The Justice Department is putting every business on notice — aggressive white collar criminal enforcement is here to stay. In a one-two punch, Deputy Attorney General Lisa Monaco announced a revised Corporate Enforcement Policy, and Criminal Division Assistant Attorney General Kenneth Polite followed up with a speech outlining the steps the Criminal Division intends to take to implement the new Corporate Enforcement Policy, including important personnel changes and expansion of responsibilities to enhance DOJ oversight of corporate compliance programs.

DAG Monaco and AAG Polite acknowledge that DOJ’s record over the last ten years has shown a reduction in white collar enforcement.  To address this decline, they have emphasized DOJ’s new CEP and commitment to increasing white collar enforcement.

AAG Polite noted that while enforcement efforts are important, DOJ’s goal is to prevent corporate crime in the first instance.  AAG Polite stated that deterrence is a key objective, he noted that he intends to “[create] an enforcement regime that incentivizes responsible corporate citizenship.”

AAG Polite served as a chief compliance officer and brings a unique perspective to corporate enforcement and compliance issues.  He wants to give companies strong incentives to deter misconduct through effective compliance programs. 

Revised Corporate Enforcement Program

With respect to the Monaco Memo and Corporate Enforcement Program revisions, AAG Polite emphasized two specific issues the Criminal Division has to address.

First, the Criminal Division is tasked to provide additional guidance concerning corporate best practices on use of personal devices and third-party messaging applications, including ephemeral messaging.

Second, the Criminal Division will have to develop tools that can be applied to shift the burden of corporate financial penalties from shareholders onto those who are more directly responsible for the misconduct.

AAG Polite explained the importance of timely disclosure and cooperation in DOJ investigations.  To address the concern that a recidivist will have little incentive to voluntarily disclose misconduct, AAG Polite stated that there are still potential benefits from such a voluntary disclosure.  In applying the new CEP, AAG Polite announced that the Criminal Division will apply the following aggravating factors in future cases: (1) involvement by executive management of the company in the misconduct; (2) significant profit to the company from the misconduct; or (3) pervasive or egregious misconduct.  Unless these factors are present, a company has a strong incentive to voluntarily disclose misconduct and cooperate with the Justice Department even when it has a prior violation of the same kind.

CCO Certification

AAG Polite addressed again DOJ’s recent application of the Chief Compliance Officer certification program.  In all corporate resolutions, the Criminal Division is requiring both the CEO and CCO to certify at the end of the term of the agreement that the company’s compliance program is “reasonably designed,” implemented to detect and prevent violations of the law, and is functioning effectively.  The intent of this certification requirement is to elevate the status of the CCO in the company to make sure the company addressed compliance issues raised by the CCO.

AAG Polite emphasized DOJ’s message to corporations — invest in and support effective compliance programs and internal controls.

AAG Polite noted that the CCO certification requirement has been imposed in two recent major enforcement actions — against Glencore and Brazil-based GOL Airline.  With respect to assignment of independent compliance monitors, AAG Polite explained that DOJ insisted on a monitor in the Glencore case because Glencore’s compliance program had not been fully remediated, while DOJ did not impose a corporate monitor in the GOL base because GOL demonstrated that its anti-corruption program was functioning effectively.

Compliance Understanding and Resources

To enhance its compliance program resources and understanding, AAG Polite explained that the Criminal Division has expanded its capabilities in this area.  In 2021, AAG Polite restructured the Corporate Enforcement, Compliance & Policy Unit (CECP) to include defense lawyers and in-house counsel with experience in compliance, monitorships and corporate enforcement matters.

AAG Polite announced the recent hiring of Matt Galvin into the CECP Unit.  Matt served as the global compliance chief for Anheuser-Busch and brings expertise in the use of data analytics.  In addition, AAG Polite stated that Glenn Leon joined the Criminal Division as the new Fraud Section Chief.  Glenn was the Chief Ethics & Compliance Officer for Hewlett Packard Enterprise.