DOJ gives compliance chiefs powerful new ally
Friday, December 22, 2017 at 7:28AM
Richard L. Cassin in Cooperation, Enforcement Policy, Pilot Program, Self Reporting

The DOJ's FCPA Pilot Program -- giving companies declinations or reduced penalties if they self disclose, cooperate, and disgorge profits -- has now been enshrined in the U.S. Attorneys' Manual. It's a permanent guideline for prosecutors.

What it means for companies is more certainty. If they discover potential or actual FCPA violations, they can make better decisions about how and when to deal with the DOJ.

Beyond that, there's more reason than ever for companies to have strong compliance programs. As George Terwilliger said in a post for the FCPA Blog,

. . . to benefit from the policy the company will have to demonstrate that its compliance commitment is real and its compliance program meets standards articulated by the government, even if scaled to the size and complexity of the business entity employing it. 

One of the ten factors the U.S. Attorneys' Manual lists for a decision about the proper treatment of a corporate target is the "existence and effectiveness of the corporation's pre-existing compliance program (see USAM 9-28.800)."

For compliance chiefs, the DOJ's FCPA enforcement policy is now a great new ally. The benefit of a robust compliance program is no longer debatable. It will protect the company from prosecution (although not the individuals responsible for committing or covering up FCPA offenses).

There's still not complete certainty for companies that self disclose potential violations. The DOJ can't fix that by itself. It can't overturn the common law doctrine of respondeat superior. Only Congress or the courts could do that. That's why the U.S. Attorneys' Manual still says:

The existence of a corporate compliance program, even one that specifically prohibited the very conduct in question, does not absolve the corporation from criminal liability under the doctrine of respondeat superior. See United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th Cir. 1983).

Notwithstanding that necessary legal hedging, there's still a clear benefit to having an effective compliance program before trouble happens.

Aside from the company, who benefits?

All employees. Those working under a robust compliance program are less likely to pay bribes or cover them up, and perhaps face firing, prosecution, and jail.

More and better compliance also protects every honest employee from a compliance catastrophe that might damage or destroy the company and their livelihood.

Employees also benefit from a clean corporate environment  . . . emotionally. Being proud of their workplace and what they do there beats the stress and shame of working in a den of thieves.

Prosecuting corrupt companies is still going to happen, and it should. Holding the worst corporate wrongdoers accountable serves the greater good. It deters crime through incapacitation. It can rehabilitate the offender and satisfy the victims' need for retribution.

But punishing crime means the crime has already occurred. It's better to prevent the crime in the first place. That's what compliance is supposed to do.

The DOJ's now-permanent FCPA enforcement policy is designed to encourage compliance. That's something to cheer about.

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

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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