The Department of Justice recently issued to all U.S. Attorneys throughout the nation a guide entitled "Federal Prosecutions of Corporations." The document has not been published but the Bureau of National Affairs, Inc. obtained a copy and has summarized its contents. In essence, the document, which was created by a group of representatives of U.S. Attorneys offices and other federal lawyers, details the factors that federal prosecutors should consider in deciding whether or not to pursue criminal charges against corporations. Deputy Attorney General Eric Holder, Jr. stressed that the guide is intended as a framework to help prosecutors make this determination rather than an "outcome-determinative" manual.
The guide advises federal prosecutors to take into account the following special factors, in addition to the customary issues such as evidentiary sufficiency and rehabilitative potential, in deciding whether to conduct investigations, bring charges, or negotiate plea agreements with corporations:
- the nature and seriousness of the misconduct;
- the pervasiveness of the wrongdoing;
- the corporation's history of similar misconduct, warnings or sanctions;
- voluntary disclosures;
- cooperation with investigators;
- the existence and adequacy of the organization's compliance program;
- willingness to make restitution and discipline errant employees;
- the collateral consequences of a criminal conviction to innocent parties; and
- the sufficiency of noncriminal sanctions.
Emphasis on Management Involvement and Corporate Cooperation
With respect to the pervasiveness of the wrongdoing, the guide emphasizes that management's role is the most significant issue. The management of a corporation is considered responsible for the corporate culture in which criminal behavior is either discouraged or tacitly encouraged. The guide notes that an indictment is most appropriate when a corporation has not taken sufficient measures to rectify a problem despite previous warnings or sanctions.
The guide advises that a prosecutor should consider whether a corporation is willing to cooperate, which may include identifying the wrongdoers, making witnesses available, or disclosing the results of internal investigations. In particular, the document characterizes a corporation's willingness to waive attorney-client and work product privileges as an important factor but not an absolute requirement. Actions such as shielding, offering attorneys' fees, or extending joint defense agreements to culpable individuals or retaining employees without sanctions may also be considered by a prosecutor.
Corporate Compliance Programs and Policy Considerations
The guide further suggests that the existence of a corporate compliance program is not, in and of itself, enough to avoid criminal charges. Critical factors to be considered when evaluating a compliance program are whether the program is properly designed to prevent and detect misconduct and whether management is enforcing the program. The guide instructs prosecutors to examine the staffing of compliance programs and to consult with experts in relevant government agencies to address the adequacy of the programs.
Finally, the guide stresses that prosecutors take into account the specific policy goals involved and to consider and consult with regulatory authorities regarding noncriminal sanctions. In that respect, prosecutors should evaluate a regulatory authority's ability and willingness to take action, the likely sanction and the interests of federal law enforcement generally.