Highlighting the accomplishments and developments at the US Department of Justice (DOJ) over the past 12 months, Deputy Assistant Attorney General Matthew Miner urged the business sector to work cooperatively with the DOJ and emphasized the benefits of self-reporting in all corporate criminal cases, not just in Foreign Corrupt Practices Act (FCPA) cases.
At the Global Investigations Review New York Live event on September 27, Mr. Miner, who oversees both the Appellate and Fraud Sections of the Criminal Division, opened his remarks by expressing admiration for the 160 career federal prosecutors and appellate specialists working under his management, and lauding the accomplishments of the Fraud Section under Acting Chief Sandra Moser and Acting Principal Deputy Chief Rob Zink.
Commenting that “there is a lot to talk about,” Mr. Miner highlighted recent developments in DOJ’s approach to corporate white collar enforcement, many of which were simply refinements of already existing principles.
1. FCPA Corporate Enforcement Policy
Mr. Miner discussed the FCPA Corporate Enforcement Policy (the Policy), announced in November 2017 and now incorporated into the Justice Manual.[1] In a nod to his experience in private practice, he acknowledged that choosing whether to voluntarily self-disclose misconduct is one of the most difficult decisions senior management and corporate boards face. According to Mr. Miner, the Policy, which he said clearly sets forth the benefits of self-disclosure, full cooperation, and remediation— “most significantly a presumption of a declination” —should make that decision a bit easier to make. In one of several statements reflecting a recognition of the uncertainty that companies face upon uncovering a problem, Mr. Miner commented, “If you believe, as I do, that corporations are rational actors that react to clearly defined economic stimuli, then it follows that the Department’s more concrete guidance will have a positive effect.”
Mr. Miner described the three FCPA declinations since the Policy was implemented, remarking that two are “particularly noteworthy” since senior executives were implicated in the wrongdoing. He seemed to want to allay concerns that the DOJ would treat management involvement as an aggravating circumstance that automatically would overcome the presumption for a declination.
Reiterating the benefits of voluntary disclosures and full cooperation, Mr. Miner referenced a March 2018 announcement that the Criminal Division would consider the Policy as “nonbinding guidance” in all Criminal Division corporate criminal cases, not just those involving violations of the FCPA. “[T]he principles contained in the Policy are based on sound policy considerations that are a net plus to both the Department and companies.” Again reflecting a respect for corporations, Mr. Miner added that, “[b]usinesses thrive in a stable legal environment. A stable legal environment exists when laws are enforced consistently and fairly. And when business thrives, it benefits all of us.”
Building on his July 2018 announcement on the Policy’s application to mergers and acquisitions that uncover possible FCPA violations, Mr. Miner announced that the DOJ also will look to the Policy where M&A due diligence uncovers other types of potential wrongdoing, i.e., not just FCPA violations. He used as an example and in connection with several references to the opioids crisis a large pharmacy uncovering problems at smaller pharmacies it acquires. He explained the impetus for the announcement: “At the Department, we know that there are many benefits when law-abiding companies with robust compliance programs are the ones to take over otherwise problematic companies. Not only can the acquiring company help to uncover wrongdoing, but more importantly, the acquiring company is in a position to right the ship by applying strong compliance practices to the acquired company.”
2. Piling On
Mr. Miner also reiterated the DOJ’s recently announced “Coordination” or “Anti-Piling On” Policy, (see our May 2018 LawFlash), which discourages “piling on,” or imposing multiple penalties from different enforcement agencies. Mr. Miner cited several recent examples of the DOJ coordinating with foreign authorities—including the United Kingdom’s Serious Fraud Office, L’Agence Francaise Anticorruption, and Brazil’s Ministerio Publico Federal—to ensure equitable and non-duplicative penalties for violations of law. Pursuant to those instances of coordination, Mr. Miner stated, the United States will credit hundreds of millions of dollars to defendants who have paid penalties to foreign governments.
Mr. Miner remarked that these coordinated FCPA resolutions “are not isolated events,” adding that “we continue to see a significant rise in global enforcement and cooperation with foreign authorities.”
3. State of Enforcement Under the Trump Administration
Mr. Miner provided some preliminary statistics on the Fraud Section’s enforcement actions for the fiscal year, including the FCPA Unit’s announcement of eight corporate resolutions, for a total of approximately $925 million in corporate US criminal fines, penalties, and forfeiture. In comparing those figures to 2017 actions, he clearly sought to underscore that FCPA enforcement remains robust under the Trump administration. Mr. Miner also touted the successes of the Securities and Financial Fraud Unit, including 36 convictions and the announcement of two corporate resolutions.
With respect to the Health Care Fraud Unit, Mr. Miner described a record-breaking year in which DOJ charged 320 individuals and obtained 193 convictions. His comments came on the heels of a nine-figure hospital chain criminal-civil qui tam settlement with DOJ, underscoring that DOJ’s long-running focus on healthcare fraud remains hot.
Mr. Miner also spoke at length about the DOJ’s focus on the opioid crisis and the expansion of the Strike Force model, which brings together the resources and expertise of the Health Care Fraud Unit, the US Attorney’s Offices in the Strike Force locations, and law enforcement partners at the US Department of Health and Human Services, the Federal Bureau of Investigation, and the Drug Enforcement Administration.
Mr. Miner concluded his remarks by urging the audience, including counsel, advisors, and compliance professionals, to work with the DOJ to combat fraud: “I hope that you will view those of us at the Department of Justice as partners, not adversaries. I hope when you see something, you will decide to come forward and say something. As I have said before and firmly believe, when business and industry work with the Department, rather than against it, our public institutions and our country are stronger for it.”
Notwithstanding Mr. Miner’s emphasis on the carrot rather than the stick approach, Mr. Miner did not address the incalculable impact that internal and government investigations have on corporations and their employees. For that reason, and because any leniency considered by DOJ will necessarily involve an assessment of a company’s historical compliance program, companies are well-advised to build and maintain effective compliance and ethics programs to prevent and detect misconduct and, in the event of a government investigation, to mitigate the negative impact.
Read Mr. Miner’s full remarks.
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[1] Until very recently, the Justice Manual formerly was known as the United States Attorney’s Manual, or USAM.