Monday, February 25, 2008
New Article Spotlight: Regulating the New Regulators: Current Trends in Deferred Prosecution Agreements
From SSRN.com: Peter Spivack and Sujit Raman of Hogan & Hartson LLP recently published Regulating the "New Regulators": Current Trends in Deferred Prosecution Agreements. Here is the abstract:
Deferred prosecution and non-prosecution
agreements are proliferating. Prosecutors and major corporations
entered into twice as many of these agreements between 2002 and 2005 as
in the previous ten years combined; thirty-seven such agreements were
concluded in 2007 alone. As pretrial diversion becomes the standard
means for concluding corporate criminal investigations, it is becoming
increasingly clear that a fundamental shift in the purpose and function
of the criminal law in the corporate context has quietly taken place.
In a post-Enron world, Department of Justice (DOJ) officials appear to
believe that the principal role of corporate criminal enforcement is to
reform corrupt corporate cultures - that is, to effect widespread
structural reform - rather than to indict, to prosecute, and to punish.
By focusing more on prospective questions of corporate governance and
compliance, and less on the retrospective question of the entity's
criminal liability, federal prosecutors have fashioned a new role for
themselves in policing, and supervising, corporate America. They have
become the New Regulators.
Remarkably, this important policy shift has occurred in the absence of any public guidance from DOJ leadership. Even more remarkably, this signficant shift has sparked little discussion in the nation's broader policy discourse - until now.
As Congress actively considers legislation that would direct DOJ leadership to issue appropriate guidance regarding DPAs and NPAs, this Essay provides an introduction to many of the key issues, offers a background history of the rise of corporate pretrial diversion, and explores several of the significant trends that emerged in 2007. While recent legislative interest is focused on the selection and payment of DPA-imposed federal monitors, this Essay suggests that pretrial diversion in fact impacts a range of important legal concepts, including federal-state relations, the separation of powers, and the basic role of the prosecutor.
In light of the considerable inconsistencies in current prosecutorial practice, this Essay argues that DOJ leadership should take appropriate action and issue much-needed guidance. Failing that, DPAs and NPAs may be a ripe and necessary area for legislative intervention. [Mark Godsey]