9-27.001
Duties of Federal Prosecutors and Duties of Corporate Leaders
The prosecution of corporate crime is a high priority for the
Department of Justice. By investigating allegations of
wrongdoing and by bringing charges where appropriate for criminal
misconduct, the Department promotes critical public interests.
These interests include, to take just a few examples: (1)
protecting the integrity of our free economic and capital
markets; (2) protecting consumers, investors, and business
entities that compete only through lawful means; and (3)
protecting the American people from misconduct that would violate
criminal laws safeguarding the environment.
In this regard, federal prosecutors and corporate leaders
typically share common goals. For example, directors and
officers owe a fiduciary duty to a corporation's shareholders,
the corporation's true owners, and they owe duties of honest
dealing to the investing public in connection with the
corporation's regulatory filings and public statements. The
faithful execution of these duties by corporate leadership serves
the same values in promoting public trust and confidence that our
criminal cases are designed to serve.
A prosecutor's duty to enforce the law requires the
investigation and prosecution of criminal wrongdoing if it is
discovered. In carrying out this mission with the diligence and
resolve necessary to vindicate the important public interests
discussed above, prosecutors should be mindful of the common
cause we share with responsible corporate leaders. Prosecutors
should also be mindful that confidence in the Department is
affected both by the results we achieve and by the real and
perceived ways in which we achieve them. Thus, the manner in
which we do our job as prosecutorsincluding the
professionalism we demonstrate, our willingness to secure the
facts in a manner that encourages corporate compliance and self-
regulation, and also our appreciation that corporate prosecutions
can potentially harm blameless investors, employees, and
othersaffects public perception of our mission. Federal
prosecutors recognize that they must maintain public confidence
in the way in which they exercise their charging discretion.
This endeavor requires the thoughtful analysis of all facts and
circumstances presented in a given case. As always,
professionalism and civility play an important part in the
Department's discharge of its responsibilities in all areas,
including the area of corporate investigations and prosecutions.
[new August 2008]
9-28.200
General Considerations of Corporate Liability
- General Principle:
Corporations should not be
treated leniently because of their artificial nature nor should
they be subject to harsher treatment. Vigorous enforcement of
the criminal laws against corporate wrongdoers, where
appropriate, results in great benefits for law enforcement and
the public, particularly in the area of white collar crime.
Indicting corporations for wrongdoing enables the government to
be a force for positive change of corporate culture, and a force
to prevent, discover, and punish serious crimes.
- Comment:
In all cases involving corporate
wrongdoing, prosecutors should consider the factors discussed
further below. In doing so, prosecutors should be aware of the
public benefits that can flow from indicting a corporation in
appropriate cases. For instance, corporations are likely to take
immediate remedial steps when one is indicted for criminal
misconduct that is pervasive throughout a particular industry,
and thus an indictment can provide a unique opportunity for
deterrence on a broad scale. In addition, a corporate indictment
may result in specific deterrence by changing the culture of the
indicted corporation and the behavior of its employees. Finally,
certain crimes that carry with them a substantial risk of great
public harme.g., environmental crimes or sweeping
financial fraudsmay be committed by a business entity, and
there may therefore be a substantial federal interest in
indicting a corporation under such circumstances.
- In certain instances, it may be appropriate, upon
consideration of the factors set forth herein, to resolve a
corporate criminal case by means other than indictment.
Non-prosecution and deferred prosecution agreements, for example,
occupy an important middle ground between declining prosecution
and obtaining the conviction of a corporation. These agreements
are discussed further in USAM 9-28.1000.
Likewise, civil and regulatory alternatives may be appropriate in certain
cases, as discussed in USAM 9-28.1100.
- Where a decision is made to charge a corporation, it does not
necessarily follow that individual directors, officers,
employees, or shareholders should not also be charged.
Prosecution of a corporation is not a substitute for the
prosecution of criminally culpable individuals within or without
the corporation. Because a corporation can act only through
individuals, imposition of individual criminal liability may
provide the strongest deterrent against future corporate
wrongdoing. Only rarely should provable individual culpability
not be pursued, particularly if it relates to high-level
corporate officers, even in the face of an offer of a corporate
guilty plea or some other disposition of the charges against the
corporation.
- Corporations are "legal persons," capable of suing and being
sued, and capable of committing crimes. Under the doctrine of
respondeat superior, a corporation may be held criminally
liable for the illegal acts of its directors, officers,
employees, and agents. To hold a corporation liable for these
actions, the government must establish that the corporate agent's
actions (i) were within the scope of his duties and (ii) were
intended, at least in part, to benefit the corporation. In all
cases involving wrongdoing by corporate agents, prosecutors
should not limit their focus solely to individuals or the
corporation, but should consider both as potential targets.
