Update: Assistant Attorney General for the Criminal Division, Leslie Caldwell, has stated that the Department of Justice does not have plans for a certification requirement. The Wall Street Journal had previously reported that the U.S. Department of Justice’s fraud section was going to start requiring certification from companies that they fully disclosed all information about individuals involved in wrongdoing before finalizing a settlement agreement. The Wall Street Journal attributed this announcement to a Department of Justice spokesman in an article dated February 4, 2016. However, at the ABA Institute on White Collar Crime in early March 2016, Caldwell rejected that idea.
The Department of Justice’s (DOJ) fraud section has released the latest in a string of developments: a developing certification requirement that will solidify the anchoring of corporate cooperation to the disclosure of individual wrongdoing. Companies seeking cooperation credit will face the requirement of “definite confirmation” that they have turned over all non-privileged information about the individuals involved, the Wall Street Journal reported earlier this month.
Speculated to take the shape of a written statement of cooperation, the new certification requirement comes on the heels of the much talked-about Yates Memo — a September 9, 2015, internal DOJ memo by the Deputy Attorney General. The Yates Memo directed federal prosecutors to focus on individuals from the inception of criminal and civil corporate investigations. Moving forward, DOJ’s resolution of a matter against a corporation became tethered to that of related individual cases. Why? The fraud division’s chief Andrew Weissman put it in tough terms: “[the Yates Memo] serves to make companies fully aware that they cannot receive cooperation credit if they shield the criminality of individual employees.” The Yates Memo signaled the start of a new era in corporate cooperation: the era of all or nothing.
A key guidepost of the Yates Memo is that corporations provide “all” non-privileged information about individuals allegedly involved in wrongdoing. This is where the developing certification requirement comes into play: not only will the company have to cooperate fully — including as to suspected individual wrongdoers — it will have to appoint a high-ranking member to certify it has done so, too.
Exactly how much more difficult the new policy will make corporate cooperation remains to be seen. In the meantime, it is critical that companies plan ahead for the possibility of certification at the inception of an internal investigation. Early internal considerations should include conflicts of interest between companies and individuals, and the possibility of DOJ’s disagreement with the company’s reading of “full cooperation.” One thing is clear at this point: DOJ is raising the stakes for corporate cooperation, and planning ahead is no longer optional.