DOJ Revises Corporate Enforcement Policies, Encouraging Sanctions Whistleblowers
DOJ is revising its corporate enforcement policy to encourage more voluntary disclosures, including by outlining a clearer path for self-reporting companies to avoid criminal prosecutions, the agency said. It’s also adding trade and sanctions to the list of “priority areas” for its whistleblower awards program.
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“Never before have the benefits of self-reporting and cooperating been so clear,” said Matthew Galeotti, head of DOJ’s Criminal Division, during an industry conference May 12, according to a copy of his prepared remarks. “You have the opportunity to see something, report something, and make sure your company can work with the Department to root out individual misconduct and receive all the benefits we have to offer.”
The new policy says companies that voluntarily self-disclose and meet other criteria “will receive a declination, not just a presumption of a declination,” Galeotti said. Those businesses will have to “fully cooperate” with the agency’s investigation, “timely and appropriately remediate,” and have no aggravating circumstances.
Afterward, they “will not be required to enter into a criminal resolution,” he said. “This is a clear path to declination.”
For companies that may have aggravating circumstances, Galeotti said the revised policy makes clear that they may still be eligible for a declination -- a decision by DOJ not to prosecute -- based on “weighing the severity of those aggravating circumstances and the company’s cooperation and remediation.”
Other changes seek to reward companies if they acted in “good faith” but may not have self-disclosed quickly enough or if DOJ was aware of the company’s conduct before the disclosure. Those companies may still be eligible for a non-prosecution agreement “with a term of fewer than three years, 75% reduction of the criminal fine, and no monitor,” Galeotti said.
The new policies “put an end to the guessing game companies previously faced under these circumstances,” he said.
Galeotti also said DOJ wants to limit the use of government-ordered compliance program monitors, noting that they're often “outweighed by the costs they impose.” The agency is reviewing all preexisting monitorships to possibly narrow their scope or even terminate some “altogether,” he said. Companies “can expect to see fewer of them going forward.”
DOJ also is adding new priority areas to its corporate whistleblower awards pilot program, which rewards whistleblowers if they inform DOJ about corporate misconduct that leads to a forfeiture. The agency is expanding priority areas to include trade fraud and sanctions violations, along with procurement and federal program fraud; tariff and customs fraud; and material support of foreign terrorist organizations or those that facilitate cartels and other criminal organizations.
Whistleblower tips “must result in forfeiture to be eligible for an award,” Galeotti said.