- Agents may act for mixed reasonsboth for self-aggrandizement
(both direct and indirect) and for the benefit of
the corporation, and a corporation may be held liable as long as
one motivation of its agent is to benefit the corporation.
See United States v. Potter, 463 F.3d 9, 25 (1st Cir. 2006)
(stating that the test to determine whether an agent is acting
within the scope of employment is "whether the agent is
performing acts of the kind which he is authorized to perform,
and those acts are motivated, at least in part, by an intent to
benefit the corporation."). In United States v. Automated
Medical Laboratories, Inc., 770 F.2d 399 (4th Cir. 1985), for
example, the Fourth Circuit affirmed a corporation's conviction
for the actions of a subsidiary's employee despite the
corporation's claim that the employee was acting for his own
benefit, namely his "ambitious nature and his desire to ascend
the corporate ladder." Id. at 407. The court stated,
"Partucci was clearly acting in part to benefit AML since his
advancement within the corporation depended on AML's well-being
and its lack of difficulties with the FDA." Id.;
see also United States v. Cincotta, 689 F.2d
238, 241-42 (1st Cir. 1982) (upholding a corporation's
conviction, notwithstanding the substantial personal benefit
reaped by its miscreant agents, because the fraudulent scheme
required money to pass through the corporation's treasury and the
fraudulently obtained goods were resold to the corporation's
customers in the corporation's name).
- Moreover, the corporation need not even necessarily profit
from its agent's actions for it to be held liable. In
Automated Medical Laboratories, the Fourth Circuit
stated:
[B]enefit is not a "touchstone of criminal corporate liability; benefit
at best is an evidential, not an operative, fact." Thus, whether the
agent's actions ultimately redounded to the benefit of the corporation
is less significant than whether the agent acted with the intent to
benefit the corporation. The basic purpose of requiring that an agent
have acted with the intent to benefit the corporation, however, is to
insulate the corporation from criminal liability for actions of its
agents which may be inimical to the interests of the corporation
or which may have been undertaken solely to advance the interests of
that agent or of a party other than the corporation.
770 F.2d at 407 (internal citation omitted) (quoting Old
Monastery Co. v. United States, 147 F.2d 905, 908 (4th Cir.
1945)).
[new August 2008]
9-28.300
Factors to Be Considered
- General Principle:
Generally, prosecutors apply
the same factors in determining whether to charge a corporation
as they do with respect to individuals. See
USAM 9-27.220 et seq.
Thus, the prosecutor must weigh all of
the factors normally considered in the sound exercise of
prosecutorial judgment: the sufficiency of the evidence; the
likelihood of success at trial; the probable deterrent,
rehabilitative, and other consequences of conviction; and the
adequacy of noncriminal approaches. See id. However, due
to the nature of the corporate "person," some additional factors
are present. In conducting an investigation, determining whether
to bring charges, and negotiating plea or other agreements,
prosecutors should consider the following factors in reaching a
decision as to the proper treatment of a corporate target:
- the nature and seriousness of the offense, including the risk of harm
to the public, and applicable policies and priorities, if any,
governing the prosecution of corporations for particular
categories of crime (see USAM 9-28.400);
- the pervasiveness of wrongdoing within the corporation, including the
complicity in, or the condoning of, the wrongdoing by corporate
management (see USAM 9-28.500);
- the corporation's history of similar misconduct, including prior
criminal, civil, and regulatory enforcement actions against it
(see USAM 9-28.600);
- the corporation's timely and voluntary disclosure of wrongdoing and
its willingness to cooperate in the investigation of its agents
(see USAM 9-28.700);
- the existence and effectiveness of the corporation's pre-existing
compliance program (see USAM 9-28.800);
- the corporation's remedial actions, including any efforts to
implement an effective corporate compliance program or to improve
an existing one, to replace responsible management, to discipline
or terminate wrongdoers, to pay restitution, and to cooperate with
the relevant government agencies (see USAM 9-28.900);
- collateral consequences, including whether there is disproportionate
harm to shareholders, pension holders, employees, and others not
proven personally culpable, as well as impact on the public
arising from the prosecution (see USAM 9-28.1000);
- the adequacy of the prosecution of individuals responsible for the
corporation's malfeasance; and
- the adequacy of remedies such as civil or regulatory enforcement
actions (see USAM 9-28.1100).
- Comment:
The factors listed in this section are
intended to be illustrative of those that should be evaluated and
are not an exhaustive list of potentially relevant
considerations. Some of these factors may not apply to specific
cases, and in some cases one factor may override all others. For
example, the nature and seriousness of the offense may be such as
to warrant prosecution regardless of the other factors. In most
cases, however, no single factor will be dispositive. In
addition, national law enforcement policies in various
enforcement areas may require that more or less weight be given
to certain of these factors than to others. Of course,
prosecutors must exercise their thoughtful and pragmatic judgment
in applying and balancing these factors, so as to achieve a fair
and just outcome and promote respect for the law.
