DOJ Corporate Enforcement Guidelines Are Placing Individual Defendants Between a Rock and a Whirlpool

For companies suspected of wrongdoing, cooperating with Department of Justice (DOJ) investigations and self-disclosing their misconduct often appears to be their only option to avoid prosecution and reduce large financial penalties. But, these benefits often come at a price, especially to company employees who are caught in the middle. To gain cooperation credit for voluntary self-disclosure, companies are expected to identify all relevant facts relating to the individuals responsible for the alleged misconduct. And as part of demonstrating their cooperation to the government, companies often pressure their employees to submit to interviews, including with DOJ, or risk losing their jobs and/or indemnification of legal fees. Such scenarios, which have become prevalent in today's corporate enforcement environment, place employees “between the rock and the whirlpool” by arguably coercing their testimony and infringing on their constitutional right against self-incrimination. See, Garrity v. New Jersey, 385 U.S. 493, 498 (1967).

DOJ's Corporate Enforcement Policies

This situation is a direct result of DOJ's corporate enforcement policy, which has undergone multiple revisions under Deputy Attorney General Rod Rosenstein designed to increase both: 1) voluntary self-disclosures by corporations (thus mitigating their liability); and 2) DOJ's ability to prosecute individual wrongdoers. The Justice Manual (previously known as the United States Attorneys' Manual (USAM)) codifies DOJ's corporate enforcement policy, which is written in the Foreign Corrupt Practices Act (FCPA) context, but serves as non-binding guidance in all criminal cases. (Principal Deputy Assistant Attorney General John P. Cronan delivered remarks at Practicing Law Institute (Nov. 28, 2018)). The Manual provides that a company will receive a presumption of non-prosecution absent aggravating circumstances if it fully cooperates by voluntarily self-disclosing misconduct and timely remediating. Full cooperation includes disclosing “all facts related to involvement in the criminal activity by the company's officers, employees, or agents,” and, “[w]here requested, making available for interviews by the Department those company officers and employees who possess relevant information,” including those located overseas. Justice Manual 9-47.120. In Deputy Attorney General Rod J. Rosenstein's remarks at the American Conference Institute's 35th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2018), he stressed “that any company seeking cooperation credit in criminal cases must identify every individual who was substantially involved in or responsible for the criminal conduct” while making clear that “pursuing individuals responsible for wrongdoing will be a top priority in every corporate investigation.”