Carrots and Sticks: DAG Lisa Monaco Puts Her Stamp on DOJ’S Corporate Criminal Enforcement Policies

Going back many decades, each Deputy Attorney General (DAG) has promulgated revisions to the Department of Justice’s corporate criminal enforcement policies, leaving behind eponymous policy memos that were carefully studied by defense attorneys (e.g., the “Holder Memo” and the “Thompson Memo”). Finding an approach that deters corporate wrongdoing and incentivizes corporations to participate in investigations but avoids punishing entire corporations (including their shareholders and employees) for the conduct of a few bad actors has proven to be a perennial challenge. On the one hand, overly lenient policies may fail to incentivize companies to cooperate with investigations and identify wrongdoers. On the other hand, policies that are overly focused on collecting headline-making settlement amounts from corporations may do little to deter wrongdoing by employees, while indictment can amount to a death sentence for a corporation that may ultimately be innocent of the charged crime. This was the case with Arthur Andersen in the early 2000s, an auditing firm unwisely charged by the Enron Task Force with obstruction of justice, a crime that it did not commit. By the time the Supreme Court unanimously reversed the conviction, the scandal had effectively put the firm out of business. See, Arthur Andersen LLP v. United States, 544 U.S. 696 (2005) (reversing trial conviction).