- In making a decision to charge a corporation, the prosecutor
generally has substantial latitude in determining when, whom,
how, and even whether to prosecute for violations of federal
criminal law. In exercising that discretion, prosecutors should
consider the following statements of principles that summarize
the considerations they should weigh and the practices they
should follow in discharging their prosecutorial
responsibilities. In doing so, prosecutors should ensure that
the general purposes of the criminal lawassurance of
warranted punishment, deterrence of further criminal conduct,
protection of the public from dangerous and fraudulent conduct,
rehabilitation of offenders, and restitution for victims and
affected communitiesare adequately met, taking into account
the special nature of the corporate "person."
- [new August 2008]
9-28.400
Special Policy Concerns
- General Principle:
The nature and seriousness of
the crime, including the risk of harm to the public from the
criminal misconduct, are obviously primary factors in determining
whether to charge a corporation. In addition, corporate conduct,
particularly that of national and multi-national corporations,
necessarily intersects with federal economic, tax, and criminal
law enforcement policies. In applying these Principles,
prosecutors must consider the practices and policies of the
appropriate Division of the Department, and must comply with
those policies to the extent required by the facts presented.
- Comment:
In determining whether to charge a
corporation, prosecutors should take into account federal law
enforcement priorities as discussed above. See
USAM 9-27.230.
In addition, however, prosecutors must be aware
of the specific policy goals and incentive programs established
by the respective Divisions and regulatory agencies. Thus,
whereas natural persons may be given incremental degrees of
credit (ranging from immunity to lesser charges to sentencing
considerations) for turning themselves in, making statements
against their penal interest, and cooperating in the government's
investigation of their own and others' wrongdoing, the same
approach may not be appropriate in all circumstances with respect
to corporations. As an example, it is entirely proper in many
investigations for a prosecutor to consider the corporation's
pre-indictment conduct, e.g., voluntary disclosure,
cooperation, remediation or restitution, in determining whether
to seek an indictment. However, this would not necessarily be
appropriate in an antitrust investigation, in which antitrust
violations, by definition, go to the heart of the corporation's
business. With this in mind, the Antitrust Division has
established a firm policy, understood in the business community,
that credit should not be given at the charging stage for a
compliance program and that amnesty is available only to the
first corporation to make full disclosure to the government. As
another example, the Tax Division has a strong preference for
prosecuting responsible individuals, rather than entities, for
corporate tax offenses. Thus, in determining whether or not to
charge a corporation, prosecutors must consult with the Criminal,
Antitrust, Tax, Environmental and Natural Resources, and National
Security Divisions, as appropriate.
- [new August 2008]
9-28.500
Pervasiveness of Wrongdoing Within the Corporation
- General Principle:
A corporation can only act
through natural persons, and it is therefore held responsible for
the acts of such persons fairly attributable to it. Charging a
corporation for even minor misconduct may be appropriate where
the wrongdoing was pervasive and was undertaken by a large number
of employees, or by all the employees in a particular role within
the corporation, or was condoned by upper management. On the
other hand, it may not be appropriate to impose liability upon a
corporation, particularly one with a robust compliance program in
place, under a strict respondeat superior theory for the
single isolated act of a rogue employee. There is, of course, a
wide spectrum between these two extremes, and a prosecutor should
exercise sound discretion in evaluating the pervasiveness of
wrongdoing within a corporation.
- Comment:
Of these factors, the most important is
the role and conduct of management. Although acts of even
low-level employees may result in criminal liability, a
corporation is directed by its management and management is
responsible for a corporate culture in which criminal conduct is
either discouraged or tacitly encouraged. As stated in
commentary to the Sentencing Guidelines:
Pervasiveness [is] case specific and [will] depend on the number, and
degree of responsibility, of individuals [with] substantial
authority ... who participated in, condoned, or were willfully
ignorant of the offense. Fewer individuals need to be involved for a
finding of pervasiveness if those individuals exercised a relatively
high degree of authority. Pervasiveness can occur either within an
organization as a whole or within a unit of an
organization.
USSG § 8C2.5, cmt. (n. 4).
- [new August 2008]
9-28.600
The Corporation's Past History
- General Principle:
Prosecutors may consider a
corporation's history of similar conduct, including prior
criminal, civil, and regulatory enforcement actions against it,
in determining whether to bring criminal charges and how best to
resolve cases.
