New DOJ Guidance on Corporate Enforcement Focuses on "Timely" Disclosures, Prosecutions of Individual Executives, Executive Compensation, and Management of Monitors
On September 15, 2022, Deputy Attorney General (DAG) Lisa Monaco issued a new memorandum on "Further Revisions to Corporate Criminal Enforcement Policies" that will apply across all of the U.S. Department of Justice's (DOJ) "components" including the Fraud Section, which enforces the U.S. Foreign Corrupt Practices Act (FCPA). This new memorandum follows DAG Monaco's October 28, 2021 memorandum on "initial revisions" to those policies, and is the result of an evaluation process by the DOJ's Corporate Crime Advisory Group (CCAG) that included input from the private sector and defense bars. The new memorandum announces new guidance for DOJ prosecutors in several key areas of interest to companies potentially facing criminal investigations, including:
- "Guidance on individual accountability" including the prioritization of building cases against culpable individuals in parallel with related corporate investigations, with specific discussions on:
- How the DOJ will assess whether corporate voluntary disclosures are "timely" for purposes of assessing cooperation, including whether such disclosures provide sufficient evidence to build cases against individuals on a timely basis
- Coordination of investigation of potentially culpable individuals by non-U.S. authorities
- Discussion of how to evaluate a company's history of prior corporate misconduct in making decisions about resolving present investigations – an issue broached in the October 2021 memorandum that raised significant concerns, some of which are addressed
- Further guidance on assessment of credit for voluntary self-disclosures and cooperation, designed to harmonize this analysis across the DOJ
- New commentary on how to evaluate a company's corporate compliance program, including new specific discussion of the role of executive compensation structures (incentives and disciplinary mechanisms)
- Expansion of prior DOJ guidance on corporate policies related to use of personal devices and "third party applications" (such as WhatsApp and other chat applications), focused on the need for corporate policies to ensure that information from these sources can be provided to the DOJ in investigations
- New discussion on the imposition, selection, and management of Independent Compliance Monitors, including the need for active DOJ engagement throughout the term of any monitorship
- Reiteration of the DOJ's commitment to appropriate transparency regarding its corporate enforcement decisions
We will not discuss every aspect of the 15-page DOJ memorandum; instead, we focus and comment on certain key issues of note for compliance professionals. DAG Monaco and Assistant Attorney General (AAG) for the Criminal Division Kenneth Polite, Jr. have spoken publicly on the new memorandum, offering additional commentary.
In many instances, the new memorandum extends principles articulated in the previously issued FCPA Corporate Enforcement Policy across the entire DOJ (except for other existing policies, such as those long issued by the Antitrust Division). As such, in the world of FCPA enforcement, the new memorandum is not a game changer – but some of the new guidance will significantly impact the DOJ approach to FCPA investigations.
Priorities for Cases Against Individuals
The section on individual accountability states up front that "[t]he Department's first priority in corporate criminal matters is to hold accountable the individuals who commit and profit from corporate crime." Both DAG Monaco and AAG Polite emphasized this concept in their speeches, with Monaco stating, "we cannot ignore the data showing overall decline in corporate criminal prosecutions over the last decade. We need to do more and move faster." (emphasis in original)
"Timely Disclosure" of Evidence of Individual Misconduct
Because "[d]elayed disclosure undermines efforts to hold individuals accountable," the new memorandum states, "to receive full cooperation credit, corporations must produce on a timely basis all relevant, non-privileged facts and evidence about individual misconduct such that prosecutors have the opportunity to effectively investigate and seek criminal charges against culpable individuals" (emphasis added). Companies bear the burden on such production and the memorandum emphasizes that companies should prioritize the disclosure of such evidence in cooperation efforts. The memorandum also clarifies that "[c]ompanies that identify significant facts but delay their disclosure will place in jeopardy their eligibility for cooperation credit."
As noted by the new memorandum and related DOJ speeches, the priority treatment of such evidence is driven by factors that can impede cases against individuals, including the running of statutes of limitations, "dissipation of evidence, and the fading of memories." While public information regarding the failure of potential cases against individuals in the past is limited, there have been instances in which evidence-gathering, especially in transnational investigations, has run into issues with the relevant statute of limitations. Thus, under the new memorandum's guidance, DOJ prosecutors in every case now must assess whether companies have met the standards on timely disclosure of evidence when determining eligibility for cooperation credit.
