On October 28th, Deputy Attorney General Lisa Monaco announced that the U.S. Department of Justice (DOJ or Department) is renewing its focus on white collar crime and enforcement, in remarks delivered during the American Bar Association’s 36th National Institute on White Collar Crime. Monaco made clear that the Department is significantly enhancing its efforts to deter white collar crime and promote corporate responsibility and compliance—stating that the government will “surge resources” to its prosecutors in support of these efforts.
Monaco highlighted three new DOJ initiatives aimed at achieving these ends. First, she announced the Department will restore guidance originally adopted in 2015, which requires that companies wishing to receive cooperation credit in DOJ investigations disclose all non-privileged information related to all individuals involved in corporate misconduct. This policy—known as the “Yates Memo,” after its author, former Deputy Attorney General Sally Yates—was modified during the Trump Administration to permit companies to limit their disclosures only to individuals “substantially involved” in misconduct. Monaco explained that, by reinstating the Yates Memo, the Department aimed to provide clarity about its expectations, and to prevent companies from exercising excessive discretion over which facts to disclose to the government, and which individuals to make available to prosecutors.
Second, in a diversion from current Department policy, Monaco announced that DOJ will now consider all prior misconduct by a company when assessing the appropriate resolution to a criminal investigation. Currently, guidance set forth in the Department’s Justice Manual directs prosecutors to consider a corporation’s history of similar misconduct when evaluating corporate liability. However, Monaco explained that this guidance—called the “Principles of Federal Prosecution of Business Organizations”—will be revised to make clear that all prior criminal, civil, and regulatory misconduct must be examined, as a company’s “record of misconduct speaks directly to . . . [its] overall commitment to compliance programs and the appropriate culture to disincentivize criminal activity.” Monaco clarified that “[s]ome prior instances of misconduct may ultimately prove to have less significance.” However, “prosecutors need to start by assuming all prior misconduct is potentially relevant.”
Third, and finally, Monaco made clear that DOJ is empowering its prosecutors to require the appointment of independent monitors whenever necessary to show “that a company is living up to its compliance and disclosure obligations.” The appointment of a monitor as part of a corporate criminal resolution can create significant costs and reporting obligations for a company. During the last Administration, Assistant Attorney General Brian Benczkowski drafted a memorandum providing additional guidance on the factors prosecutors should consider when weighing the appointment of a monitor. That document instructed the Criminal Division to “favor the imposition of a monitor only where there is a demonstrated need for, and clear benefit to be derived from, a monitorship relative to the projected costs and burdens.” Without explicitly referencing this memorandum, Monaco noted that, to the extent Department materials have been read to suggest that monitorships are disfavored, she was “rescinding” that guidance. She added that the Department will also study the processes for selecting corporate monitors, including examining whether to adopt a standardized selection process across DOJ’s divisions and offices
Monaco emphasized that these changes are only preliminary steps the Department will take in its renewed commitment to combatting corporate crime. In support of these efforts, she announced the establishment of an inter-departmental Corporate Crime Advisory Group, which will have a broad mandate to examine and make recommendations regarding many aspects of corporate enforcement. Notably, this will include, among other priorities, examining the propriety of permitting recidivist companies to resolve their misconduct through alternate resolution vehicles like non-prosecution and deferred prosecution agreements.
We will continue to monitor developments in this area over the coming months.