- Comment:
A corporation, like a natural person, is
expected to learn from its mistakes. A history of similar
misconduct may be probative of a corporate culture that
encouraged, or at least condoned, such misdeeds, regardless of
any compliance programs. Criminal prosecution of a corporation
may be particularly appropriate where the corporation previously
had been subject to non-criminal guidance, warnings, or
sanctions, or previous criminal charges, and it either had not
taken adequate action to prevent future unlawful conduct or had
continued to engage in the misconduct in spite of the warnings or
enforcement actions taken against it. The corporate structure
itself (e.g., the creation or existence of subsidiaries or
operating divisions) is not dispositive in this analysis, and
enforcement actions taken against the corporation or any of its
divisions, subsidiaries, and affiliates may be considered, if
germane. See USSG § 8C2.5(c), cmt. (n. 6).
- [new August 2008]
9-28.700
The Value of Cooperation
- General Principle:
In determining whether to
charge a corporation and how to resolve corporate criminal cases,
the corporation's timely and voluntary disclosure of wrongdoing
and its cooperation with the government's investigation may be
relevant factors. In gauging the extent of the corporation's
cooperation, the prosecutor may consider, among other things,
whether the corporation made a voluntary and timely disclosure,
and the corporation's willingness to provide relevant information
and evidence and identify relevant actors within and outside the
corporation, including senior executives.
- Cooperation is a potential mitigating factor, by which a
corporationjust like any other subject of a criminal
investigationcan gain credit in a case that otherwise is
appropriate for indictment and prosecution. Of course, the
decision not to cooperate by a corporation (or individual) is not
itself evidence of misconduct, at least where the lack of
cooperation does not involve criminal misconduct or demonstrate
consciousness of guilt (e.g., suborning perjury or false
statements, or refusing to comply with lawful discovery
requests). Thus, failure to cooperate, in and of itself, does
not support or require the filing of charges with respect to a
corporation any more than with respect to an individual.
- Comment:
In investigating wrongdoing by or within
a corporation, a prosecutor is likely to encounter several
obstacles resulting from the nature of the corporation itself.
It will often be difficult to determine which individual took
which action on behalf of the corporation. Lines of authority and
responsibility may be shared among operating divisions or
departments, and records and personnel may be spread throughout
the United States or even among several countries. Where the
criminal conduct continued over an extended period of time, the
culpable or knowledgeable personnel may have been promoted,
transferred, or fired, or they may have quit or retired.
Accordingly, a corporation's cooperation may be critical in
identifying potentially relevant actors and locating relevant
evidence, among other things, and in doing so expeditiously.
- This dynamici.e., the difficulty of determining
what happened, where the evidence is, and which individuals took
or promoted putatively illegal corporate actionscan have
negative consequences for both the government and the corporation
that is the subject or target of a government investigation.
More specifically, because of corporate attribution principles
concerning actions of corporate officers and employees
(see, e.g., supra section II), uncertainty
about exactly who authorized or directed apparent corporate
misconduct can inure to the detriment of a corporation. For
example, it may not matter under the law which of several
possible executives or leaders in a chain of command approved of
or authorized criminal conduct; however, that information if
known might bear on the propriety of a particular disposition
short of indictment of the corporation. It may not be in the
interest of a corporation or the government for a charging
decision to be made in the absence of such information, which
might occur if, for example, a statute of limitations were
relevant and authorization by any one of the officials were
enough to justify a charge under the law. Moreover, and at a
minimum, a protracted government investigation of such an issue
could, as a collateral consequence, disrupt the corporation's
business operations or even depress its stock price.
- For these reasons and more, cooperation can be a favorable
course for both the government and the corporation. Cooperation
benefits the governmentand ultimately shareholders,
employees, and other often blameless victimsby allowing
prosecutors and federal agents, for example, to avoid protracted
delays, which compromise their ability to quickly uncover and
address the full extent of widespread corporate crimes. With
cooperation by the corporation, the government may be able to
reduce tangible losses, limit damage to reputation, and preserve
assets for restitution. At the same time, cooperation may
benefit the corporation by enabling the government to focus its
investigative resources in a manner that will not unduly disrupt
the corporation's legitimate business operations. In addition,
and critically, cooperation may benefit the corporation by
presenting it with the opportunity to earn credit for its
efforts.
- [new August 2008]
9-28.710
Attorney-Client and Work Product Protections
- The attorney-client privilege and the attorney work product
protection serve an extremely important function in the American
legal system. The attorney-client privilege is one of the oldest
and most sacrosanct privileges under the law. See Upjohn v.
United States, 449 U.S. 383, 389 (1981). As the Supreme
Court has stated, "[i]ts purpose is to encourage full and frank
communication between attorneys and their clients and thereby
promote broader public interests in the observance of law and
administration of justice." Id. The value of promoting
a corporation's ability to seek frank and comprehensive legal
advice is particularly important in the contemporary global
business environment, where corporations often face complex and
dynamic legal and regulatory obligations imposed by the federal
government and also by states and foreign governments. The work
product doctrine serves similarly important goals.
