To Aid Corporate Compliance, DOJ To Be More Transparent in Resolutions

Stay current on changes and developments in corporate law with a wide variety of resources and tools.

By Yin Wilczek

April 20 — The Department of Justice going forward will include in its resolutions—including non- and deferred-prosecution agreements—more details of what drove department decision-making, a senior official said April 17.

“This is a priority of mine,” said Leslie Caldwell, the assistant attorney general who heads the DOJ's Criminal Division. “While these documents already provide significant insight into our thought processes, they will soon provide an even greater explanation of our analysis and conclusions.”

Caldwell—speaking at a corporate compliance forum at New York University Law School—also suggested that some companies may be conducting overly broad and expensive internal investigations. To help corporations appropriately tailor their internal probes, the DOJ “will make clear to those companies our areas of interest,” she said.

Focus on Corporate Compliance 

Caldwell in recent speeches has urged companies to beef up their compliance programs. In her latest address, she observed that additional transparency with respect to DOJ charging decisions and corporate prosecutions can help companies to evaluate their compliance programs and to decide whether to cooperate with the government.

“The challenge we are currently working to address is how to publicize these cases while taking into consideration the legitimate concerns of the companies and individuals who were under investigation,” Caldwell said. “We are looking for ways to better inform the community about cases in which we decline to prosecute, as there is often as much to learn from a decision not to bring charges as a decision to prosecute.”

However, transparency is a “two-way street” and companies—to get cooperation credit—must do their part, Caldwell said. In the area of internal investigations, she suggested that the “hallmarks” of a good internal investigation include the naming of culpable individuals and a provision of “all available facts relating to that misconduct.” In addition, internal inquiries must be both independent and designed to uncover the facts, she said.

Too Costly?

There have been concerns that internal investigations—particularly those involving Foreign Corrupt Practices Act issues—may be very drawn out and costly, Caldwell continued.

Among other recent examples, Avon Products Inc. disclosed that it spent at least $344 million on an internal investigation of corrupt payments. The company also paid an additional $135 million to settle U.S. criminal and civil claims, including those involving FCPA violations.

Caldwell clarified that while the DOJ expects corporations to be thorough in their internal investigations, it is up to the company in question—not the DOJ—to decide how the inquiry should be pursued. In fact, some overly extensive internal investigations have delayed the DOJ's ability to resolve matters in a timely manner, she said.

“For example, if a company discovers an FCPA violation in one country, and has no basis to suspect that violations are occurring elsewhere, we would not necessarily expect it to extend its investigation beyond the conduct in that country,” Caldwell said. “On the other hand, if the same people involved in the violation also operated in other countries, we likely would expect the investigation to be broader.”

To help focus internal investigations, Caldwell said she is encouraging her staff and corporate counsel to have “an open dialogue” about the progress of the probes. When the department has information available, “we can openly provide facts and reference points to allow the company to make an informed decision about the scope of its investigation,” she said.

Meanwhile, some companies may decide that it is in their best interests not to cooperate with the government. This may delay, “but rarely thwarts,” the DOJ's investigation, Caldwell warned. Among other examples, she cited the recent record $772 million fine imposed on Alstom SA for FCPA violations, a company that she said “opted not to cooperate for years”.

To contact the reporter on this story: Yin Wilczek in Washington at

To contact the editor responsible for this story: Kristyn Hyland at

Text of the speech is available at


Request Corporate on Bloomberg Law