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DEPARTMENT OF JUSTICE |
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Fordham Corporate Law Institute 26th Annual Conference on International Antitrust Law & Policy
TRANSPARENCY IN ENFORCEMENT MAXIMIZES COOPERATION FROM ANTITRUST OFFENDERS
By
GARY R. SPRATLING Deputy Assistant Attorney General Antitrust Division U.S. Department of Justice
Presented at
Fordham University School of Law New York, New York
October 15, 1999
TRANSPARENCY IN ENFORCEMENT MAXIMIZES COOPERATION FROM ANTITRUST OFFENDERS
- An Effective Anti-Cartel Enforcement Program Depends On Cooperation From Offenders
Over the last several years, the Division has had unprecedented success in terms of
cracking international cartels, securing the conviction of the major conspirators, and obtaining
record-breaking fines. A critical component to this success has been our ability to obtain the
cooperation of some companies and individuals against their fellow cartel members. This
cooperation from offenders, in turn, has been dependent upon our readiness to provide
transparency throughout our anti-cartel enforcement program. Accordingly, our anti-cartel
enforcement program is based on the following principles:
- A robust, effective international anti-cartel enforcement program depends on
cooperation from at least some of those who have engaged in the cartel activity.
- Prospective cooperating parties come forward in direct proportion to the
predictability and certainty of their treatment following cooperation.
- Therefore, prospective cooperating parties need to know (1) the rules, (2) how
prosecutorial discretion will be exercised in applying the rules, and (3) that they
will be treated fairly and equitably.
- An anti-cartel enforcement program maximizes the incentives for cooperation
from cartel members if it has transparency in the elements of its enforcement
program discussed in Part II, and it ensures proportional and equitable treatment
of offenders as discussed in Part III.
- Maximizing The Incentives For Cooperation From Antitrust Offenders: Transparency Is The Key
If transparency is to lead to predictability, the threshold consideration for prospective
cooperating parties, then transparency must include not only explicitly stated standards and
policies but also clear explanations of prosecutorial discretion in applying those standards and
policies.
- Transparent Standards For Opening Investigations
- Transparent Standards For Deciding
Whether To File Criminal Charges
- The Department of Justice's stated policy for commencing or recommending
Federal prosecution is found in the Department of Justice's Principles of Federal
Prosecution. The Principles state that the attorney for the government should
commence or recommend Federal prosecution if he/she believes that the person's
conduct constitutes a Federal offense and that the admissible evidence will
probably be sufficient to obtain and sustain a conviction, unless, in his/her
judgment, prosecution should be declined because (1) no substantial Federal
interest would be served by the prosecution; (2) the person is subject to effective
prosecution in another jurisdiction; or (3) there exists an adequate non-criminal
alternative to prosecution. See Principles of Federal Prosecution, U.S. Attorneys'
Manual at 9-27.220 (Tab 3).
- Practically, the Principles require that, in order to file criminal charges, the
Division must believe it has a better than 50/50 likelihood of obtaining a
conviction by a jury under the beyond-a-reasonable-doubt standard (the standard
of proof in the United States for all criminal cases).
- Transparent Prosecutorial Priorities
- In 1995, the Division announced that it was reallocating its resources in order to
make the investigation and prosecution of international cartels affecting American
businesses and consumers one of the highest -- if not the highest -- priorities of
the Antitrust Division, and has reconfirmed that priority in speech after speech.
- See "The Clinton Administration: Trends In Criminal Antitrust
Enforcement," remarks by Anne K. Bingaman, then Assistant Attorney
General, Antitrust Division, before the Corporate Counsel Institute
(November 30, 1995) (Tab 4).
- See "Criminal Antitrust Enforcement Against International Cartels,"
speech by Gary R. Spratling, Deputy Assistant Attorney General, Antitrust
Division, before ABA Advanced Criminal Antitrust Workshop (February 21, 1997) (Tab 5).
