Leslie Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, emphasized in recent remarks to the American Conference Institute’s 31st International Conference on the Foreign Corrupt Practices Act ("FCPA") that the DOJ "encourages and rewards self-disclosure and cooperation" that stem from internal investigations.
Caldwell said that when potential criminal conduct is uncovered, companies should disclose it to the Justice Department – and do so in a timely manner. She also encouraged companies to "conduct a thorough internal investigation and to share with us the facts you uncover in that investigation." Caldwell stated that while "[w]e do not expect you to boil the ocean in conducting your investigation," the DOJ expects companies "to conduct a thorough, appropriately tailored investigation of the misconduct." This includes providing the DOJ with "useful facts in a timely manner." Caldwell stated that the DOJ does not "expect you to use law-enforcement style techniques to investigate your employees." Rather, "it simply means that when you do an internal investigation, and you choose to cooperate with us, you should understand that we will expect to hear not just what happened, but who did what, when, and where."
So, what kind of information should a company be prepared to share with the DOJ to get credit for self-disclosure? It should include "facts about the individuals responsible for the misconduct, no matter how high their rank may be." Caldwell said that "the sooner you disclose the conduct to us, the more avenues we have to investigate culpable individuals." And, "the more open you are with us about the facts you learned about that conduct during your investigation, the more credit you will receive for cooperation." Additionally, Caldwell said that companies should be prepared to "provide relevant documents in a timely fashion, even if those documents are located overseas." Caldwell said the DOJ "recognize that some countries’ laws pose real challenges to data access and transfer of information, but we also know that many do not." Thus, the DOJ "will not give full cooperation credit to companies that hide behind foreign data privacy laws instead of providing overseas documents when they can. Foreign data privacy laws exist to protect individual privacy, not to shield companies that purport to be cooperating in criminal investigations."
In summary, Caldwell said that "cooperation – and the quality and timeliness of that cooperation – matter." Caldwell emphasized that "if a company works with us, it not only helps the Department, but it helps itself." Caldwell cited the Petro-Tiger case as "a fine example of the kind of cooperation we expect." In that case, Caldwell said that "the company self-reported and fully disclosed the relevant facts to us, even though those facts implicated two CEOs and a top in-house counsel." And it paid off for Petro-Tiger; the company itself has not been charged.
The take-away here? If you suspect a potential FCPA violation may have occurred, engage outside counsel immediately to conduct a thorough internal investigation. Because if a company chooses not to cooperate, or it cooperates too little and too late, Caldwell warned that "those choices also have consequences." The best strategy, therefore, is to get out in front of the issue ... and the DOJ will reward you for it.