state that the company will not be charged (includingby deferred or nonprosecution agreements).
(1) The company must voluntarily disclose the violation.
As an initial matter, the company would have to voluntarily disclose the potential violation to thegovernment. This would not mean, however, thatthe company loses the benefits of this policy if, un-beknownst to the company, a whistleblower hasbeaten it to the punch. In this instance, the com-pany should still be credited with a voluntary dis-closure as long as its intent was to voluntarily dis-close.
However, a company
lose voluntary-discloser status if the potential violation became amatter of public record, such as through a mediaarticle or a lawsuit, prior to the company disclosingthe potential violation to the government.
DOJ could also apply a temporal criterion to deter-mine what would be considered a valid voluntarydisclosure. For example, DOJ might require thatthe disclosure be made within three or four monthsof the company learning of the potential violation.This would give the company sufficient time to in- vestigate the facts at hand but would also mean thecompany would be presenting DOJ with a rela-tively fresh case.
(2) The potential breach did not include illegalconduct by senior leaders within the company.
Many believe that a company should never be ableto escape prosecution if its senior leaders were in- volved in the misconduct. Although this pointcould be validly contested, I have included it giventhe difficulty that prosecutors would have giving apass to a company where, for instance, the CEOengaged in the unlawful conduct.
For purposes of this criterion, ‘‘senior leaders’’means just that: the true top leaders of the upper-most legal entity within a corporation, i.e., its offic-ers and directors. In a public company, this wouldmean the ‘‘Section 16’’ officers and directors.
(3) The company must cooperate fully with the government, including providing evidence andinformation against employees, ofﬁcers, directors,and agents of the company.
In most cases, this would require the company toconduct the type of robust internal investigationthat is already common. The results of the investi-gation must be fully shared with the governmentand the government may direct that additionalsteps be taken by the company.
The company must also cooperate with the govern-ment to bring prosecutions against individuals.This would, of course, mean that the company would be expected to reveal evidence that mightimplicate officers, employees, directors, andagents. In some circumstances, this cooperationmight even include assisting DOJ with proactive in- vestigations involving undercover agents or wire-taps.
(4) The company must agree to implementappropriate remedial measures to mitigate thechances for future violations.
Remedial measures may include disciplining cul-pable individuals, implementing more robust con-trols for certain processes, and enhancing the com-pany’s anticorruption training procedures.
(5) Prior to discovering the misconduct, the companymust have implemented a robust complianceprogram.
Prior to discovering the misconduct at issue, thecompany must have implemented a complianceprogram with the attributes enumerated in DOJ’s various deferred prosecution agreements and non-prosecution agreements. Knowing that having a ro-bust policy would, if the other criteria of the five-part plan were met, result in no criminal enforce-ment action would encourage companies toimplement a robust program. While DOJ would not bring criminal charges againsta company that successfully passed this test, the gov-ernment would not want a company to be able to ben-efit from its ill-gotten gains. The government could re-cover those gains through either a civil claim for dis-gorgement of profits brought by the Securities andExchange Commission—an action commonly broughttoday—or, in cases where the SEC does not act or doesnot have jurisdiction to act, through a civil actionbrought by DOJ.
DOJ’s adoption of this policy would be consistent with the guidance it has issued regarding the chargingof a corporation. Beginning with the so-called HolderMemo and continuing to the currently extant FilipMemo, DOJ has issued ‘‘Principles of Federal Prosecu-tion of Business Organizations.’’
Several criteria thatfederal prosecutors are specifically directed to considerare contemplated by this proposed policy: voluntarydisclosure and subsequent cooperation with the govern-ment; the existence and effectiveness of a complianceprogram; remedial steps taken; the prosecution of indi- viduals for the company’s malfeasance; and the ad-equacy of other remedies, such as civil or regulatory en-forcement.
The principles also acknowledge that com-ponents of DOJ may set specific ‘‘policy goals’’ anddevelop prosecution policies accordingly, citing, interalia, the Tax Division’s preference for prosecuting re-sponsible individuals and not corporations for corpo-rate tax offenses.
Additionally, adoption of this policy would be in step with evolving international norms. The recently enactedU.K. Bribery Act and its Italian analogue both provide
See 15 U.S.C. § 78p.
Consistent with current DOJ policy, waiver of the protec-tions accorded by the attorney-client privilege and work-product doctrine would not be necessary to satisfy this crite-rion. See
U.S. Attorneys’ Manual
, Title 9, Chapter 9-28.710.
See, e.g., 15 U.S.C. § 78dd-2(g).
U.S. Attorneys’ Manual
, Title 9, Chapter 9-28.000.
Id. at Chapter 9-28.300
Id. at Chapter 9-28.400
2012 BY THE BUREAU OF NATIONAL AFFAIRS, INC. CRL ISSN 0011-1341