Friday, July 7, 2006

When a Violation Is Not a Violation

Peter Lattman on the Wall Street Journal Law Blog has an interesting post (here) about the non-prosecution agreement Boeing entered into with the government to settle a variety of government investigations into the company.  The agreement (here) contains a provision regarding what constitutes a violation: “The commission of a defined offense by a Boeing employee shall not be deemed to constitute the commission of a defined offense by Boeing as long as the underlying allegation or conduct is reported by Boeing . . . ."  There are all sorts of legal fictions, such as the abatement doctrine that deems a conviction not to exist if the defendant dies after a conviction but before an appellate affirmance of the conviction (see earlier post here), and here's another one stating when a violation is not a violation.  This particular sleight of hand makes self-reporting the key to avoiding having the government file criminal charges that is has agreed to forego. 

The number of deferred and non-prosecution agreements is growing rapidly, and what one company gets others will be eager to obtain.  It may be a question of leverage, that companies with stronger cases -- or more persuasive lawyers with good connections -- will obtain the favorable provisions.  Of course, no one has violated one of these agreements yet to require the government to decide whether it will pursue charges.  It would not surprise me to see more agreements contain a provision like the one in the Boeing agreement because by putting the onus on the company to police itself and report possible violations, the government can avoid having to make the harder decision about whether to declare a breach of the agreement if there is another legal violation.  A self-reporting provision makes it less likely the government will ever have to face the question of charging a company like Boeing, which is a major defense contractor and one of the leading exporters in the United States, with a crime. (ph)

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Very informative

Posted by: Freddie Sirmans | Jul 7, 2006 2:23:33 PM

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