New Department of Justice Policy for Corporate Cooperation

On November 29, 2018, Deputy Attorney General Rod J. Rosenstein announced a significant change to Department of Justice (“DOJ”) policy for corporate cooperation. 

According to Rosenstein, DOJ will no longer require a company seeking cooperation credit in a criminal case to identify every individual even minimally involved in misconduct. Rather, a company seeking cooperation credit in a criminal case must now identify “every individual who was substantially involved in or responsible for the criminal conduct” (emphasis added). The addition of the word “substantially” represents a shift from prior DOJ policy on corporate cooperation, which was set forth in the September 9, 2015 Memorandum of Deputy Attorney General Sally Yates, titled “Individual Accountability for Corporate Wrongdoing” (better known as the “Yates Memo”). Although DOJ has not yet provided a formal definition for what “substantially involved” actually means, Rosenstein suggested that companies that want to cooperate in exchange for credit should have “full and frank discussions with prosecutors about how to gather the relevant facts.” 

Rosenstein stated that the change to DOJ policy reflects concerns that had been raised about the “inefficiency” of requiring companies to identify every employee involved in wrongdoing, “regardless of relative culpability.” Rosenstein stated that under the new policy, internal investigations “should not be delayed merely to collect information about individuals whose involvement was not substantial, and who are not likely to be prosecuted.” 

The new DOJ policy for corporate cooperation in criminal cases is much more company-friendly. Previously, companies seeking cooperation credit would have to invest tremendous time and energy in an effort to uncover every individual touching on corporate wrongdoing, no matter how minor that person’s role may have been. Particularly when alleged wrongdoing spanned a period of years, this could be a herculean task requiring extensive company resources and legal fees, and potentially causing significant delays in resolving internal investigations. The new policy also gives companies and their attorneys additional discretion in presentations to DOJ, with the ability to more narrowly focus on individuals who were “substantially involved” in wrongdoing. 

According to Rosenstein, DOJ will also relax its cooperation requirement in civil cases from the previous “all or nothing” approach. Rosenstein stated that going forward, rather than identifying every individual employee who may be civilly liable for misconduct, companies must identify “all wrongdoing by senior officials, including members of senior management or the board of directors,” in order to obtain any cooperation credit. In order to earn maximum credit, companies must identify “every individual person who was substantially involved in or responsible for the misconduct.” Rosenstein stated that the new policy would replace one that was “inefficient” and would often “delay corporate resolutions” by forcing companies to continue internal investigations longer than necessary. Rosenstein stated that the new policy provides DOJ civil attorneys the ability to “offer some credit” for meaningful assistance in a government investigation, even if a company “does not qualify for maximum credit.” Rosenstein emphasized that the new policy prohibits DOJ attorneys “from awarding any credit whatsoever” to any corporation that conceals wrongdoing by senior officials, “or otherwise demonstrates a lack of good faith in its representations.” 

The revised DOJ guidelines as announced by Rosenstein are significant for any company seeking cooperation credit. In connection with both criminal and civil cases, internal investigations may be able to conclude with the expenditure of less time, company resources and legal fees. In addition to being less burdensome, investigations and presentations to DOJ can also be more focused on individuals who actually played a significant role in any wrongdoing. 

Rod J. Rosenstein’s November 29, 2018 remarks at the American Conference Institute’s 35^th International Conference on the Foreign Corrupt Practices Act are available at: https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-remarks-american-conference-institute-0.