- See "Anticipating The Millennium: International Antitrust Enforcement At
The End Of The Twentieth Century," remarks by Joel I. Klein, Assistant
Attorney General, Antitrust Division, before the Fordham Corporate Law
Institute (October 16, 1997) (Tab 6).
- See "Are The Recent Titanic Fines In Antitrust Cases Just The Tip Of The
Iceberg?," speech by Gary R. Spratling, Deputy Assistant Attorney
General, Antitrust Division, before ABA National Institute On White
Collar Crime (March 6, 1998) (Tab 7).
- See "International Antitrust Enforcement," statement by Joel I. Klein,
Assistant Attorney General, Antitrust Division, before the Subcommittee
on Antitrust, Business Rights, and Competition Committee on the
Judiciary, United States Senate (October 2, 1998) (Tab 8).
- See "Negotiating The Waters Of International Cartel Prosecutions,"
speech by Gary R. Spratling, Deputy Assistant Attorney General, Antitrust
Division, before ABA National Institute On White Collar Crime (March 4,
1999) (Tab 9).
- Transparent Leniency Policy
- In August 1993, the Division revised and expanded its Corporate Leniency Policy
to increase the opportunities and raise the incentives for companies to report
criminal activity and cooperate with the Division. Leniency applications have
increased more than twenty-fold since the new policy was announced, and the
Leniency program is, by far, the most effective generator of large, international
cartel cases. In the last two years, cooperation from amnesty applicants have
resulted in dozens of convictions and over $1 billion in fines.
- See Antitrust Division Corporate Leniency Policy (August 1993) (Tab 10).
- See model letter for use in granting leniency to corporations pursuant to
the Corporate Leniency Policy (Tab 11).
- In August 1994, the Division instituted an Individual Leniency Policy to
encourage individuals to come forward with information regarding criminal
antitrust violations. The Individual Leniency Policy applies to all individuals who
approach the Division on their own behalf, not as part of a corporate proffer or
confession, to seek leniency for reporting illegal antitrust activity of which the
Division has not previously been made aware.
- See Antitrust Division Individual Leniency Policy (August 1994) (Tab 12).
- See model letter for use in granting leniency to individuals pursuant to the
Individual Leniency Policy (Tab 13).
- The Division has published a number of papers in order to clarify the Division's
application of its Corporate Leniency Policy.
- See "The Corporate Leniency Policy: Answers To Recurring Questions,"
speech by Gary R. Spratling, Deputy Assistant Attorney General, Antitrust
Division, before ABA Antitrust Section 1998 Spring Meeting (April 1,
1998) (Tab 14).
- See "Making Companies An Offer They Shouldn't Refuse," speech by
Gary R. Spratling, Deputy Assistant Attorney General, Antitrust Division,
before Bar Association of the District of Columbia's 35th Annual
Symposium on Associations and Antitrust (February 16, 1999) (Tab 15).
- Transparent Policy On Plea Agreements
- The explosion of international cartel prosecutions has been greatly assisted by the
Division's ability to secure the cooperation of foreign companies and witnesses
through plea agreements. Such plea agreements generate a number of complex
policy issues that are not raised in domestic cases. The Division published a
paper addressing these recurring issues. For each issue the paper provides the
Division's policy and rationale, and, where appropriate, sample model plea
agreement language, case history, and practical considerations relating to the
issue.
- See "Negotiating The Waters Of International Cartel Prosecutions,"
speech by Gary R. Spratling, Deputy Assistant Attorney General, Antitrust
Division, before ABA National Institute On White Collar Crime (March 4,
1999) (Tab 9).
- In March 1996, the Division entered into a Memorandum Of Understanding
("MOU") with the Department of Justice's Immigration and Naturalization
Service ("INS") which establishes a protocol whereby the Division will advise
cooperating aliens of their ultimate immigration status before they enter into a
plea agreement. Prior to the MOU, the Division was unable to guarantee that a
criminal conviction would not result in an alien's deportation and permanent
exclusion from the United States. However, the MOU assures that cooperating
aliens can receive written assurances in plea agreements that their convictions will
not be used by the INS as a basis to deport or exclude them from the United
States.