Because what may constitute the most important evidence about individual culpability often varies from case to case, there are no set standards articulated in the new memorandum for the timeliness assessment. In her speech, DAG Monaco stated, as one example, that "[i]f a cooperating company discovers hot documents or evidence, its first reaction should be to notify the prosecutors" – as opposed to delaying disclosure for purposes of internal assessment or "strategic" reasons. In the future, therefore, there will be added pressure for companies to disclose a broader array of potentially key facts and pieces of evidence to the DOJ without a full assessment of their overall import to avoid being accused of any "undue delay" in disclosure. Given that FCPA investigations increasingly involve authorities in other countries, companies also will be forced to consider the costs and benefits of ever-earlier disclosure to non-U.S. enforcement agencies, as well – such as the investigation costs of potential earlier involvement of local counsel or potential fallout if the company's disclosures to the various agencies are not aligned.
Alignment of Corporate and Individual Dispositions
In another sign of the priority of prosecutions of individuals, the new Monaco memorandum directs DOJ prosecutors to "strive to complete investigations into individuals – and seek any warranted individual criminal charges – prior to or simultaneously with the entry of a resolution against the corporation." If DOJ prosecutors decide to complete the corporate investigation prior to completing the investigation of potentially culpable individuals, they must obtain specific approval from the relevant AAG or U.S. Attorney, and must submit an internal document outlining their reasons, the status of those individual cases, and an "investigation plan" for completing those cases prior to any running of the statute(s) of limitations as part of that approval request.
While parallel corporate and individual investigations have always been a DOJ goal, the reality in the FCPA world has been that individual cases have sometimes significantly lagged behind corporate dispositions related to the same facts. One notable example of this issue involved the case against former CEO of Braskem. Braskem entered a plea agreement with the DOJ in December 2016; the DOJ finally unsealed its indictment against the former CEO in November 2019, and secured a guilty plea from the defendant in April 2021. Many factors can play into the timing of such investigations, including the need for the DOJ to prepare for (and sometimes go to) trial in cases involving individuals. In her speech, DAG Monaco stated that the goal of this new guidance was to "push prosecutors and corporate counsel alike to feel they are 'on the clock' to expedite investigations, particularly as to culpable individuals."
This guidance will likely affect the traditional interplay between corporate and individual counsel in investigations and could inhibit the traditional types of "common interest" cooperation between them. There is a possibility that the new guidance could make corporate resolutions more difficult, as counsel to individuals assess whether their clients should cooperate in, for example, both corporate and DOJ interviews. As potential interests diverge, corporate counsel and their clients may face increased difficulties in managing their overall cooperation with the DOJ for corporate credit and may need to take more draconian measures against relevant individuals (such as financial penalties or termination for non-cooperation) that could disrupt business operations and increase investigation costs.
Coordination with Non-U.S. Investigations of Individuals
Increasingly in the FCPA space, there may be parallel investigations by the DOJ and non-U.S. authorities of potentially culpable individuals. As the new memorandum notes, the "Principles of Federal Prosecution recognize that effective prosecution in another jurisdiction may be grounds to forego [U.S.] federal prosecution." The key question, however, is whether such a non-U.S. enforcement action is an "effective" prosecution. The new memorandum reiterates the factors cited in the Justice Manual (§ 9-27.240) for determining such effectiveness: "(1) the strength of the other jurisdiction's interest in the prosecution; (2) the other jurisdiction's ability and willingness to prosecute effectively; and (3) the probable sentence and/or other consequences if the individual is convicted in the other jurisdiction." The Justice Manual focuses on this analysis for potential actions by "state, local, or tribal law enforcement authorities" but the new memorandum clarifies that these factors also are determinative for assessing actions by non-U.S. jurisdictions.
Considering the potential effect of the Justice Manual analysis on bringing potential cases against individuals subject to non-U.S. investigations, the new memorandum clarifies that "prosecutors should not delay commencing federal prosecution to the extent that delay could prevent the [U.S.] government from pursuing certain charges (e.g., on statute of limitations grounds), reduce the chance of arresting the individual, or otherwise undermine the strength of the [U.S.] federal case." The memorandum further states, "prosecutors should not be deterred from pursuing appropriate charges just because an individual liable for corporate crime is located outside the United States." Many recent DOJ corruption-related cases against individuals have involved non-U.S. nationals – many of whom are likely subject to potential prosecution by other countries. The effect of these clarifications will likely be to continue that trend.
