The Big Shift: DOJ Issues New FCPA Guidance, Starts Self-reporting Pilot Program

April 27, 2016

On September 9, 2015, Deputy Attorney General Sally Yates issued a memo (“the Yates Memo”) to the Department of Justice (“DOJ”) entitled “Individual Accountability for Corporate Wrongdoing.” The Yates Memo contained a new mandate for federal prosecutors: “To be eligible for any cooperation credit, corporations must provide to DOJ all relevant facts about the individuals in corporate misconduct.” The Yates Memo conditions the award of “any” cooperation credit on discovery and production to DOJ of “all” relevant facts about individual corporate misconduct. Inherent in this requirement is a subtle shift of some of the burden and cost of a criminal investigation away from DOJ and onto the offending company. 

The Yates Memo’s policy of enlisting the resources of Corporate America in its efforts to hold individual corporate officers and directors accountable for criminal activities has its roots in the media criticism of DOJ for its perceived failure to bring high-profile prosecutions against the Wall Street executives that some blame for the 2008 financial crisis. With the April 5, 2016 issuance of new guidance (“April 2016 FCPA Guidance”) to the DOJ Criminal Division’s Fraud Section on the handling of Foreign Corrupt Practices Act (“FCPA”) cases discussed below, we now have our first glimpse of how far the branches of the Yates memo will grow.

Commitment of new federal investigation and prosecution resources.  The April 2016 FCPA Guidance does not bury the lead. On its very first page it announces ten new FCPA prosecutors (a 50% increase) in the Fraud Sections FCPA Prosecutions Unit. It also announces the creation of three new FBI Squads devoted to FCPA investigations. The importance of this allocation of resources cannot be overstated. In the totality of the history of law enforcement, the assignment of new investigators and additional prosecutors has never resulted in a decrease in arrests and prosecution. More FBI agents and more prosecutors will mean more FCPA prosecutions. Period.

Launch of Pilot Program to encourage self-disclosure.  The April 2016 FCPA Guidance couples the assignment of new FCPA prosecution resources with creation of a new one-year “Pilot Program” for DOJ’s handling of FCPA cases. Participation in the Pilot Program has a substantial carrot for corporations whose activities have led them to run afoul of the FCPA: up to a 50% reduction off the bottom of the Sentencing Guideline’s fine range and forgoing the appointment of a monitor. But, it is in the April 2016 FCPA Guidance’s extensive description of the hoops that must be jumped through to participate in the Pilot Program that we see the impact of the Yates Memo. 

In order to participate in the Pilot Program, a corporate defendant must (1) voluntarily self-disclose the FCPA violation, (2) fully cooperate with DOJ in the investigation, and (3) engage in timely and appropriate remediation. Further, a review of the April 2016 FCPA Guidance’s definitions of “voluntarily,” “fully,” and “timely,” as used above reveal that DOJ is placing a very high bar here:  “voluntary,” for example, means, in part, “prior to an imminent threat of disclosure,” i.e., before DOJ knew about it. The definitions here are intended to strip away any resistance by the offending company, to move quickly past disputes over facts, and to ensure a quick conviction in exchange for the 50% fine reduction and non-assignment of a monitor.  Again we see that the burden and cost of the full investigation of corporate misdeeds is subtly shifted away from DOJ and onto the companies involved. 

So, in the FCPA arena specifically, Corporate America is now further incentivized to, at their cost, reveal FCPA violations to DOJ, turn over “all” facts discovered in an internal investigation of those violations, and quickly move to remediate the problem. Having served as United States Attorney for the District of North Dakota from 2010-2015, through years of “sequester” level limited budgets, a DOJ hiring freeze, and a sixteen day shutdown of the federal government I can easily identify the source of this push by DOJ to “outsource” as much of its investigation and remediation work to the offending company as possible. DOJ feels that it has been forced to do “more with less” for too long and is now looking to do “more with yours.”

The Yates Memo and the April 2016 FCPA Guidance, when read together closely, and in the full context of the backlash over the 2008 financial collapse and DOJ’s budget woes, signal a new course for white collar prosecutions: one where costs and burden are shifted from DOJ to the private sector. What this means for General Counsel is still evolving. But, given the upcoming increase in FCPA investigations and prosecutions as a result of the additional  FBI agents and prosecutors assigned to FCPA cases, it can be said with some certainty that the importance of quick, quality, cost effective, and independent internal investigations has never been higher.

Here is a link to the April 2016 FCPA Guidance:

The articles on our website include some of the publications and papers authored by our attorneys, both before and after they joined our firm. The content of these articles should not be taken as legal advice. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the views or official position of Robins Kaplan LLP.


Timothy Q. Purdon


Chair, American Indian Law and Policy Group;
Co-Chair, Government and Internal Investigations Group

Brendan V. Johnson


Member of Executive Board
Chair, National Business Litigation Group
Co-Chair, Government and Internal Investigations Group

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