- For these reasons, waiving the attorney-client and work
product protections has never been a prerequisite under the
Department's prosecution guidelines for a corporation to be
viewed as cooperative. Nonetheless, a wide range of commentators
and members of the American legal community and criminal justice
system have asserted that the Department's policies have been
used, either wittingly or unwittingly, to coerce business
entities into waiving attorney-client privilege and work-product
protection. Everyone agrees that a corporation may freely waive
its own privileges if it chooses to do so; indeed, such waivers
occur routinely when corporations are victimized by their
employees or others, conduct an internal investigation, and then
disclose the details of the investigation to law enforcement
officials in an effort to seek prosecution of the offenders.
However, the contention, from a broad array of voices, is that
the Department's position on attorney-client privilege and work
product protection waivers has promoted an environment in which
those protections are being unfairly eroded to the detriment of
all.
- The Department understands that the attorney-client privilege
and attorney work product protection are essential and long-
recognized components of the American legal system. What the
government seeks and needs to advance its legitimate (indeed,
essential) law enforcement mission is not waiver of those
protections, but rather the facts known to the corporation about
the putative criminal misconduct under review. In addition,
while a corporation remains free to convey non-factual or "core"
attorney-client communications or work productif and only
if the corporation voluntarily chooses to do soprosecutors
should not ask for such waivers and are directed not to do so.
The critical factor is whether the corporation has provided the
facts about the events, as explained further herein.
- [new August 2008]
9-28.720
Cooperation: Disclosing the Relevant Facts
- Eligibility for cooperation credit is not predicated upon the
waiver of attorney-client privilege or work product protection.
Instead, the sort of cooperation that is most valuable to
resolving allegations of misconduct by a corporation and its
officers, directors, employees, or agents is disclosure of the
relevant facts concerning such misconduct. In this
regard, the analysis parallels that for a non-corporate
defendant, where cooperation typically requires disclosure of
relevant factual knowledge and not of discussions between an
individual and his attorneys.
- Thus, when the government investigates potential corporate
wrongdoing, it seeks the relevant facts. For example, how and
when did the alleged misconduct occur? Who promoted or approved
it? Who was responsible for committing it? In this respect, the
investigation of a corporation differs little from the
investigation of an individual. In both cases, the government
needs to know the facts to achieve a just and fair outcome. The
party under investigation may choose to cooperate by disclosing
the facts, and the government may give credit for the party's
disclosures. If a corporation wishes to receive credit for such
cooperation, which then can be considered with all other
cooperative efforts and circumstances in evaluating how fairly to
proceed, then the corporation, like any person, must disclose the
relevant facts of which it has
knowledge.[FN2]
- (a) Disclosing the Relevant FactsFacts Gathered Through
Internal Investigation
Individuals and corporations often obtain knowledge of facts
in different ways. An individual knows the facts of his or
others' misconduct through his own experience and perceptions. A
corporation is an artificial construct that cannot, by
definition, have personal knowledge of the facts. Some of those
facts may be reflected in documentary or electronic media like
emails, transaction or accounting documents, and other records.
Often, the corporation gathers facts through an internal
investigation. Exactly how and by whom the facts are gathered is
for the corporation to decide. Many corporations choose to
collect information about potential misconduct through lawyers, a
process that may confer attorney-client privilege or attorney
work product protection on at least some of the information
collected. Other corporations may choose a method of fact-
gathering that does not have that effectfor example, having
employee or other witness statements collected after interviews
by non-attorney personnel.
Whichever process the corporation selects, the government's
key measure of cooperation must remain the same as it does for an
individual: has the party timely disclosed the relevant facts
about the putative misconduct? That is the operative question in
assigning cooperation credit for the disclosure of
informationnot whether the corporation discloses
attorney-client or work product materials. Accordingly, a
corporation should receive the same credit for disclosing facts
contained in materials that are not protected by the attorney-
client privilege or attorney work product as it would for
disclosing identical facts contained in materials that are so
protected.[FN3] On this point the Report of the House Judiciary
Committee, submitted in connection with the attorney-client
privilege bill passed by the House of Representatives (H.R.
3013), comports with the approach required here:
[A]n ... attorney of the United States may base cooperation credit
on the facts that are disclosed, but is prohibited from basing
cooperation credit upon whether or not the materials are protected
by attorney-client privilege or attorney work product. As a
result, an entity that voluntarily discloses should receive the
same amount of cooperation credit for disclosing facts that happen
to be contained in materials not protected by attorney-client
privilege or attorney work product as it would receive for
disclosing identical facts that are contained in materials
protected by attorney-client privilege or attorney work product.
