Assistant Attorney General Kenneth A. Polite Jr. Announces Revisions to DOJ Criminal Division’s Corporate Enforcement Policy

Eager to enlist corporations as “allies in [its] fight against crime,” the Department of Justice (DOJ) announced on Tuesday, Jan. 17, 2023, expansions to the Criminal Division’s corporate enforcement policy, now the Criminal Division Corporate Enforcement and Voluntary Self‑Disclosure Policy.^[1] An outgrowth of a pilot program specific to the Fraud Section’s Foreign Corrupt Practices Act (FCPA) Unit, the purpose of the policy was — and remains — to incentivize companies to voluntarily self-disclose misconduct and to cooperate with the DOJ in any related investigation.^[2] While originally directed at overseas bribery and other FCPA-related allegations, what was the department’s FCPA Corporate Enforcement Policy, incorporated into the Justice Manual in November 2017, has since served as a guide in the Criminal Division’s prosecution of other corporate cases.^[3] The expanded policy announced last week has now formalized the extension of the corporate enforcement policy to all manner of corporate misconduct, dropping FCPA from its name, though certainly not from its mandate. 

In remarks at Georgetown University’s Law Center on Jan. 17, 2023, Assistant Attorney General Kenneth A. Polite Jr. explained that DOJ “could never completely identify and address [corporate] criminality without corporations ... coming forward and reporting the conduct of these wrongdoers.”^[4] Accordingly, DOJ’s policies incentivize not only disclosure but detection. As AAG Polite explained: “When a company has uncovered criminal misconduct in its operations, the clearest path to avoiding a guilty plea or an indictment is voluntary self‑disclosure. It is also the clearest path to the greatest incentives that we offer, such as a declination with disgorgement of profits.” Furthermore, in DOJ’s view “a functioning compliance program with effective detection mechanisms best positions companies to not only identify misconduct in the first instance, but to make the important decision of whether to disclose it.” 

Last week’s revisions to the Criminal Division’s corporate enforcement policy are consistent with the purpose and structure of the existing policy and consonant with other recent DOJ pronouncements. AAG Polite outlined three principal expansions to the policy, as follows: 

• First, while the presumption in favor of declination for a company that voluntarily discloses misconduct and otherwise agrees to cooperate still applies only in the absence of certain aggravating circumstances, prosecutors may now consider whether to decline to prosecute even if certain aggravating factors exist, so long as the voluntary self‑disclosure was immediate; at the time of the misconduct and disclosure the company had effective corporate compliance controls resulting in the company’s voluntary self‑disclosure; and the company provides “extraordinary cooperation” and undertakes “extraordinary remediation.” As for what might qualify as extraordinary, the AAG cited “immediacy, consistency, degree, and impact,” highlighting as examples “when an individual begins to cooperate immediately, and consistently tells the truth; individuals who allow us to obtain evidence we otherwise couldn’t get,” and “cooperation that produces results, like testifying at a trial or providing information that leads to additional convictions.” 

• Second, where a criminal resolution is still warranted despite a company’s voluntary disclosure and cooperation, DOJ’s existing policy offered a 50% reduction off the low end of the applicable Sentencing Guidelines penalty range. Under the newly expanded policy, the Criminal Division will now recommend a reduction of at least 50% and up to 75% off the low end of the Guidelines range so long as the company is not a criminal recidivist. And even recidivists may now receive a 50% to 75% reduction, only generally not off the low end of the Guidelines range. Finally, absent egregious circumstances, DOJ is also not likely to require a corporate guilty plea.  

• Third, even if a company does not voluntarily self-disclose, prosecutors can still recommend a fine reduction of up to 50% off the low end of the Guidelines range where the company’s cooperation and remediation efforts are “extraordinary,” provided the company is not a criminal recidivist. The previous policy only permitted prosecutors to recommend up to a 25% reduction.

Responsive to Deputy Attorney General Lisa Monaco’s September 2022 memorandum outlining DOJ’s priorities and policies on corporate criminal enforcement,^[5] the updated corporate enforcement policy is simply the next step in the evolution of DOJ’s efforts to leverage corporate compliance to ferret out misconduct. 

Corporations would do well to consider upfront the efficacy of their compliance programs and to involve counsel as early as possible when considering the application of the policy to potential misconduct.

The Criminal Division’s updated corporate enforcement policy can be found here.

^[1] _{Press Release, Assistant Attorney General Kenneth A. Polite, Jr. Delivers Remarks on Revisions to the Criminal Division’s Corporate Enforcement Policy, Dep’t of Justice (Jan. 17, 2023), https://www.justice.gov/opa/speech/assistant-attorney-general-kenneth-polite-jr-delivers-remarks-georgetown-university-law.}

^[2] _{See Press Release, Criminal Division Launches New FCPA Pilot Program, Dep’t of Justice (April 5, 2016), https://www.justice.gov/archives/opa/blog/criminal-division-launches-new-fcpa-pilot-program.}

^[3] _{See Client Alert, DOJ Criminal Division Announces FCPA Corporate Enforcement Policy Provides Nonbinding Guidance for All Criminal Cases, Kramer Levin (Mar. 9, 2018), https://www.kramerlevin.com/en/perspectives-search/doj-criminal-division-announces-fcpa-corporate-enforcement-policy-provides-non-binding-guidance-for-all-criminal-cases.html.}

^[4] _{Supra n. 1.}

^[5] _{See Client Alert, Deputy Attorney General Lisa Monaco Announces New Policies on Corporate Criminal Enforcement, Kramer Levin (Sept. 23, 2022), https://www.kramerlevin.com/en/perspectives-search/deputy-attorney-general-lisa-monaco-announces-new-policies-on-corporate-criminal-enforcement.html.}