Friday, January 20, 2023

New Corporate Policy & De-confliction

The new DOJ Corporate Prosecution Policy Revisions of January 17, 2023 discussed here, makes the point of noting that the policy "is not in any way predicated upon waiver of the attorney-client privilege or work product protection, and none of the requirements above require such waiver." This is a wonderful statement to be included in this policy where there is a discussion of cooperation, as it emphasizes the importance of the respect for the attorney-client privilege.  (9-47.120 - Criminal Division Corporate Enforcement and Voluntary Self-Disclosure Policy - here).  In defining self-disclosure it notes the following requirements:

The Criminal Division will require the following items for a company to receive credit for voluntary self-disclosure of wrongdoing (beyond the credit available under the U.S.S.G.):

• The voluntary disclosure must be to the Criminal Division;
• The company had no preexisting obligation to disclose the misconduct;
• The voluntary disclosure qualifies under U.S.S.G. § 8C2.5(g)(1) as occurring “prior to an
imminent threat of disclosure or government investigation”;
• The company discloses the conduct to the Criminal Division within a reasonably prompt
time after becoming aware of the misconduct, with the burden being on the company to
demonstrate timeliness; and
• The company discloses all relevant, non-privileged facts known to it, including all relevant
facts and evidence about all individuals involved in or responsible for the misconduct at
issue, including individuals inside and outside of the company regardless of their position,
status, or seniority.

But the paragraph that caught my eye is this one about de-confliction which states: 

    “De-confliction” is one factor that the Criminal Division may consider in appropriate cases in
evaluating whether and how much credit that a company will receive for cooperation. When the
Criminal Division makes a request to a company to defer investigative steps, such as the interview
of company employees or third parties, such a request will be made for a limited period of time and
be narrowly tailored to a legitimate investigative purpose (e.g., to prevent the impeding of a
specified aspect of the Criminal Division’s investigation). Once the justification dissipates, the
Criminal Division will notify the company that the Criminal Division is lifting its request.
Although the Criminal Division may, where appropriate, request that a company refrain from
taking a specific action for a limited period of time for de-confliction purposes, the Criminal
Division will not take any steps to affirmatively direct a company’s internal investigation efforts.

Is there a stronger link being developed between the government and the company, and is asking the company to defer an investigation furthering the company as an "agent" of the government? What happens if the company does not defer its internal investigation? 

One final note - the policy states that "Declinations under this Policy will be made public."  This acknowledgement of  transparency on the part of the government should be applauded.  But will a company want it known that they had been under investigation?

There are many questions yet to be answered, stay tuned.  


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