DOJ antitrust official defends compliance credit initiative

Deputy Assistant Attorney General Richard Powers, in remarks delivered at the 13th International Cartel Workshop in San Francisco, said concerns over the policy change are premised on a “fundamental misunderstanding” of the process, particularly when it comes to new rules regarding deferred prosecution agreements (DPAs). The policy change, introduced in July 2019, allows prosecutors to proceed by way of a DPA when “the adequacy and effectiveness” of a corporation’s compliance program weigh in favor of doing so.

“Prior to the change, companies that failed to obtain leniency were charged and could either plead guilty or risk a guilty verdict after trial. By opening the door to the possibility of a DPA, companies with effective compliance programs may qualify for an option that avoids a felony conviction,” said Powers. “We have heard concerns that companies uncovering cartel conduct may no longer feel the need to seek leniency as quickly as possible but may instead sit tight and later advocate for a DPA if leniency is no longer available.”

The concerns extend beyond cartel conduct, and the DOJ sought to address them when it noted in July the effectiveness of a compliance program is just one of 10 factors the new Justice Manual directs prosecutors to consider when weighing charges against a corporation. “Prompt self-reporting, cooperation, and remedial action [are also] factors that go hand in hand with compliance as the hallmarks of good corporate citizenship,” said Powers, adding the choice to take a wait-and-see approach regarding a DPA could prove a detriment for companies.

Powers said leniency marker requests have “remained steady” following the policy change. He believes leniency “will continue to be the ultimate credit for an effective compliance program that detects antitrust crimes and allows prompt self-reporting.”

“Companies with robust, effective compliance programs are the first line of defense in preventing [cartel] crimes, which is why we recently reconsidered our longstanding approach and opened the door to crediting effective compliance programs,” said Powers.

The changes announced in July were a long time coming for the DOJ. Principal Deputy Associate Attorney General Claire McCusker Murray alluded to the leniency updates when she spoke at Compliance Week’s 2019 Washington D.C. conference in May.