that seek to clawback compensation in appropriate cases.” Assuming companies, acting in good faith, have initiated the process to recover such compensation, at the time of resolution, whether or not successful, prosecutors will accord additional fine reductions equal to the amount of any compensation recouped or up to 25% off the amount that has been sought, depending on the outcome of the company’s efforts.
DOJ expects companies “to address not only employees who engaged in wrongdoing in connection with the conduct under investigation, but also those who had supervisory authority over the employees or business area engaged in the misconduct, and knew of, or were willfully blind to, the misconduct.”
Resource Commitment to Corporate Criminal Enforcement in the National Security Division
Signaling a new enforcement priority in the area of corporate criminal enforcement — the intersection of corporate crime and national security — Deputy AG Monaco also announced “significant restructuring and resource commitments within the National Security Division” to address “sanctions evasion, export control violations, and similar economic crimes.” Those resource commitments include the addition of more than 25 prosecutors, one of whom will be the division’s first-ever chief counsel for corporate enforcement.
Deputy AG Monaco indicated that the National Security Division will be issuing joint advisories with the Departments of Commerce and Treasury, including one announced that same day on Russia‑related sanctions evasion and export controls. The joint compliance note addresses a common tactic used to evade Russia-related sanctions and export controls: use of third-party intermediaries or transshipment points. It provides warning signs for companies that suspect customer misconduct and guidance on how to maintain effective, risk-based compliance programs.
Revised Memorandum on the Selection of Monitors in Criminal Division Matters
Finally, Assistant AG Polite addressed the revised memorandum on the selection of monitors in the Criminal Division, which makes clear “to the public, our prosecutors, defense counsel, and corporations — how we select monitors” and “articulates and clarifies the conflict of interest obligations associated with serving as a lead monitor, or even as part of a monitor team.”
He flagged in particular that the revised policy “makes explicit what has been the case the last several years — that any submission of a monitor candidate by the company and selection of a monitor candidate by the Criminal Division should be made in keeping with the department’s commitment to diversity, equity, and inclusion.”
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