There should be no differentials in an assessment of cooperation
(i.e., neither a credit nor a penalty) based upon whether or not
the materials disclosed are protected by attorney-client privilege
or attorney work product. - H.R. Rep. No. 110-445 at 4
(2007).
- In short, so long as the corporation timely discloses
relevant facts about the putative misconduct, the corporation may
receive due credit for such cooperation, regardless of whether it
chooses to waive privilege or work product protection in the
process.[FN4] Likewise, a corporation that does not disclose the
relevant facts about the alleged misconductfor whatever
reasontypically should not be entitled to receive credit
for cooperation.
- Two final and related points bear noting about the disclosure
of facts, although they should be obvious. First, the government
cannot compel, and the corporation has no obligation to make,
such disclosures (although the government can obviously compel
the disclosure of certain records and witness testimony through
subpoenas). Second, a corporation's failure to provide relevant
information does not mean the corporation will be indicted. It
simply means that the corporation will not be entitled to
mitigating credit for that cooperation. Whether the corporation
faces charges will turn, as it does in any case, on the
sufficiency of the evidence, the likelihood of success at trial,
and all of the other factors identified in Section III above. If
there is insufficient evidence to warrant indictment, after
appropriate investigation has been completed, or if the other
factors weigh against indictment, then the corporation should not
be indicted, irrespective of whether it has earned cooperation
credit. The converse is also true: The government may charge
even the most cooperative corporation pursuant to these
Principles if, in weighing and balancing the factors described
herein, the prosecutor determines that a charge is required in
the interests of justice. Put differently, even the most sincere
and thorough effort to cooperate cannot necessarily absolve a
corporation that has, for example, engaged in an egregious,
orchestrated, and widespread fraud. Cooperation is a relevant
potential mitigating factor, but it alone is not dispositive.
- (b) Legal Advice and Attorney Work Product
- Separate from (and usually preceding) the fact-gathering process in an
internal investigation, a corporation, through its officers, employees,
directors, or others, may have consulted with corporate counsel regarding or
in a manner that concerns the legal implications of the putative misconduct
at issue. Communications of this sort, which are both independent of the
fact-gathering component of an internal investigation and made for the
purpose of seeking or dispensing legal advice, lie at the core of the
attorney-client privilege. Such communications can naturally have a
salutary effect on corporate behaviorfacilitating, for example, a
corporation's effort to comply with complex and evolving legal and
regulatory regimes.[FN5]
Except as noted in subparagraphs (b)(i) and (b)(ii) below,
a corporation need not disclose and prosecutors may not request
the disclosure of such communications as a condition for the
corporation's eligibility to receive cooperation credit.
- Likewise, non-factual or core attorney work productfor
example, an attorney's mental impressions or legal
theorieslies at the core of the attorney work product
doctrine. A corporation need not disclose, and prosecutors may
not request, the disclosure of such attorney work product as a
condition for the corporation's eligibility to receive
cooperation credit.
(i) Advice of Counsel Defense in the Instant Context
- Occasionally a corporation or one of its employees may assert
an advice-of-counsel defense, based upon communications with in-
house or outside counsel that took place prior to or
contemporaneously with the underlying conduct at issue. In such
situations, the defendant must tender a legitimate factual basis
to support the assertion of the advice-of-counsel defense.
See, e.g., Pitt v. Dist. of Columbia, 491
F.3d 494, 504-05 (D.C. Cir. 2007); United States v.
Wenger, 427 F.3d 840, 853-54 (10th Cir. 2005); United
States v. Cheek, 3 F.3d 1057, 1061-62 (7th Cir. 1993). The
Department cannot fairly be asked to discharge its responsibility
to the public to investigate alleged corporate crime, or to
temper what would otherwise be the appropriate course of
prosecutive action, by simply accepting on faith an otherwise
unproven assertion that an attorneyperhaps even an unnamed
attorneyapproved potentially unlawful practices.
Accordingly, where an advice-of-counsel defense has been
asserted, prosecutors may ask for the disclosure of the
communications allegedly supporting it.
(ii) Communications in Furtherance of a Crime or Fraud
- Communications between a corporation (through its officers,
employees, directors, or agents) and corporate counsel that are
made in furtherance of a crime or fraud are, under settled
precedent, outside the scope and protection of the attorney-
client privilege. See United States v. Zolin, 491 U.S.
554, 563 (1989); United States v. BDO Seidman, LLP, 492
F.3d 806, 818 (7th Cir. 2007). As a result, the Department may
properly request such communications if they in fact exist.
