During remarks at the Global Investigations Review conference, Leslie Caldwell, assistant attorney general for the Justice Department’s Criminal Division, offered some additional insight to companies on the Yates Memo regarding individual accountability for corporate wrongdoing.

As Compliance Week previously reported, the crux of the Justice Department’s new policy memo issued on Sept. 9 is this: “If a company wants any consideration for its cooperation, it must give up the individuals, no matter where they sit within the company.” Furthermore, to qualify for any cooperation credit, corporations must provide “all relevant facts” relating to the individuals responsible for the misconduct.

“This means that companies seeking cooperation credit must affirmatively work to identify and discover relevant information about culpable individuals through independent, thorough investigations,” Caldwell said. “Companies cannot just disclose facts relating to general corporate misconduct and withhold facts about the responsible individuals, and internal investigations cannot end with a conclusion of corporate liability, while stopping short of identifying those who committed the criminal conduct.” 

During her remarks, Caldwell acknowledged the challenges companies sometimes face in gathering information. “We understand that some investigations—despite their thoroughness—will not bear fruit,” she said.

“Where a company truly is unable to identify the culpable individuals following an appropriately tailored and thorough investigation, but provides the government with the relevant facts and otherwise assists us in obtaining evidence, the company will be eligible for cooperation credit,” Caldwell added. “We will make efforts to credit, not penalize, diligent investigations.” 

Companies should be prepared to prove, however, that they did their best to uncover evidence. “We will carefully scrutinize and test a company’s claims that it could not identify or uncover evidence regarding the culpable individuals, particularly if we are able to do so ourselves,” said Caldwell.

She acknowledged, however, that the Justice Department can often obtain evidence that a company cannot, such as evidence from third parties not available to the company. She further acknowledged that a company may not be able to interview former employees who refuse to cooperate in a company investigation.

“Those same employees may provide information to us, whether voluntarily or through compulsory process,” Caldwell said. Likewise, the Justice Department may at times, for strategic reasons, “ask that the company stand down from pursing a particular line of inquiry,” she said. “If so, the company will not be penalized for failing to identify facts subsequently discovered by government investigators.”

Scope of Investigations

According to Caldwell, companies should not be concerned about the new policy guidance requiring companies to conduct ever more extensive—and expensive—investigations to obtain cooperation credit. “As we have said before, we are not asking companies to boil the ocean every time they find evidence of wrongdoing,” she said. “We expect investigations to be thorough and tailored to scope of the wrongdoing.”

Caldwell also encouraged companies and their counsel to call the Justice Department if they have any questions. “While we cannot and will not direct a company’s internal investigation, we remain willing to maintain an open dialogue about our interests and our concerns,” she said. “An open and transparent dialogue between company counsel and the prosecutors should save companies from aimless and expensive investigations.”

Caldwell further stressed that the Justice Department doesn’t intend to outsource its investigations of corporate wrongdoing to companies. “[W]e will not sit idle, waiting for a company to conduct or complete its investigation,” she said. “Regardless of a company’s cooperation, federal agents and prosecutors will conduct thorough investigations.” 

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