An official from the Department of Justice (DOJ) spoke to the value of deferred prosecution agreements (DPAs) to resolve corporate misconduct amid renewed criticism directed toward the agency’s 2021 agreement with Boeing.
Lisa Miller, deputy assistant attorney general in the DOJ’s Criminal Division, said during a speech delivered Thursday to the University of Southern California Gould School of Law the agency’s corporate enforcement policies and enforcement actions “transparently focus upon incentivizing companies to implement effective compliance programs, and for the same reason, reward voluntary self-disclosure, cooperation, and remediation of the causes of misconduct.”
Obligations corporations must fulfill to receive DPAs instead of guilty pleas include:
- Voluntarily disclosing misconduct to the Criminal Division;
- Improving compliance programs;
- Fully cooperating with DOJ investigators;
- Certifications signed by the chief executive officer and chief compliance officer; and
- When required, an independent compliance monitor.
“Our prosecutors continue to police companies’ adherence to resolutions throughout their terms, and if companies fail to follow through, they face additional penalties and reputational harm,” Miller said. “In each case, our opportunity—and challenge—is to foster deterrence and accountability so companies don’t just adopt a ‘cost-of-doing-business’ mentality with respect to our investigations and then return to business as usual after a corporate resolution.”
In January 2021, Boeing entered into a three-year, $2.5 billion DPA with the DOJ to resolve a criminal charge the commercial aerospace manufacturer concealed critical safety information about its 737 MAX airplane from federal aviation officials. Two 737 MAX planes crashed immediately after takeoff in 2018 and 2019 and resulted in 346 deaths because of a problem with instrumentation that impacted the planes’ flight control system.
The families of the victims took exception to the DPA, claiming in a filing with a federal court the agreement failed to hold Boeing accountable for its actions that led to the crashes. The families demanded a federal judge revisit the requirements of the settlement; last week, the judge ruled he did not have the authority to alter the deal’s terms. He acknowledged “increasing and perhaps legitimate criticism” of DPAs in his decision.
“In each case, our opportunity—and challenge—is to foster deterrence and accountability so companies don’t just adopt a ‘cost-of-doing-business’ mentality with respect to our investigations and then return to business as usual after a corporate resolution.”
Lisa Miller, Deputy Assistant Attorney General, DOJ Criminal Division
In her speech, Miller defended the process by which the DOJ considers meting out punishments for corporate malfeasance.
She pointed to the DPA agreed to with Swiss technology company ABB as an example. ABB had been found to have violated the Foreign Corrupt Practices Act by paying bribes in South Africa and had a history of previous FCPA violations. In its DPA with the DOJ, the company was not judged on its historic violations but instead on the strength of its remediation and enhanced compliance program.
“[D]espite ABB’s recidivism, our prosecutors carefully weighed these facts and concluded that a DPA, rather than a parent-level plea, would be appropriate,” Miller said.
Regarding recent changes to the DOJ’s corporate enforcement policy, Miller said the agency might decline to prosecute a wider range of cases. “[E]ven where aggravating factors may be present, the company may still be eligible for a declination if it demonstrates that it has met additional factors related to self-disclosure, compliance, cooperation, and remediation,” she said.
The DOJ established it will consider reducing fines by as much as 75 percent compared to U.S. sentencing guidelines for companies that self-disclose, fully cooperate, and remediate.