- See Memorandum of Understanding Between Antitrust Division and the
INS dated March 15, 1996 (Tab 16).
- See explanation of procedures for obtaining immigration relief in
"Criminal Antitrust Enforcement Against International Cartels," speech by
Gary R. Spratling, Deputy Assistant Attorney General, Antitrust Division,
before ABA Advanced Criminal Antitrust Workshop (February 21, 1997)
(Tab 5).
- See model plea agreement language for providing immigration relief in
"Negotiating The Waters Of International Cartel Prosecutions," speech by
Gary R. Spratling, Deputy Assistant Attorney General, Antitrust Division,
before ABA National Institute On White Collar Crime (March 4, 1999)
(Tab 9).
- Transparent Policy On Sentencing Guidelines
- The sentencing of organizations involves the calculation of fine ranges pursuant to
a specific and detailed formula set forth in the United States Sentencing
Guidelines. The maximum fine imposed under the Guidelines is capped by the
Sherman Antitrust Act, 15 U.S.C. § 1, or the "double the gain or double the loss"
provision of 18 U.S.C. § 3571(d), whichever is higher.
- See United States Sentencing Guidelines §2R1.1 (Tab 17) and Chapter 8
(Tab 18).
- The Division has provided guidance as to how the Sentencing Guidelines are
applied to antitrust and related offenses, how mitigating and aggravating factors
are weighed by the Division in calculating appropriate fines under the Guidelines,
and how the statutory maximums affect Guidelines fines.
- See "Corporate Crime In America: Strengthening The 'Good Citizen'
Corporation - The Experiences And Views Of The Antitrust Division,"
speech by Gary R. Spratling, Deputy Assistant Attorney General, Antitrust
Division, before National Symposium Sponsored By the U.S. Sentencing
Commission (September 8, 1995) (Tab 19).
- See "The Trend Towards Higher Corporate Fines: It's A Whole New Ball
Game," speech by Gary R. Spratling, Deputy Assistant Attorney General,
Antitrust Division, before ABA National Institute On White Collar Crime
(March 7, 1997) (Tab 20).
- See "The Legal and Sentencing Guidelines Consequences of Destroying
Foreign-Based Documents," ABA Section of Antitrust Law Criminal
Practice and Procedure Committee Newsletter, March 1998 at 4-5 (Tab
21).
- The Division often publishes the actual fine calculation work sheets, submitted to
the federal court at the time of sentencing, which breaks down the fine calculation,
including any mitigating or aggravating factors that were taken into consideration.
For example, the Division has made available the fine calculation work sheets for
F. Hoffman-La Roche, BASF AG, SGL Carbon AG, UCAR International, and
Archer Daniels Midland - the five corporate defendants with the highest criminal
antitrust fines.
- See fine calculation worksheets, attachments to "Status Report: The New
Era Of Criminal Antitrust Enforcement," by Gary R. Spratling, Deputy
Assistant Attorney General, Antitrust Division, before The Antitrust
Section's Criminal Practice And Procedure Committee at the 1999 ABA
Annual Meeting (August 9, 1999) (Tab 22).
- Proportionality And Equity In Treatment Of Offenders
- The Division goes to great lengths to treat offenders equitably vis-a-vis one
another; that is, after taking into account all mitigating and aggravating factors,
the Division attempts to ensure that each offender in each cartel is treated
proportionately to others in that cartel, and that offenders across cartels also are
treated proportionately. The timing and value of cooperation by offenders is given
heavy weight in this analysis.
- In presentations before bar associations, Division officials regularly
commit to explaining the Division's application of the above principles of
transparency and why a proposed disposition as to any defendant in any
matter is proportional and equitable.
- The Division publishes fine calculation work sheets for offenders (see
above).
- During plea agreement discussions, at the request of counsel for a putative
defendant, the Division will discuss proportionality of that offender's
treatment vis-a-vis others.
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