- [new August 2008]
9-28.730
Obstructing the Investigation
- Another factor to be weighed by the prosecutor is whether
the corporation has engaged in conduct intended to impede the
investigation. Examples of such conduct could include:
inappropriate directions to employees or their counsel, such as
directions not to be truthful or to conceal relevant facts;
making representations or submissions that contain misleading
assertions or material omissions; and incomplete or delayed
production of records.
- In evaluating cooperation, however, prosecutors should not
take into account whether a corporation is advancing or
reimbursing attorneys' fees or providing counsel to employees,
officers, or directors under investigation or indictment.
Likewise, prosecutors may not request that a corporation
refrain from taking such action. This prohibition is not meant
to prevent a prosecutor from asking questions about an attorney's
representation of a corporation or its employees, officers, or
directors, where otherwise appropriate under the law.[FN6]
Neither is it intended to limit the otherwise applicable reach of
criminal obstruction of justice statutes such as 18 U.S.C. § 1503.
If the payment of attorney fees were used in a manner that would otherwise
constitute criminal obstruction of justicefor example, if fees were
advanced on the condition that an employee adhere to a version of the facts
that the corporation and the employee knew to be falsethese Principles
would not (and could not) render inapplicable such criminal prohibitions.
- Similarly, the mere participation by a corporation in a joint defense
agreement does not render the corporation ineligible to receive cooperation
credit, and prosecutors may not request that a corporation refrain from
entering into such agreements. Of course, the corporation may wish to avoid
putting itself in the position of being disabled, by virtue of a particular
joint defense or similar agreement, from providing some relevant facts to
the government and thereby limiting its ability to seek such cooperation
credit. Such might be the case if the corporation gathers facts from
employees who have entered into a joint defense agreement with the
corporation, and who may later seek to prevent the corporation from
disclosing the facts it has acquired. Corporations may wish to address this
situation by crafting or participating in joint defense agreements, to the
extent they choose to enter them, that provide such flexibility as they deem
appropriate.
- Finally, it may on occasion be appropriate for the
government to consider whether the corporation has shared with
others sensitive information about the investigation that the
government provided to the corporation. In appropriate
situations, as it does with individuals, the government may
properly request that, if a corporation wishes to receive credit
for cooperation, the information provided by the government to
the corporation not be transmitted to othersfor example,
where the disclosure of such information could lead to flight by
individual subjects, destruction of evidence, or dissipation or
concealment of assets.
- [new August 2008]
9-28.740
Offering Cooperation: No Entitlement to Immunity
- A corporation's offer of cooperation or cooperation itself
does not automatically entitle it to immunity from prosecution or
a favorable resolution of its case. A corporation should not be
able to escape liability merely by offering up its directors,
officers, employees, or agents. Thus, a corporation's
willingness to cooperate is not determinative; that factor, while
relevant, needs to be considered in conjunction with all other
factors.
- [new August 2008]
9-28.750
Qualifying for Immunity, Amnesty, or Reduced Sanctions Through Voluntary Disclosures
- In conjunction with regulatory agencies and other executive
branch departments, the Department encourages corporations, as
part of their compliance programs, to conduct internal
investigations and to disclose the relevant facts to the
appropriate authorities. Some agencies, such as the Securities
and Exchange Commission and the Environmental Protection Agency,
as well as the Department's Environmental and Natural Resources
Division, have formal voluntary disclosure programs in which
self-reporting, coupled with remediation and additional criteria,
may qualify the corporation for amnesty or reduced sanctions.
Even in the absence of a formal program, prosecutors may consider
a corporation's timely and voluntary disclosure in evaluating the
adequacy of the corporation's compliance program and its
management's commitment to the compliance program. However,
prosecution and economic policies specific to the industry or
statute may require prosecution notwithstanding a corporation's
willingness to cooperate. For example, the Antitrust Division
has a policy of offering amnesty only to the first corporation to
agree to cooperate. Moreover, amnesty, immunity, or reduced
sanctions may not be appropriate where the corporation's business
is permeated with fraud or other crimes.
- [new August 2008]
9-28.760
Oversight Concerning Demands for Waivers of Attorney-Client Privilege or Work Product Protection By Corporations Contrary to This Policy
- The Department underscores its commitment to attorney
practices that are consistent with Department policies like those
set forth herein concerning cooperation credit and due respect
for the attorney-client privilege and work product protection.
Counsel for corporations who believe that prosecutors are
violating such guidance are encouraged to raise their concerns
with supervisors, including the appropriate United States
Attorney or Assistant Attorney General. Like any other
allegation of attorney misconduct, such allegations are subject
to potential investigation through established mechanisms.