Standards for Evaluating Effect of Past Corporate Misconduct
As DAG Monaco acknowledged in her speech, perhaps the most controversial guidance in the October 2021 memorandum was that "prosecutors are directed to consider all [prior] misconduct by the corporation" rather than "similar conduct," which had been the standard for many years. The new memorandum reinforces the requirement that all prior conduct should be considered but, in response to CCAG input, establishes that (in Monaco's words in her speech) "not all instances of prior misconduct are created equal."
The new memorandum states that "prosecutors should, among other factors, consider the corporation's record of past misconduct, including prior criminal, civil, and regulatory resolutions, both domestically and internationally." The memorandum assigns the most weight to recent U.S. criminal resolutions (defined as less than 10 years old) and "prior wrongdoing involving the same personnel or management as the current misconduct." Civil and regulatory resolutions in the past five years are also noted as particularly relevant. "Dated" cases (such as criminal cases that are more than 10 years old) "should be accorded less weight." Despite establishing these time periods, the memorandum states that "repeated misconduct may be indicative of a corporation that operates without an appropriate compliance culture or institutional safeguards."
Other weighting factors discussed in this section of the new memorandum include:
- Less weight for "[p]rior resolutions that involved entities that do not have common management or share compliance resources with the entity under investigation"
- Less weight for prior resolutions that "involved conduct that is not chargeable as a criminal violation under U.S. federal law"
- Less weight for prior resolutions involving "misconduct committed by an acquired entity if the acquired entity has been integrated into an effective, well-designed compliance program at the acquiring corporation and if the acquiring corporation addressed the root cause of the prior misconduct… and full and timely remediation occurred within the acquired entity before the conduct currently under investigation"
- "[I]f a corporation operates in a highly regulated industry, a corporation's history of regulatory compliance or shortcomings should likely be compared to that of similarly situated companies in the industry"
Other factors listed for consideration include whether the conduct under investigation occurred while the company was under probation or "was subject to supervision, monitorship, or other obligation imposed by the prior resolution." This issue is likely to receive increased attention in current ongoing and future matters. Prosecutors should also evaluate "what remediation was taken to address the root causes of prior misconduct, including employee discipline, compensation clawbacks, restitution, management restructuring, and compliance program upgrades" – a list that expands on past discussions of remediation.
Neither the new memorandum nor related DOJ speeches further elaborate on the continuing inclusion of prior international "criminal, civil, or regulatory enforcement actions" against the company or any of its affiliates as a factor, including as to the weight given. In theory, such prior resolutions could make a significant impact on the overall assessment, as the language substantially expands the universe of a company's "record" of behavior under consideration to include actions taken by foreign governments related to laws different in substance from those in the U.S. or under legal systems that do not grant the same due process or other considerations to companies that are the subjects of those actions.
Finally, the new memorandum makes clear that "[m]ultiple non-prosecution or deferred prosecution agreements are generally disfavored, especially where the matters at issue involve similar types of misconduct; the same personnel, officers, or executives; or the same entities." In her speech, DAG Monaco reiterated, "[c]ompanies cannot assume that they are entitled to an NPA or a DPA, particularly when they are frequent flyers. We will not shy away from bringing charges or requiring guilty pleas where facts and circumstances require."
The DOJ is aware that this message could very well deter companies with past resolutions from disclosing new issues, however. The DOJ's response to this legitimate concern will be familiar to FCPA compliance professionals – a reiteration of the potential benefits of timely voluntary disclosures, cooperation, and remediation.
DOJ Assessment of Credit for Timely Self-Disclosures and Cooperation
The new Monaco memorandum does not supersede the FCPA Corporate Enforcement Policy (CEP) – that policy still governs the DOJ Fraud Section's handling of corporate investigations. The new memorandum directs those DOJ components that do not have such formal policies incentivizing self-disclosures to implement such policies consistent with the standards outlined in the memorandum.
First, such DOJ policies must confirm that "absent the presence of aggravating factors, the Department will not seek a guilty plea where a corporation has voluntarily self-disclosed, fully cooperated, and timely and appropriately remediated the criminal conduct." Note that the CEP states that positive findings on these three factors should lead to a declination. However, the CEP also states that "criminal recidivism" is an aggravating factor that could preclude a declination, which, when added to the new memorandum's guidance on the effects of recidivism noted above, raises potential risks related to repeated voluntary disclosures in the FCPA area.
