February 6, 2023

Volume XIII, Number 37

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February 03, 2023

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DOJ: Companies Need Not Expend Exorbitant Fees to Get Full Cooperation Credit

During an FCPA panel event, the Chief of the US Department of Justice’s Fraud Section advised companies to conduct “targeted” FCPA investigations, dismissing the suggestion that companies must spend hundreds of millions of dollars to receive full cooperation credit, and previewed a new transparency initiative.

On May 14, a panel titled “Foreign Corrupt Practices Act: Recent Trends in Enforcement and Compliance” featured panelists Chief of the US Department of Justice’s (DOJ’s) Fraud Section Andrew Weissmann; Revlon’s Executive Vice President, General Counsel, and Chief Compliance Officer Mitra Hormozi. The panel was part of Global Law Week 2015, a biennial event organized by the New York State Bar Association’s International Section. Highlights from the panel event—including Mr. Weissmann’s reflections on cooperation credit and the announcement of increased transparency—are summarized below.

Earning Cooperation Credit: Conducting Tailored Investigations, Identifying Culpable Actors, and Making Detailed Disclosures

When asked about the rising costs of Foreign Corrupt Practices Act (FCPA) investigations, Mr. Weissmann dismissed the suggestion that high investigative and defense expenses—which have cost some companies nearly half a billion dollars—are a predicate to receiving full cooperation credit. Noting some of the staggering legal fees in the hundreds of millions of dollars, Mr. Weissmann advised the audience that companies do not need to “boil the ocean” when investigating corporate misconduct. Although there may be “historical evidence” of DOJ asking companies to engage in “widespread investigations,” he assured the audience that this “is not the current Department of Justice view.”

Mr. Weissmann described a “real life example” of a multinational company that voluntarily disclosed FCPA misconduct in an unnamed foreign country by a team of individuals who also had responsibilities in three other countries. Because “there was very good reason to think that they would have engaged in the same conduct in those other countries,” Mr. Weissmann said, DOJ expected the company to investigate those countries in order to receive full cooperation credit, and the company complied. Mr. Weissmann noted that the company was neither asked nor expected to expand its investigation to the “Antarctic,” for instance, or high-risk countries (as determined by Transparency International’s Corruption Perceptions Index) where the company operated. As explained by Mr. Weissmann, “If there is an issue in one country and just speculation that the same issues could be happening elsewhere, then we should deal with the issue that is before us and come to a very quick resolution.” Investigations should be “appropriately tailored to the facts at issue,” he said, because both DOJ and the companies it investigates share the same interest in “prompt resolutions.”

Reemphasizing DOJ’s priority of prosecuting individuals, Mr. Weissmann said that companies interested in receiving cooperation credit under the US Sentencing Guidelines and “Filip Factors”[1] must identify culpable actors and provide specific details about their misconduct. Mr. Weissmann stated that DOJ is less interested in the “old school style of cooperation,” which he characterized as “passive voice” admissions that “mistakes were made,” and instead expects companies to include “a subject and a verb” when disclosing misconduct.

Increased Transparency

Mr. Weissmann confirmed DOJ’s commitment to providing more transparency regarding cooperation credit and declinations by including greater factual details in non-prosecution agreements (NPAs) and deferred prosecution agreements (DPAs) and providing “general statistics” about declinations in a series of “anonymized examples. Currently, because declinations are rarely, if ever, publicly announced, companies and their counsel have limited insight into how and why such determinations are made.[2] That will change, Mr. Weissmann said, with DOJ providing the public with greater transparency about the declinations process and what companies can do to increase their chances of receiving declinations. Likewise, although DOJ’s website already contains some information about DPAs and NPAs, Mr. Weissmann assured the audience that they can expect to see more detail in the future about what exactly happened that resulted in specific dispositions to help companies assess the benefits of full cooperation.

- See more at: http://www.morganlewis.com/pubs/doj-companies-need-not-expend-exorbitant...

Copyright © 2023 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume V, Number 138

About this Author

Kelly Moore, Litigation attorney, Morgan Lewis

A former federal prosecutor, Kelly A. Moore represents clients in a wide variety of white-collar criminal matters, including securities fraud, money laundering, healthcare fraud, and violations of antitrust laws, the False Claims Act (FCA), and the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act (FCPA). With experience trying more than 20 cases before US federal juries, Kelly concentrates her practice on white collar criminal defense, regulatory enforcement matters, and related civil litigation.

Martha Stolley, Morgan Lewis, Litigation attorney

A veteran of the Manhattan District Attorney’s Office, Martha B. Stolley brings her criminal trial experience to defending corporations and individuals accused of white collar crimes. She also handles regulatory enforcement matters and related civil litigation, conducts internal investigations, and counsels clients on internal compliance and ethics programs. Her practice spans matters concerning violations of the Foreign Corrupt Practices Act (FCPA) and environmental laws; healthcare, municipal bond, securities, and insurance fraud; and money laundering.