Lanny Breuer, selected by President Obama to head the Criminal Division of the Justice Department in January 2009, will discuss practical matters for companies dealing with the Justice Department, including topics such as cooperation, attorney-client privilege, and the importance of pre-existing compliance programs. Breuer will also discuss the Department’s increasing use of proactive law-enforcement strategies and tools, such as wiretaps, to combat financial fraud.
These are my notes, live from the keynote:
Prosecutions promote the rule of law, deter future bad behavior and punish wrong-doers. Compliance is largely the opposite of criminality.
He wants a new era in white collar crime prosecution.
The Obama administration is giving great attention to financial fraud and the establishment of the Financial Fraud Enforcement Task Force. Over 2 dozen state and federal agencies are part of the group. A companion is the deployment of additional resources. The budget has increased allowing the hiring of additional prosecutors and support.
They using more aggressive law enforcement techniques, including wire taps and undercover stings. They will continue to look toward innovative techniques and existing techniques used against organized crime and blue collar crime. (Is there a meaningful distinction anymore?)
He is looking to continue strengthening their partnership with the SEC.
Foreign bribery is a law enforcement challenge. Since 2004 the DOJ has filed 37 FCPA cases, with fines over $1.5 billion. Over 80 individuals have been charged under the FCPA. Aggressive enforcement is meant to deter others from engaging in bribery.
He cited the new UK Bribery Act and the need for a company to have “adequate procedures” to detect and prevent bribery.
There are benchmarks. The principles of federal prosecution of business entities are the OECD guidance on effective compliance are key standards. But you need to customize these to your company. Direct reporting lines are important. Testing effectiveness is important.
If you come forward, cooperate with the investigation and institute meaningful remediation, the DOJ is committed to giving you meaningful credit. But not amnesty.
He used the Siemens case as a benchmark for the value of cooperation and remediation. The Siemens fine was huge at over $400 million. However, the sentencing guidelines called for a fine of over $1.4 billion. (He didn’t mention whether taking federal contracting debarment off the table was part of the discussion with their cooperation credit.)
As for compliance monitors, he would want one in place when the corporation needs to implement or significantly redesign a compliance program. Largely, it sounds like a monitor would be more likely if there is still significant remediation to be done.
He then sat down with Compliance Week‘s Matt Kelly.
Complying with the FCPA is harder in some countries is harder than others (China versus Belgium)?
You don’t get a free pass. They expect a more robust compliance program when entering into markets where bribery is more common. They would want to see new tools to detect and try to prevent bribery.
Now that the UK Bribery Law has banned facilitating payments will they be prohibited under the FCPA?
It will take an act of Congress, but he is looking forward to the evolution of law in the area of bribery of government officials.
Interpreting “Tone at the Top”, does firing someone and not supplying legal fees a bad tone?
The DoJ has changed their position on this. The key is removing the person from authority at the company, at least temporarily. The company has to make some real changes.
What about consistency throughout the DOJ and US Attorney Offices?
All FCPA has come in through the fraud unit, so that helps ensure consistency in that area. (It sounds like he recognized some inconsistencies.)