During remarks this week at the American Conference Institute’s International Conference on the Foreign Corrupt Practices Act, Leslie Caldwell, assistant attorney general for the Justice Department’s Criminal Division, provided some additional transparency regarding charging decisions in corporate prosecutions.
“Greater transparency benefits everyone,” said Caldwell. “[I]f companies know the consideration they are likely to receive from self-reporting or cooperating in the government’s investigation, we believe they will be more likely to come in early, disclose wrongdoing, and cooperate.”
Even though the Justice Department often is limited to how much it can disclose about investigations and prosecutions, particularly for investigations in which no charges are brought, “we are trying to be clearer about our expectations in corporate investigations and the bases for our corporate pleas and resolutions,” Caldwell said.
During her remarks, Caldwell cautioned that in a Foreign Corrupt Practices Act case, in particular, “Cooperation is only one element of mitigation.” A company that wishes to be eligible for the maximum mitigation credit in an FCPA case must do three things:
Voluntarily self-disclose. This means that the company “within a reasonably prompt time after becoming aware of an FCPA violation” must disclose the relevant facts known to it, including all relevant facts about the individuals involved in the conduct.
To qualify, this disclosure must occur before an investigation is underway or imminent. “Disclosures that the company is already required to make by law, agreement or contract do not qualify,” she said.
Fully cooperate. “Companies seeking credit must affirmatively work to identify and discover relevant information about the individuals involved through independent, thorough investigations,” said Caldwell. “Companies cannot just disclose facts relating to general corporate misconduct and withhold facts about the individuals involved, and internal investigations cannot end with a conclusion of corporate liability, while stopping short of identifying those who committed the underlying conduct.”
Full cooperation also includes “providing timely updates on the status of the internal investigation, making officers and employees available for interviews—to the extent that is within the company’s control—and proactive document production, especially for evidence located in foreign countries,” she said.
Timely and appropriately remediate. “Remediation includes the company’s overall compliance program as well as its disciplinary efforts related to the specific wrongdoing at issue,” Caldwell said. “For example, when examining remediation we consider whether and how the company has disciplined the employees involved in the misconduct. We also examine the company’s culture of compliance including an awareness among employees that any criminal conduct, including the conduct underlying the investigation, will not be tolerated.”
“The more aggravating the scope or seriousness of the criminal activity, or the worse the company’s history, the more important it is for a company seeking leniency to present the strongest possible mitigation,” Caldwell said. “Companies that fail to self-disclose but nonetheless cooperate and remediate will receive some credit, but that credit for cooperation and remediation will be measurably less than it would have been had the company also self-reported."