Assistant Attorney General (AAG) Kenneth A. Polite Jr. of the US Department of Justice’s (DOJ’s) Criminal Division recently joined several high-profile, diverse US Attorneys at the inaugural Charlotte E. Ray Lecture and White Collar Crime Conference at Howard University School of Law in Washington, DC. AAG Polite delivered remarks and led a panel discussion with other US Attorneys.
The panelists shared stories about their careers in law and why they entered public service, offered insight on the DOJ’s enforcement priorities, and discussed best practices for advocacy before, and negotiation of corporate resolutions with, the DOJ.
The April 2023 conference invited current and former government attorneys to discuss emerging issues in corporate criminal enforcement and provide insight and inspiration to Howard law students. The panel moderated by AAG Polite featured US Attorney Vanessa Roberts Avery (D. Conn.), US Attorney Breon Peace (E.D.N.Y.), US Attorney Damian Williams (S.D.N.Y), and First Assistant Stephanie Hinds (N.D. Cal.).
The US Attorneys discussed details of the DOJ’s new nationwide voluntary self-disclosure policies and emphasized the importance of timeliness in making voluntary disclosures. They provided insight into what they look for when evaluating full cooperation, adequacy of remedial measures, and potential collateral consequences of negotiated resolutions.
In February 2023, the DOJ announced a new nationwide policy designed to incentivize companies to voluntarily self-disclose misconduct to any US Attorney’s Office promptly after its discovery. The policy, which builds on statements made by Deputy Attorney General (DAG) Lisa Monaco in a September 2022 speech and accompanying memo, rewards companies that choose to voluntarily self-disclose misconduct.
The new policy mirrors, in part, the Criminal Division’s Corporate Enforcement Policy (CEP), unveiled by AAG Polite earlier this year, in attempting to incentivize early disclosures but stops short of offering more concrete carrots such as the presumption of declination found in the CEP. Under the CEP, there is still a path to declination for companies with aggravating factors, as DAG Monaco recently highlighted in a May 2023 speech.
These policies condition positive outcomes on the disclosures being made reasonably promptly after the discovery of misconduct, before a government investigation is on the horizon, and before public disclosure of the misconduct at issue. When a company makes a timely voluntary disclosure in accordance with that policy, followed by full cooperation and remedial action, the US Attorney’s Office will not seek a guilty plea absent any aggravating factors.
The US Attorneys—from the Southern District of New York, Eastern District of New York, District of Connecticut, and Northern District of California (First Assistant appearing)—stated that the goal of the policy is to add transparency to the disclosure process and provide concrete benefits for early disclosure and full cooperation.
Addressing the defense bar, US Attorney Avery emphasized that prosecutors want to see companies as “partners in voluntarily self-disclosure” and encouraged companies to “talk to [them] early and often.” The DOJ hopes the policy will incentivize companies to build strong compliance programs and take appropriate remedial measures when misconduct is identified, US Attorney Avery said.
US Attorney Peace highlighted that early disclosure and full cooperation—and not “cooperation in name only”—throughout the disclosure process not only is tied to discrete benefits, but also informs the DOJ’s discretionary considerations when determining how to resolve an investigation.
US Attorney Peace further advised that when crafting resolutions, the DOJ focuses on the seriousness and nature of the crime, the impact on the victims and community, steps that the company took upon discovering the misconduct—including remediation and disciplinary action— the most appropriate resolution, and the collateral consequences that resolution might have.
According to US Attorney Peace, simply responding to a subpoena is not enough to constitute cooperation, nor is taking a wait-and-see approach by unduly delaying a self-disclosure until it becomes serious. US Attorney Peace stated that the DOJ would not view either of those as full cooperation because the corporation “did not do all that [it] could to advance the investigation.”
The DOJ representatives also noted the importance of implementing meaningful and effective remedial measures. First Assistant Hinds said the remediation must ensure that the corporate culture is changing and that guardrails are put in place to prevent recurring misconduct and demonstrate a real step toward a culture change.
Who is involved in the implementation of remedial measures also matters, First Assistant Hinds said. Different weight is given to remediation when, for example, senior executives are getting involved in helping the company address the issues and achieve results.
To close out the panel, the DOJ representatives stressed the importance of transparency throughout the voluntary self-disclosure process, including when negotiating resolution agreements and raising collateral consequences. They offered their views on best practices for advocacy before the DOJ.
Rather than a corporation arguing from the jump that a resolution would cause shattering consequences, US Attorney Williams encouraged corporations to be transparent and open in discussions about whether the collateral consequences are unclear, yet to be seen, or are troubling for given reasons. Such dialogue is seen as more effective advocacy, and preserves the credibility of the corporation in the event the collateral consequences do not turn out to be shattering.
First Assistant Hinds added that transparency also means that companies do not need to complete a full investigation before coming forward to self-disclose. Voluntary self-disclosure can be made once the misconduct is discovered with a note that the corporation needs to investigate and report back with its findings. That type of early disclosure—followed by continued full cooperation—can help companies realize the full benefits of DOJ’s new policy.
Whether to disclose remains a weighty decision for corporations, but a key takeaway from the conference is that, should a company elect to voluntarily disclose, it should give consideration to which US Attorney’s Office or DOJ section is most appropriate for the corporation to disclose to, given differences in existing policies and associated benefits.
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