DOJ rolls out new policy against ‘piling on’

Deputy Attorney General Rod Rosenstein announced a new policy Wednesday that encourages coordination among DOJ departments and other enforcement agencies to avoid multiple penalties for the same conduct.

The aim is to avoid unfair duplicative penalties while keeping good relationships with law enforcement partners in the United States and abroad, Rosenstein said.

He was talking to the New York City White Collar Crime Institute.

He said the DOJ should “discourage disproportionate enforcement of laws by multiple authorities.”

Piling on by enforcement agencies has become more common because modern business operations regularly span jurisdictions and borders, Rosenstein said.

“Whistleblowers routinely report allegations to multiple enforcement authorities, which may investigate the claims jointly or through their own separate and independent proceedings.”

Piling on hurts companies by creating uncertainty. It’s harder for them to make “full and final settlements.”

“We need to consider the impact on innocent employees, customers, and investors who seek to resolve problems and move on,” Rosenstein said.

The new policy against piling on will be incorporated into the U.S. Attorneys’ Manual.

Rosenstein said it’s “another step towards greater transparency and consistency in corporate enforcement.”

“To reduce white collar crime, we need to encourage companies to report suspected wrongdoing to law enforcement and to resolve liability expeditiously,” he said.

The new policy has four key features.

First, the fed’s criminal enforcement authority shouldn’t be used against a company for purposes unrelated to the investigation and prosecution of a possible crime. “We should not employ the threat of criminal prosecution solely to persuade a company to pay a larger settlement in a civil case,” Rosenstein said.

Second, the new policy directs DOJ lawyers and groups in different departments or offices “to coordinate with one another, and achieve an overall equitable result.” That might mean crediting and apportioning financial penalties, fines, and forfeitures to avoid disproportionate punishment.

Third, DOJ lawyers, when possible, should coordinate with other federal, state, local, and foreign enforcement authorities that are working to resolve a case with a company for the same misconduct.

Finally, the new policy sets out factors DOJ lawyers can evaluate to determine if or when multiple penalties “serve the interests of justice in a particular case.”

“Sometimes, penalties that may appear duplicative really are essential to achieve justice and protect the public,” Rosenstein said.

Factors to consider when evaluating possible multiple penalties include:

  • The egregiousness of the wrongdoing
  • Statutory mandates regarding penalties
  • The risk of delay in finalizing a resolution, and
  • The adequacy and timeliness of a company’s disclosures and cooperation with the DOJ.

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“Cooperating with a different agency or a foreign government is not a substitute for cooperating with the Department of Justice,” Rosenstein said.

“And we will not look kindly on companies that come to the Department of Justice only after making inadequate disclosures to secure lenient penalties with other agencies or foreign governments.”

He said it’s not always possible for the DOJ to coordinate with other agencies, particularly those outside the United States.

“The timing of other agency actions, limits on information sharing across borders, and diplomatic relations between countries are some of the challenges we confront that do not always lend themselves to easy solutions,” he said.

As a positive first-time example, he mentioned the DOJ’s coordination with Singapore on the FCPA enforcement action against Keppel in December.

The FCPA Blog | May 10, 2018
http://www.fcpablog.com/blog/2018/5/10/doj-rolls-out-new-policy-against-piling-on.html