AAG Polite directly addressed these concerns in his speech, asking, "what would be your incentive to voluntarily self-disclose when your company has a long history of prior misconduct?" His answer is that "even under those circumstances…[there is] a "powerful incentive to make a timely self-disclosure…[b]ecause it could make all the difference between a DPA and a guilty plea resolution, assuming that the company has also cooperated, and timely and appropriately remediated the criminal conduct." DAG Monaco also put forward the "value proposition" of disclosure, asserting, "the math is easy: voluntary self-disclosure can save a company hundreds of millions of dollars in fines, penalties, and costs" and "[v]oluntary self-disclosure cases have resulted in declinations and non-prosecution agreements with no significant criminal penalties."
The new memorandum further directs that the DOJ component policies must provide "guidance on what circumstances would constitute such aggravating factors, [and] examples may include misconduct that poses a grave threat to national security or is deeply pervasive throughout the company." In his speech, AAG Polite noted that "going forward, in the Criminal Division, those aggravating factors we will consider will include, but are not limited to, involvement by executive management of the company in the misconduct, significant profit to the company from the misconduct, or pervasive or egregious misconduct." This list (along with recidivism, which is referenced elsewhere in AAG Polite's speech) is a restatement of the existing aggravating factors in the CEP – so it is not a change in existing policy in the FCPA area.
Despite the assurances from senior DOJ officials, companies with a history of past violations may well remain wary of disclosing new issues for fear of more serious consequences than might have been the case under past DOJ policies. There is some comfort in the new memorandum's language that correctly notes, "timely voluntary disclosures do not simply reveal misconduct at a corporation; they can also reflect that a corporation is appropriately working to detect misconduct and takes seriously its responsibility to instill and act upon a culture of compliance." However, DOJ likely will have to back up its assurances with publicly verifiable, concrete steps in specific corporate enforcement actions to ease such concerns more fully – something that DAG Monaco acknowledged in her speech when she stated, "I expect that resolutions over the next few months will reaffirm how much better companies fare when they come forward and self-disclose."
The second requirement that the new Monaco memorandum sets out for DOJ policies on voluntary disclosures is that the DOJ "will not require the imposition of an independent compliance monitor for a cooperating corporation that voluntarily self-discloses the relevant conduct if, at the time of resolution, it also demonstrates that it has implemented and tested an effective compliance program."
Under the existing FCPA CEP, voluntary disclosure, cooperation, and the presence of an effective compliance program should lead (absent specific aggravating circumstances) to a declination, and thus no Monitor. In this way, the new memorandum's requirement as to Monitors does not necessarily represent a change in DOJ policy. That said, the new memorandum's guidance for the first time formally links the imposition of a Monitor to factors other than the state of a company's remediation (specifically, the effectiveness of a company's compliance program and related controls) and the underlying specific facts of a case. The DOJ's previous formal pronouncements on the use of Monitors – the Morford memorandum (2008) and the Benczkowski memorandum (2018) – did not cite disclosure or cooperation in their discussions of the analysis of whether the imposition of a Monitor was appropriate.
While the announced guarantee of no monitorship in cases where a company has made an effective self-disclosure is clearly meant to be an incentive for disclosure, there is a question as to whether tying a monitorship to factors not directly related to the state of a company's compliance program or its underlying risks could create difficulties for future Monitors. Historically, the DOJ has been careful to note that monitorships are not meant to be punitive in recognition of the reality that companies and their executives can easily make such an assumption. Under the new guidance, a company that does not disclose and that receives a Monitor in any disposition could assume that the monitorship is a negative consequence of non-disclosure. Such a conclusion could impact the effectiveness of the monitorship by creating resentment and motivating a lack of cooperation and executive commitment to the goals of the Monitor and the company.
Finally, the new Monaco memorandum summarizes existing DOJ policies, including the FCPA CEP, that define assessments and benefits of full cooperation by companies. The memorandum notes that the DOJ will make additional changes to the Justice Manual in the future on these points to ensure cross-department consistency, including as to how to assess the effect of foreign data privacy and related laws that can prevent or impede companies from turning over certain information to the DOJ in investigations. Companies facing FCPA investigations have managed these data privacy challenges for years, and the memorandum does not alter the DOJ's past positions on this issue. However, we will monitor the future Justice Manual changes for any signs of new direction on these important issues.
