The Justice Department will announce a major update to its criminal enforcement policy Thursday that will take into account a big question when considering charging a corporate executive or company: Is the company a good actor that cooperates with authorities and turns in wrongdoers? ?
“I really wanted to arm and empower the chief compliance officers and the general counsel to be able to go into the boardrooms and say to the CEO, the chairman of the board, ‘We need to make these investments in compliance,'” Lisa Monaco, the deputy attorney general, told the DealBook newsletter in an exclusive preview of the changes she will announce in a speech at New York University this afternoon.
In October, Monaco announced an impending crackdown on businesses, with one key goal: to try to motivate more people, whether through the promise of leniency or other benefits, to come forward. She reasoned that securing more voluntary disclosures would ultimately improve the department’s record on corporate criminal enforcement.
An advisory board received input from academics, consumer activists, lawyers, executives and compliance officers to help drive the changes.
By the end of the year Each division of the department must write a policy that makes it clear to businesses how they can obtain reduced fines and penalties for voluntary admission of misconduct.
Companies must show that they are willing to cooperate with authorities, including naming people involved in suspected wrongdoing. — and they must show how they are linking compensation to compliance and act quickly to recover compensation or benefits given to bad actors.
“When I was out of government, I sat on some corporate boards and saw that those are tough decisions and you have tough compensation discussions,” Ms. Monaco said.
Monitors will now be closely monitored as well. During the department’s review of procedures, companies complained about a lack of clarity around monitoring programs imposed by prosecutors.
Ms. Monaco said she had found that some monitors were not properly vetted for conflicts of interest or supervised to ensure they stayed on budget or on task and did not always have a plan. Among the new policies is a set of procedures that apply to all federal prosecutors’ offices across the country and include increased oversight, she said.
“The other thing that I learned in this process and came through loud and clear, again, from everyone across the spectrum, is the importance of clarity,” he said.