U.S. Deputy Attorney General Rod Rosenstein on Thursday eased the Justice Department’s “all or nothing” approach to assessing cooperation in civil cases, announcing revised policies that give prosecutors more discretion to award credit to companies even when they do not identify every employee who might be potentially culpable.
“The most important aspect of our policy is that a company must identify all wrongdoing by senior officials, including members of senior management or the board of directors, if it wants to earn any credit for cooperating in a civil case,” Rosenstein said in remarks in Washington, D.C., at the 35th International Conference on the Foreign Corrupt Practices Act. “If a corporation wants to earn maximum credit, it must identify every individual person who was substantially involved in or responsible for the misconduct.”
Read Deputy Attorney General Rod Rosenstein’s full remarks here:
Reflecting statements of Obama-era leadership at Main Justice, Rosenstein said the pursuit of individual corporate leaders responsible for misconduct will be a “top priority.” Any company that wants cooperation credit in a criminal case, Rosenstein said, “must identify every individual who was substantially involved in or responsible for the criminal conduct.”
He added: “In response to concerns raised about the inefficiency of requiring companies to identify every employee involved regardless of relative culpability, however, we now make clear that investigations should not be delayed merely to collect information about individuals whose involvement was not substantial and who are not likely to be prosecuted.”
Rosenstein’s remarks came a year after the Justice Department began reviewing its policy for assessing individual accountability in corporate cases.
The revised policy, he said, acknowledges that the “all or nothing” approach to identifying all culpable employees in the civil arena can drag out investigations and drain Justice Department resources. The department’s review, Rosenstein said, revealed that the policy for holding individuals accountable was not “strictly enforced in some cases because it would have impeded resolutions and wasted resources.”
Rosenstein said the “all or nothing” approach to giving cooperation credit can prove particularly unworkable in civil cases, where the government’s primary goal is to recover money.
Prosecutors, he said, need flexibility to accept settlements that address harm and deter future violations and cannot take the time to pursue civil cases against every individual who may be liable for misconduct. The policy gives prosecutors discretion to offer some cooperation credit even if a company does not qualify for maximum credit.
“The idea that a company that engaged in a pattern of wrongdoing should always be required to admit the civil liability of every individual employee as well as the company is attractive in theory, but it proved to be inefficient and pointless in practice,” Rosenstein said.
“When we allow only a binary choice—full credit or no credit—experience demonstrates that it delays the resolution of some cases while providing little or no benefit,” he added.
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