DOJ Assessments of Compliance Program Effectiveness – "Compensation Structures" and Management of "Personal Devices" and "Third Party Applications"
The new Monaco memorandum summarizes and cites past DOJ guidance on the effectiveness of corporate compliance programs, including the Criminal Division's guidance, which was last updated in 2020. The discussion reiterates that, in the context of determining an appropriate disposition to an investigation, the DOJ should "assess the adequacy and effectiveness of the corporation's compliance program at two points in time: (1) the time of the offense; and (2) the time of a charging decision" and that "[t]he same criteria should be used in each instance." The memorandum identifies two "additional metrics relevant to prosecutors' evaluation of a corporation's compliance program and culture."
The first "additional metric" focuses on the role of "compensation structures" – both disciplinary measures and incentives that support compliant behaviors – in a company's culture of compliance. Such structures, especially on the discipline side, have long been considered a key element of an effective corporate compliance program by the DOJ and under many other national and international standards, such as the Organisation for Economic Cooperation and Development's (OECD) recently updated "Good Practice Guidance on Internal Controls, Ethics, and Compliance" in its 2021 Anti-Corruption Recommendation.
The DOJ's existing compliance program effectiveness guidance (which cites the role of "appropriate incentives" in the U.S. Sentencing Guidelines (U.S.S.G. § 8B2.1(b)(5)(C))) has included questions as to "[h]ow the company incentivize[s] compliance and ethical behavior" and whether "there [have] been specific examples of actions taken (e.g., promotions or awards denied) [or bonuses, cited elsewhere] as a result of compliance and ethics considerations." The new Monaco memorandum builds on this language by stating that "[p]rosecutors should…consider whether a corporation' s compensation systems provide affirmative incentives for compliance-promoting behavior." The memorandum notes that such "affirmative incentives" could include "the use of compliance metrics and benchmarks in compensation calculations and the use of performance reviews that measure and reward compliance-promoting behavior, both as to the employee and any subordinates whom they supervise." As the DOJ is aware, many companies have already deployed these types of incentives, though the details and execution can vary widely based on many factors. The formal addition of this metric will mean that companies that have resisted these types of incentives in the past may want to reconsider such incentives' potential benefits for managing enforcement risks.
The memorandum also expands on the assessment of disciplinary measures, noting that "prosecutors should examine whether compensation systems are crafted in a way that allows for retroactive discipline, including through the use of [compensation] clawback measures, partial escrowing of compensation, or equivalent arrangements." Further, the memorandum instructs prosecutors to evaluate whether and how a company has "taken affirmative steps to execute on such agreements and clawback compensation previously paid to current or former executives whose actions or omissions resulted in, or contributed to, the criminal conduct at issue" (emphasis added). In a speech at Global Investigation Review's GIR Live event on September 21, 2022, Principal Associate DAG Marshall Miller discussed the DOJ's expectations as to clawbacks, stating, "[w]hat we expect now in 2022 is that companies will have robust and regularly deployed clawback programs, [as] [a]ll too often we see companies scramble to dust off and implement dormant policies once they're in the crosshairs of an investigation." He also noted that prosecutors would assess whether "the company [is] targeting bonuses to employees and supervisors who set the right tone."
This is the first instance of the DOJ formally citing specific compensation measures such as clawbacks or escrowing as a key component of an effective compliance program in the FCPA space (the 2019 Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations note "bonuses clawed back" as an example of "actions taken…because of compliance considerations). It is unclear how extensively the DOJ has considered the potential challenges for companies to implement such new features as clawbacks in their existing executive compensation systems (especially as to former executives), given the complex rules that govern such systems and the market dynamics that drive such compensation at senior levels. Perhaps a sign of the awareness of these difficulties is that the new Monaco memorandum directs the Criminal Division to "develop further guidance by the end of  on how to reward corporations that develop and apply compensation clawback policies, including how to shift the burden of corporate financial penalties away from shareholders – who in many cases do not have a role in misconduct – onto those more directly responsible." In his speech, AAG Polite noted that, during this process, the Division will "get inputs" from "experts on executive compensation."
Statements by DAG Monaco at the time of her speech indicate that the DOJ's focus on clawbacks is being coordinated with recent U.S. Securities and Exchange Commission (SEC) statements regarding increased enforcement of Sarbanes-Oxley's section 304. This development will be discussed further in future alerts from our Securities Enforcement practice. This is an issue that will bear further analysis, especially as the DOJ undertakes such evaluations in future cases.
