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« Eric Lochner on customer due diligence: UBOs in diapers | Main | Spinelli and Pilosio: Why is the construction industry so vulnerable to corruption? »
Thursday
May102018

DOJ rolls out new policy against ‘piling on’ 

Deputy Attorney General Rod Rosenstein announced a new policy Wednesday that encourages coordination among DOJ departments and other enforcement agencies to avoid multiple penalties for the same conduct.

The aim is to avoid unfair duplicative penalties while keeping good relationships with law enforcement partners in the United States and abroad, Rosenstein said.

He was talking to the New York City White Collar Crime Institute.

He said the DOJ should "discourage disproportionate enforcement of laws by multiple authorities."

Piling on by enforcement agencies has become more common because modern business operations regularly span jurisdictions and borders, Rosenstein said.

"Whistleblowers routinely report allegations to multiple enforcement authorities, which may investigate the claims jointly or through their own separate and independent proceedings."

Piling on hurts companies by creating uncertainty. It's harder for them to make "full and final settlements."

"We need to consider the impact on innocent employees, customers, and investors who seek to resolve problems and move on," Rosenstein said.

The new policy against piling on will be incorporated into the U.S. Attorneys’ Manual.

Rosenstein said it's "another step towards greater transparency and consistency in corporate enforcement."

"To reduce white collar crime, we need to encourage companies to report suspected wrongdoing to law enforcement and to resolve liability expeditiously," he said.

The new policy has four key features.

First, the fed's criminal enforcement authority shouldn't be used against a company for purposes unrelated to the investigation and prosecution of a possible crime. "We should not employ the threat of criminal prosecution solely to persuade a company to pay a larger settlement in a civil case," Rosenstein said.

Second, the new policy directs DOJ lawyers and groups in different departments or offices "to coordinate with one another, and achieve an overall equitable result." That might mean crediting and apportioning financial penalties, fines, and forfeitures to avoid disproportionate punishment.

Third, DOJ lawyers, when possible, should coordinate with other federal, state, local, and foreign enforcement authorities that are working to resolve a case with a company for the same misconduct.

Finally, the new policy sets out factors DOJ lawyers can evaluate to determine if or when multiple penalties "serve the interests of justice in a particular case."

"Sometimes, penalties that may appear duplicative really are essential to achieve justice and protect the public," Rosenstein said.

Factors to consider when evaluating possible multiple penalties include:

  • The egregiousness of the wrongdoing
  • Statutory mandates regarding penalties
  • The risk of delay in finalizing a resolution, and
  • The adequacy and timeliness of a company’s disclosures and cooperation with the DOJ.

*     *     *

"Cooperating with a different agency or a foreign government is not a substitute for cooperating with the Department of Justice," Rosenstein said.

"And we will not look kindly on companies that come to the Department of Justice only after making inadequate disclosures to secure lenient penalties with other agencies or foreign governments."

He said it's not always possible for the DOJ to coordinate with other agencies, particularly those outside the United States.

"The timing of other agency actions, limits on information sharing across borders, and diplomatic relations between countries are some of the challenges we confront that do not always lend themselves to easy solutions," he said.

As a positive first-time example, he mentioned the DOJ's coordination with Singapore on the FCPA enforcement action against Keppel in December.

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Deputy Attorney General Rod Rosenstein's full remarks to the New York City Bar White Collar Crime Institute on May 9, 2018 are here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Reader Comments (5)

I'm sorry, but I have to strongly disagree with Mr. Rosenstein. Being aggressive and piling it on, as much as possible, is exactly what is needed now. As someone who has personally witnessed the egregious corruption by a multinational, at the highest level of the organization, and to see that company use every "legal" trick in the book to lower a proposed fine from the SEC and DOJ (successfully), including the enlistment of members of its own national government to lobby Washington, I say....pile it on until it hurts. Being "nice" is something to consider when we start seeing a dramatic decrease in corruption.
May 10, 2018 | Unregistered CommenterPile it On
I disagree with the last comment. The government should always seek a fair and equitable resolution to every matter it handles - whether criminal or civil. Treating citizens in an inequitable manner only serves to undermine our' faith in the government. This is the basis of the Black Lives Matter movement and its the basis of the criticism of the Mueller investigation. The government is not a private party seeking to "win". Its an instrument of the people with the power to crush people and entities without a trial. Every prosecutor should have one goal and only one goal in every case they handle and that's doing justice. We all deserve no more and no less.
May 10, 2018 | Unregistered CommenterAndrew Levetown
As an attorney and compliance advocate I find myself agreeing ...with both comments. From a policy standpoint it is true that companies are oftentimes very cynical about getting their way and so powerful for some of them, that it seems only the fear of paying huge fines can stop them. When I talk about compliance in a country like France I have to insist on the fact that corporate officers do go to jail on corruption grounds in the United States (and I still get a lot of shrugs).
However, Justice, when it comes to punishing individuals or companies should never be lost in the objectives it seeks to attain on a bigger scale. It should always be mindful, and reminded, of the individual's or the company's particular circumstances. Otherwise Justice is not human anymore and could just as well be rendered by machines.
I disagree with Mr. Levetown's comment. A prosecutor’s job is to pursue the case as aggressively as possible, and in accordance with the law, just as a defense attorney would vigorously defend her/his client. Providing DOJ lawyers with guidance on how to play nice-nice and seek ways to reduce what are perceived to be overburdensome and unpredictable penalties is ridiculous (with all due respect).

Corruption is at the root of other more serious crimes around the world, as recognized by the U.S. State Department (https://www.state.gov/j/inl/focus/combatting/governance/), and it needs to be fought with strength and purpose. I have a suggestion; if companies want more predictability, then don’t bribe.

Also, I would like to see more senior executives going to jail, because as history has shown us the vast majority of corruption is committed at the very top of the organization. When we start seeing more executives going to jail, then we might want to consider restructuring the penalties.

I do believe in fairness, which means that the millions of people around the world who suffer the ramifications of bribery and corruption every day should see “justice” served.
May 10, 2018 | Unregistered CommenterPile it On
Rosenstein made the following interesting comments:

"We need to consider the impact on innocent employees, customers, and investors who seek to resolve problems and move on,"

First, the fed's criminal enforcement authority shouldn't be used against a company for purposes unrelated to the investigation and prosecution of a possible crime. "We should not employ the threat of criminal prosecution solely to persuade a company to pay a larger settlement in a civil case,"
__________________________________________

Federal sentencing guidelines have different rules for corporate crime versus individual law-breakers. Personally, I know of no corporations that have committed crimes. In fact, a "corporation" is simply a large group of individuals, some of which are criminals, and should be prosecuted when a "crime" occurs.

Our Federal Justice system has elected to give corporate criminals a free pass out of jail for a fee, often a fee which simply compensates the agency itself, and no one else. It would appear that the Federal agency is bribing "corporations" through the payment of fines rather than putting the wrongdoers in jail. The OCC for example, is "funded" by the penalties they assess. The victims seldom, if ever, receive reimbursement for their losses.

Congress has to take the responsibility to correct our Justice system. Recent events have shown the likely existence of corruption within the walls of our Justice system, fed by the Non-Prosecution Agreements and Deferred Prosecution Agreements rendered in exchange for a prison term. The Sentencing guidelines must be re-written to make ALL criminals accountable for their crimes, regardless of whether they are Corporate executives or not.
May 13, 2018 | Unregistered CommenterDennis Myhre, AIC
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