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Companies that think and act like prosecutors when cooperating with the government on bribery violations are more likely to receive leniency under the Justice Department’s new policy, officials said May 8.
Their comments at the American Conference Institute in New York offer the first a glimpse into the thought process behind the agency’s relatively new policy designed to encourage more companies to self-report illegal bribes in other countries. The prosecutors made it clear to corporate attorneys in attendance that the companies coming forward should expect an active relationship with prosecutors if they want to see reduced punishments.
“We need corporations to be good corporate partners in order to effectively prosecute,” said Daniel Kahn, chief of the DOJ’s Foreign Corrupt Practices Act unit. “The FCPA involves cases where a lot of evidence is overseas, and we need the cooperation of companies.”
The DOJ’s FCPA enforcement policy gives corporations discounted fines and lesser punishments if they voluntarily come to the government with potential violations. It’s been a permanent fixture for six months, previously running as a pilot program at the DOJ since 2016.
Business information provider Dun & Bradstreet Inc. became the first company to self-report under the permanent policy in April, according to the DOJ. The company received the optimal outcome under the leniency program when DOJ authorities declined to prosecute, but it was fined $9.2 million under a settlement with the Securities and Exchange Commission for accounting irregularities stemming from the same violations.
Other companies involved in illegal bribery overseas could see a similar outcome at the DOJ when they come forward in a timely fashion and retain close connections with officials throughout the investigation, Kahn said.
Of most value to prosecutors are companies’ pertinent documents and sources, said Janis Echenberg, deputy chief of the criminal division at the U.S. attorney’s office for the Southern District of New York. Information that helps officials trace the timeline and source of FCPA violations are hard for the government to find independently because they’re often stored overseas or with third parties.
“We want to be sure that every effort, every level of creativity is being deployed in finding those documents,” she said.But prosecutors don’t want a data dump. They need to be selective and thoughtful when choosing which sources to share with officials, said Jacquelyn Kasulis, chief of the business and securities fraud section at the U.S. attorney’s office for the Eastern District of New York.
“We don’t want millions and millions of documents because we have limited resources,” she said. Companies should first internally review relevant documents thinking about what the government would be most interested in. “We are looking for proactive cooperation.”
Kahn warned that even the most creative cooperation may not be enough to secure leniency. Companies also need to demonstrate a commitment to ongoing compliance and take note of those who are responsible for the wrongdoing. People engaged in the misconduct shouldn’t feel that they can avoid punishment because they are too important to business and therefore won’t get fired, he said. “That’s not the message we want to send.”
Kasulis said officials give points to compliance programs that are equally shared from the top down. “We don’t want a situation where compliance is just checking the boxes,” she said. Instead, prosecutors look into the facts about “what has been done with culpable individuals and the people who were supervising those individuals.”
Kahn said the DOJ wants to be transparent about its objectives by laying out the ways companies can help in an FCPA investigation.
“That’s the reason we have laid out as much detail as possible about what we expect from cooperation,” he said. “We are not trying to catch companies at the end and say, ‘Gotcha.’”
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