The second "additional metric" directs DOJ prosecutors to "consider whether the corporation has implemented effective policies and procedures governing the use of personal devices and third-party messaging platforms [such as WhatsApp or, perhaps more challenging, the Chinese WeChat] to ensure that business-related electronic data and communications are preserved." The new Monaco memorandum notes further that "[a]s a general rule, all corporations with robust compliance programs should have effective policies governing the use of personal devices and third-party messaging platforms for corporate communications, should provide clear training to employees about such policies, and should enforce such policies when violations are identified."
This requirement is not new, but remains a challenge for companies to implement, especially with regard to non-U.S. applications such as WeChat and as other countries' data privacy and national security laws and rules continue to develop and potentially cover data on personal devices. In recognition of these challenges, the memorandum directs the Criminal Division "to further study best corporate practices regarding use of personal devices and third-party messaging platforms and incorporate the product of that effort into the next edition of its Evaluation of Corporate Compliance Programs, so that the Department can address these issues thoughtfully and consistently."
Use and Management of Independent Compliance Monitors
The new Monaco memorandum's section on Independent Compliance Monitors summarizes current DOJ policies, incorporating by reference earlier DOJ guidance, where applicable. The memorandum's introduction notes that the DOJ intends to update the Justice Manual with "new sections on independent corporate monitors" and this section is likely the first draft for those sections. The memorandum contains sub-sections on (1) a "non-exhaustive list of factors when evaluating the necessity and potential benefits of a monitor"; (2) selection of monitors; and (3) "continued review of monitorships." We will cover only a selection of the most notable aspects.
The memorandum confirms that "[a]s set forth in the October 2021 [Monaco memorandum], Department prosecutors will not apply any general presumption against requiring an independent compliance monitor…as part of a corporate criminal resolution, nor will they apply any presumption in favor of imposing one"; "[r]ather, the need for a monitor and the scope of any monitorship must depend on the facts and circumstances of the particular case." Most of the factors listed by the memorandum to evaluate the need for a Monitor are well-established by prior DOJ guidance. There are several enumerations or additions of interest, including:
- As noted above, a new factor on corporate self-disclosure
- "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)" (emphasis added)
- "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" (emphasis added)
- "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" (emphasis added)
- "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"
- "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" (emphasis added)
The main changes to the monitor selection process include an expansion of transparent, consistent procedures across the entire DOJ (the 2018 Benczkowski memorandum's selection section is cited as still relevant for FCPA cases); a reiteration that "monitor selection processes shall be conducted in keeping with the Department's commitment to diversity and inclusion"; and a requirement confirming that "any agreement imposing a monitorship should describe the reasoning for requiring a monitor."
The final sub-section on DOJ management of monitorships formalizes and emphasizes DOJ prosecutors' role throughout the project. In her speech, DAG Monaco stated that DOJ prosecutors "are not regulators, nor do we aspire to be...[b]ut where we impose a monitor, we recognize our obligations to stay involved and monitor the monitor." Historically, DOJ involvement has varied based on a number of factors, including the specific circumstances of the underlying matter, the involvement of other agencies, such as the SEC, and resource and time issues.
Among the key directives are that:
- "Prosecutors should receive regular updates from the monitor about the status of the monitorship and any issues presented" and "should also regularly receive information about the work the monitor is doing to ensure that it remains tailored to the workplan and scope of the monitorship"
- "[P]rosecutors should consider the reasonableness of the monitor's review, including, where appropriate, issues relating to the cost of the monitor' s work"
- As has been the case in past specific matter dispositions, prosecutors should evaluate whether the scope and term of the monitorship should be shortened in light of faster-than expected progress by the company, or lengthened in light of new issues or "identified concerns" over the company's progress.
The final section of the new Monaco memorandum discusses cross-DOJ requirements for "[t]ransparency regarding the Department's corporate criminal enforcement priorities and processes – including its expectations as to corporate cooperation and compliance, and the consequences of meeting or failing to meet those expectations." The section sets out various elements for incorporation into any DOJ "agreement to resolve corporate criminal liability" including "an agreed-on statement of [relevant] facts" and "a statement of relevant considerations that explains the Department's reasons for entering into the agreement." In the FCPA space, DOJ DPAs and NPAs, as well as declinations under the CEP, have traditionally included these elements. The memorandum also directs that "[a]bsent exceptional circumstances, corporate criminal resolution agreements will be published on the Department's public website."
Miller & Chevalier will continue to monitor the changes discussed in the new Monaco memorandum, including by analyzing the indicated future changes to the Justice Manual and further efforts by the Criminal Division to create guidance on the key issues discussed above.
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