Whistle-Blowers Won't Jinx Self-Reporting Credit With DOJ

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By Michael Greene

April 28 — The Justice Department won't hold it against companies if a whistle-blower reports an issue to regulators before the company discovers it, Assistant Attorney General Leslie Caldwell said April 28.

“A company can't self-report something if it doesn't know about it,” said Caldwell, during a discussion of the DOJ's new one-year initiative that allows up to a 50-percent reduction in sanctions for companies that self-report violations of the Foreign Corrupt Practices Act and take other remedial steps .

Caldwell, who heads the DOJ's Criminal Division, said the department launched the pilot program to encourage more companies to come forward instead of sitting on findings uncovered during internal probes. “We wanted to give an incentive to a company to self-report and we wanted to take away the perception that you will be no worse off if you put the investigation on the shelf,” she said, speaking at an American Bar Association event in Washington.

The DOJ announced the program in early April, saying at the time that it may be tweaked or ended if it doesn't work as hoped. At the same time, the department has beefed up the FCPA unit of its Fraud Section by 50 percent to 30 prosecutors, and the FBI has increased its number of investigators, dedicating three units to FCPA and kleptocracy investigations.

Settlement Pacts

In other remarks, Caldwell said that deferred prosecution and non-prosecution agreements have grown to resemble each other much more. She said the DOJ has had internal discussions about whether it still makes sense to offer both agreements to alleged wrongdoers.

From the department's perspective, there isn't much difference because the penalties and remedial measures are similar, Caldwell said. However, because companies perceive non-prosecution agreements (NPAs) much more favorably, the DOJ has reserved deferred prosecution agreements (DPAs) for more serious factual circumstances or for companies that have less robust controls or processes, she said.

To contact the reporter on this story: Michael Greene in Washington at mgreene@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com