Thank you, Bob and Aisling, for that kind introduction. It is a pleasure to be here with you all this morning with so many friends and colleagues, both past and present.
This event brings together true experts in white collar crime, including department leaders, defense counsel at esteemed law firms, and in-house lawyers at major corporations. Attorneys who know all the ins and outs of these matters. Counsel who know the intricacies of government policies and can rattle off every major corporate resolution within the past 10 years.
Events like this one continue the important dialogue between the department and the defense bar and business community. We are committed to ensuring transparency and being clear and predictable about our expectations and our policies. Not only does this allow companies and their counsel to make informed, and often tough, decisions, it also helps promote foundational principles of justice. By being transparent, we can instill faith that the department is acting appropriately and fairly, that the law is applied equally to everyone, and that public servants are carrying out their mandate without fear or favor.
That is why we speak with you all and describe our priorities and practices. That is why so many of our policies and guidance documents are public, including of course the Justice Manual, the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP), the Evaluation of Corporate Compliance Programs, the recent Pilot Program, and more. We also publish CEP declinations on our website, as well as agreements with companies that identify the relevant considerations that led to a particular resolution.
And as I am sure you all are well aware, in the past few weeks and months, the Criminal Division has made many announcements in the area of corporate enforcement and white-collar crime. Many client alerts and news articles have been written about the meaning of our policies, revisions, and resolutions, how they will guide the department, and what else may be in store.
We welcome that attention. Indeed, that is why the Corporate Crime Advisory Group, or CCAG, which was created in October 2021 at the Deputy Attorney General’s direction, included input from experts from inside and outside the department. This bolsters our policies’ legitimacy and ensures we are carefully weighing all relevant equities.
But even though much has been published recently, do not mistake any one policy or revision as marking a sea change in how the department tackles white collar crime. Don’t fall victim to recency bias. A new announcement does not mean that we have only begun to focus on an issue, or that our prosecutors will place undue attention upon it at the expense of other considerations.
Take, for instance, the revisions to the Criminal Division’s Corporate Enforcement Policy that I announced at Georgetown in January. Since that announcement, many have focused on the policy’s provisions regarding “immediate” voluntary self-disclosure and “extraordinary” cooperation and remediation. Do not lose sight of the CEP’s larger context.
Since 2017, the then-FCPA CEP – which was extended to the rest of the division in 2018 – has provided that, absent aggravating factors, if a company voluntarily self-discloses misconduct, fully cooperates with our investigation, and timely and appropriately remediates, it can earn a presumption of a declination. These three requirements are detailed in the CEP and have remained constant. When a company meets them all, as we have consistently demonstrated over the last six years, the division will award a declination, absent aggravating factors.
But recall that “voluntary self-disclosure” is also defined to require, among other things, disclosure “within a reasonably prompt time after becoming aware of the misconduct.” So too here, we have predictably applied this definition for years. There is no requirement for immediate or extraordinary action in circumstances where that presumption applies.
The new CEP released in January does not disturb this well-trodden path to a declination. Instead, our revisions provide an additional avenue toward a declination for companies that voluntarily self-disclose, cooperate, and remediate but have aggravating factors and would otherwise be ineligible for a presumption of declination. It is only in that context – where a company has aggravating factors yet seeks a declination – that it must demonstrate “immediate” voluntary self-disclosure, “extraordinary” cooperation and remediation, and a fully functioning compliance program at the time of the misconduct and the disclosure.
But as I said, even this new provision has its roots in prior Criminal Division matters. As an example, take the August 2018 declination issued to Insurance Corporation of Barbados Limited, or ICBL. In that case, the company paid approximately $36,000 in bribes to a Barbadian government official in exchange for certain insurance contracts. Senior management was involved in the conduct, and as the CEP makes clear, that is one of the aggravating factors that removes the presumption of declination.
Nonetheless, we decided to issue a declination given all the factors, including the company’s timely, voluntary self-disclosure. Specifically, as to timeliness, within several weeks of ICBL’s parent company learning about the bribery scheme at its subsidiary (ICBL), the parent company disclosed the conduct to us. The company’s actions to remediate the misconduct is also worth emphasizing. The company’s full remediation included terminating all of the executives and employees involved in the misconduct. And the company’s efforts allowed us to charge culpable individuals, which remains our top priority.
This is a historical example of the division issuing a declination to a company that had aggravating factors, which is now explicitly accounted for in the new CEP. It is one of a number of important datapoints that show how our policies often take shape. We do not act suddenly and without basis. We instead consider the cases that come before us, evaluate all the facts and circumstances, and can then identify trends and themes that we can use to refine our policies. Proceeding in this manner can help achieve transparency and predictability.
But again, the much focused-upon terms in the revised CEP like “immediate” and “extraordinary,” apply only when there are aggravating factors. Absent such circumstances, if companies voluntarily self-disclose, fully cooperate with our investigations, and timely and fully remediate, they can rely on a presumption of a declination. This has been, and remains, the case.
The declination issued two weeks ago to Corsa Coal illustrates the point. In that case, from approximately 2016 to 2020, the company’s employees and agents engaged in a scheme to bribe Egyptian government officials to obtain and retain lucrative contracts to supply coal to an Egyptian state-owned and -controlled company. To carry out the scheme, Corsa paid approximately $4.8 million to a third-party intermediary that Corsa’s employees knew would be used, at least in part, to pay bribes. In exchange for the bribe payments, Corsa secured approximately $143 million in coal contracts and earned over $30 million in profits.
Under our CEP, we issued a declination with disgorgement. There were no aggravating factors, and the company satisfied the policy, including by fully cooperating with our investigation, which led to charges against two individuals, one of whom has already pleaded guilty. And the company fully remediated the misconduct, including by terminating a sales representative who engaged in the bribe scheme and substantially improving its compliance program and internal controls. In this example, the company received a declination without any need to demonstrate immediate or extraordinary action.
In the Corsa case, we also determined that it was appropriate to allow the company to pay a reduced amount based on the division’s inability to pay guidance, which we issued in 2018. We have consistently applied this guidance to all cases – where applicable – whether declinations, NPAs, DPAs, or guilty pleas.
To be sure, the revised CEP specifies a new path for a declination where there are aggravating factors. As I mentioned, this may occur where the company immediately self-discloses misconduct, provides extraordinary cooperation and remediation, and has an effective compliance program in place at the time of the misconduct and the time of the disclosure. We considered what drove our decisions in the older cases I mentioned and used those lessons to craft the new policy. To foster transparency and predictability, we take what we have seen and, where appropriate, adapt our policies to reflect these circumstances.
Even so, we recognize that under the revised CEP, one may ask what exactly constitutes “immediate,” or what precisely is “extraordinary”? Of course, we can never articulate, in advance, what exactly will or will not satisfy these provisions. Every case is different, and our prosecutors need flexibility and discretion to apply their judgment in the myriad scenarios that may be presented. The best way to understand these terms is to see how they are applied in future cases.
But we understand that companies may wish for more to guide their decision-making now. A company with aggravating factors that is contemplating self-disclosure may want to know what exactly it needs to do to receive a declination under the revised CEP.
That is why, when I announced the revisions in January, I noted that to receive credit for extraordinary cooperation, companies must go above and beyond the criteria for full cooperation set out in our policies – not just run of the mill, or even gold-standard cooperation, but truly extraordinary. And I noted some concepts – immediacy, consistency, degree, and impact – that will help to inform our approach to assessing what is “extraordinary.”
Last December’s FCPA resolution with ABB is illustrative. To be sure, the company was offered a DPA, not a declination, and therefore the CEP’s requirements for “extraordinary” cooperation and remediation would not strictly apply.