Jason R. Dunn and Stanley L. Garnett are shareholders, and Neil S. Sandhu is an associate, in the Denver, CO office of Brownstein Hyatt Farber Schreck, LLP. Mr. Dunn previously served as a U.S. Attorney and Deputy Attorney General of Colorado.
On October 28, 2021, Deputy Attorney General Lisa Monaco gave the keynote address at the ABA’s 36th National Institute on White Collar Crime. Monaco used the opportunity to announce the Department of Justice’s new enforcement priorities: the department will be increasing scrutiny over corporations, their employees and, in particular, their executives.
This new priority was driven, in part, by what Monaco described as a shifting enforcement landscape. The department’s view is that corporate crime increasingly presents more national security threats, relies on emerging technologies, and demands a more data-centric approach to prosecution. And while this new landscape presents serious challenges to prosecutors, the administration has committed to targeting those who profit from corporate crime.
In order to sustain its reinvigorated focus on corporate actors, the department is surging resources to white-collar groups and experimenting with cross-collaboration between FBI agents and federal prosecutors. The department’s increased scrutiny on individual actors comes on the heels of other enforcement developments, such as an increased focus on cyberattacks, data breaches, and cryptocurrencies. The government’s hope is that these new tools will raise the specter of liability, which will in turn drive corporate compliance.
To that same end, Monaco announced three concrete changes to the DOJ’s approach to white-collar crime. First, the department will “restore prior guidance making clear that to be eligible for any cooperation credit, companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue.” Under this new guidance, companies facing prosecution are no longer entitled to self-determine which actors were substantially involved, and whose information needs to be turned over. Instead, companies will have to open up access to all individuals, even those with minimal or peripheral involvement.
Second, when deciding what resolution to offer a target company, the department will now “consider the full criminal, civil and regulatory record of any company.” That means, for example, that a company charged with an FCPA violation will have their entire record scrutinized by every corner of the department—including the Tax Division, the Environment and Natural Resources Division, the money laundering sections, and even U.S. Attorney offices.
Finally, the department will begin to implement corporate monitors as a matter of course.
Together, the department’s new guidance represents a dramatic increase in prosecutorial scrutiny and a significant entanglement of subject matter. When faced with an investigation, corporate counsel will no longer be able to decide which information they are required to reveal. Instead, in each action, companies will be forced to turn over troves of information and subject a litany of employees to governmental scrutiny. This widened aperture will necessarily capture high-ranking officers, employees with less-sophisticated backgrounds, and those who are not familiar with government investigations. The new guidance also demands that corporate counsel have a clear and complete picture of their company’s liability because even unrelated violations now bear heavily on each and every resolution. Even after resolution, companies may have to navigate their work under the eye of a corporate monitor, leaving little room for error.
Monaco ended by previewing reforms the department is considering, such as refusing to offer Non Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs) to “recidivist companies,” requiring stricter adherence to the terms of NPAs and DPAs, and the formation of a new advisory group within the department.
Even though these latter reforms are still under consideration, if Monaco’s speech is any indication, there is a high chance that they will become official policy.