On March 2, during the American Bar Association’s 2023 White Collar Conference in Miami, Deputy Attorney General Lisa Monaco announced several new Department of Justice (DOJ) policies intended to promote corporate compliance. The new policies include: (1) that every component of the DOJ that prosecutes corporate crime now has in place a voluntary self-disclosure program, (2) that the DOJ will require companies to adopt a compensation system that promotes compliance in future resolutions with the DOJ, and (3) that there will be fine reductions for companies that claw back payments to executives and employees that have engaged in wrongdoing.

The policy changes announced at the 2023 ABA White Collar Conference are intended to bolster the policies Deputy Attorney General Lisa Monaco (Monaco) announced in October 2021, September 2022, and February 2023 regarding corporate criminal enforcement. In 2021, the DOJ launched a Corporate Advisory Group to recommend new policies to promote corporate compliance and increase consistency and predictability for how the government treats corporate crime. The policies were announced by Monaco on March 2, 2023, following the Corporate Advisory Group’s recommendations.

Voluntary self-disclosure

First, Monaco announced that every component of the DOJ that prosecutes corporate crime, including every U.S. attorney’s office, now has a voluntary self-disclosure program in place. In an effort to increase transparency and predictability and eliminate geographic disparities across the DOJ, no DOJ component will seek a guilty plea if a company has voluntarily self-disclosed wrongdoing, cooperated with the government in any investigation, and remediated the misconduct. Monaco noted that even where a company has a significant history of misconduct, timely self-disclosure, cooperation, and strengthening of a company’s compliance program can lead to more favorable outcomes, as seen in the recent deferred prosecution agreement the DOJ entered into with ABB Limited – a Swiss multinational engineering company that voluntarily self-disclosed violations of the Foreign Corrupt Practices Act to the government.

Compensation

Second, Monaco announced that every corporate resolution involving the Criminal Division of the DOJ will now include a requirement that the resolving company develop compliance-promoting criteria within its compensation and bonus systems. Monaco provided an example of Danske, the largest bank in Denmark, which as part of its plea agreement in December 2022 agreed to revise its performance review and bonus system to include criteria related to compliance.

Clawback programs

Third, the Criminal Division of the DOJ will now provide fine reductions to companies that seek to claw back compensation from corporate wrongdoers. At the outset of a criminal resolution, the resolving company will pay the applicable fine, minus a reserved credit equaling the amount of compensation the company is attempting to claw back from culpable executives and employees. If the company succeeds in recouping compensation from responsible employees, the company will keep money that is clawed back and does not need to pay the government the amount recovered. Monaco acknowledged the difficulty in pursuing clawbacks, and announced that this pilot program will still give fine reductions for companies that pursue clawbacks in good faith but are unsuccessful.

National security and corporate crime resources

Finally, Monaco announced that additional resources will be allocated to address the intersection of corporate crime and national security. The DOJ will be adding more than 25 new prosecutors who will investigate and prosecute sanctions evasion, export control violations, and similar economic crimes.

ADDITIONAL AUTHORS

Thomas Suddath, Kate Seikaly, Evan Barr, A. Scott Bolden, James Sanders, Francisca Mok, Anthony Todd