Updates to DOJ Corporate Criminal Enforcement Policy

Government contractors often face investigations that could lead to criminal charges. Understanding the U.S. Department of Justice’s (DOJ’s) policies on handling corporate misconduct can help a company take prudent actions to reduce corporate risk. On September 15, 2022, Deputy Attorney General Lisa Monaco announced several important updates to DOJ policy intended to more effectively hold individuals and companies accountable, and incentivize good corporate behavior.

Voluntary self-disclosure

The DOJ provides mitigation credit to companies that voluntarily self-disclose misconduct and fully cooperate with an investigation. Absent aggravating factors, the DOJ will settle misconduct cases and not bring a criminal case seeking a guilty plea where the company has voluntarily self-disclosed, cooperated, and remediated the problem. Second, the DOJ will not impose a compliance monitor on a cooperating company that self-discloses if, at the time of resolution, it also demonstrates it has implemented and tested an effective compliance program.

Individual accountability

To encourage full cooperation, DOJ policy now requires that to receive any cooperation credit the voluntary self-disclosure must disclose all relevant, non-privileged facts about the misconduct. Further, to receive full cooperation credit, corporations must produce the information on a timely basis. If there was undue delay in the production, cooperation credit will be reduced. Going forward, in connection with every corporate resolution, DOJ prosecutors must specifically assess whether the corporation provided full cooperation in a timely fashion.

Prior history of corporate misconduct

DOJ will also consider a company’s historical misconduct to determine how to resolve a current matter. The DOJ will consider the form of prior resolution and any associated sanctions or penalties, as well as the elapsed time between the current misconduct, the prior resolution, and the conduct underlying the prior resolution. Recent U.S. criminal resolutions, as well as actions involving the same personnel or management, are given the most weight. The DOJ will also assess whether the current conduct shares the same root causes and, for companies operating in highly regulated industries such as government contractors, how a company’s history compares to its peers. Multiple, successive non-prosecution or deferred prosecution agreements are disfavored and will be subject to review by DOJ leadership before approval.

Corporate culture and independent compliance monitors

DOJ will review the company compliance culture, including whether the compliance program is adequately funded and staffed. They will also review corporate compensation systems to see if they effectively impose financial penalties for misconduct and deter risky behavior, and incentivize compliant actions. Finally, the DOJ will impose a monitorship where needed to reduce the risk of further misconduct and address compliance lapses.

Additional information

If you have questions regarding DOJ corporate criminal investigations or other federal government contract issues, contact the professionals at Williamson Law Group at (301) 788-8198 for confidential assistance and counsel, or e-mail Scott Williamson at srw@williamsonlawgroup.com.

This Contract Compliance Update is to keep readers current on government contract matters and is not intended to be legal advice. If you have any questions, please contact Williamson Law Group for legal advice regarding your particular case.