Corporate Culture Matters: Renewed Commitment to Compliance | Pietragallo Gordon Alfano Bosick & Raspanti, LLP

Take away food:

Based on the old and new directives, the Department of Justice will take the following into account when dealing with misconduct by legal persons:

  • Disclosure of ALL information about those involved in the misconduct
  • Consideration of ALL previous acts of misconduct
  • Use of independent auditors

Priorities and actions: While speaking recently to attorneys at the American Bar Association’s White Collar Crime Institute, Deputy Attorney General Lisa Monaco outlined the department’s “enforcement priorities” and three actions she says will deter corporate crime. The ministry’s enforcement priority must be to “enforce the criminal laws that govern companies, executives, managers and others,” Monaco said. With these priorities in mind, Monaco described three steps the Department will take to “hold individuals and businesses accountable for their fault” when negotiating a resolution to an investigation:

  1. require companies to provide the Ministry with all information on those involved in the misconduct in question;
  2. take into account all previous acts of misconduct by individuals and businesses when assessing the appropriate form of resolution; and
  3. reinstate guidelines for the use of independent observers when the Department considers it appropriate to ensure compliance with a DPA or NPA.

The three Monegasque actions are bold, but they are not necessarily new actions. On the contrary, the actions represent a return to priorities which emphasize the responsibility of companies and individuals. In 2015, then-Deputy Attorney General Amy Yates circulated a memo (the “Yates Memo”) outlining certain requirements for companies hoping to be considered for cooperation. The Yates Memo ordered the companies to fully disclose all relevant facts regarding the individual wrongdoing. This mandate was intended to put an end to the idea that companies could “choose” which facts to disclose. A 2018 memo relaxed this requirement and only required disclosure of those “significantly involved” in the misconduct. Three years later, Monaco declared: “It is no longer enough for companies to limit disclosures to those they believe to be ‘substantially involved’ in the misconduct. “

The Department has always considered certain past misconduct when reviewing corporate resolutions. Now, prosecutors will look at the full range of past wrongs, whether or not they relate to the fault under active investigation. This “broader view of historical corporate faults will harmonize the way we deal with corporate and individual criminal records,” Monaco explained.

Finally, Monaco effectively repealed the previous directives according to which surveillance should be the exception and not the rule. When a company’s corporate culture is challenged, the Ministry will require independent auditors as a tool to encourage and verify compliance.

To read the full speech of Monaco, click on the following link:

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