- [new August 2008]
9-28.800
Corporate Compliance Programs
- General Principle:
Compliance programs are
established by corporate management to prevent and detect
misconduct and to ensure that corporate activities are conducted
in accordance with applicable criminal and civil laws,
regulations, and rules. The Department encourages such corporate
self-policing, including voluntary disclosures to the government
of any problems that a corporation discovers on its own.
However, the existence of a compliance program is not sufficient,
in and of itself, to justify not charging a corporation for
criminal misconduct undertaken by its officers, directors,
employees, or agents. In addition, the nature of some crimes,
e.g., antitrust violations, may be such that national law
enforcement policies mandate prosecutions of corporations
notwithstanding the existence of a compliance program.
- Comment:
The existence of a corporate compliance
program, even one that specifically prohibited the very conduct
in question, does not absolve the corporation from criminal
liability under the doctrine of respondeat superior. See
United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th
Cir. 1983) ("[A] corporation may be held criminally responsible
for antitrust violations committed by its employees if they were
acting within the scope of their authority, or apparent
authority, and for the benefit of the corporation, even if ...
such acts were against corporate policy or express
instructions."). As explained in United States v. Potter,
463 F.3d 9 (1st Cir. 2006), a corporation cannot "avoid liability
by adopting abstract rules" that forbid its agents from engaging
in illegal acts, because "[e]ven a specific directive to an agent
or employee or honest efforts to police such rules do not
automatically free the company for the wrongful acts of agents."
Id. at 25-26. See also United States v. Hilton Hotels
Corp., 467 F.2d 1000, 1007 (9th Cir. 1972) (noting
that a corporation "could not gain exculpation by issuing general
instructions without undertaking to enforce those instructions by
means commensurate with the obvious risks"); United States v.
Beusch, 596 F.2d 871, 878 (9th Cir. 1979) ("[A]
corporation may be liable for acts of its employees done contrary
to express instructions and policies, but ...the existence of
such instructions and policies may be considered in determining
whether the employee in fact acted to benefit the
corporation.").
- While the Department recognizes that no compliance program
can ever prevent all criminal activity by a corporation's
employees, the critical factors in evaluating any program are
whether the program is adequately designed for maximum
effectiveness in preventing and detecting wrongdoing by employees
and whether corporate management is enforcing the program or is
tacitly encouraging or pressuring employees to engage in
misconduct to achieve business objectives. The Department has no
formulaic requirements regarding corporate compliance programs.
The fundamental questions any prosecutor should ask are: Is the
corporation's compliance program well designed? Is the program
being applied earnestly and in good faith? Does the corporation's
compliance program work? In answering these questions, the
prosecutor should consider the comprehensiveness of the
compliance program; the extent and pervasiveness of the criminal
misconduct; the number and level of the corporate employees
involved; the seriousness, duration, and frequency of the
misconduct; and any remedial actions taken by the corporation,
including, for example, disciplinary action against past
violators uncovered by the prior compliance program, and
revisions to corporate compliance programs in light of lessons
learned.[FN7]
Prosecutors should also consider the promptness of any
disclosure of wrongdoing to the government. In evaluating
compliance programs, prosecutors may consider whether the
corporation has established corporate governance mechanisms that
can effectively detect and prevent misconduct. For example, do
the corporation's directors exercise independent review over
proposed corporate actions rather than unquestioningly ratifying
officers' recommendations; are internal audit functions conducted
at a level sufficient to ensure their independence and accuracy;
and have the directors established an information and reporting
system in the organization reasonably designed to provide
management and directors with timely and accurate information
sufficient to allow them to reach an informed decision regarding
the organization's compliance with the law. See,
e.g., In re Caremark Int'l Inc. Derivative Litig.,
698 A.2d 959, 968-70 (Del. Ch. 1996).
- Prosecutors should therefore attempt to determine whether a
corporation's compliance program is merely a "paper program" or
whether it was designed, implemented, reviewed, and revised, as
appropriate, in an effective manner. In addition, prosecutors
should determine whether the corporation has provided for a staff
sufficient to audit, document, analyze, and utilize the results
of the corporation's compliance efforts. Prosecutors also should
determine whether the corporation's employees are adequately
informed about the compliance program and are convinced of the
corporation's commitment to it. This will enable the prosecutor
to make an informed decision as to whether the corporation has
adopted and implemented a truly effective compliance program
that, when consistent with other federal law enforcement
policies, may result in a decision to charge only the
corporation's employees and agents or to mitigate charges or
sanctions against the corporation.
- Compliance programs should be designed to detect the
particular types of misconduct most likely to occur in a
particular corporation's line of business. Many corporations
operate in complex regulatory environments outside the normal
experience of criminal prosecutors. Accordingly, prosecutors
should consult with relevant federal and state agencies with the
expertise to evaluate the adequacy of a program's design and
implementation. For instance, state and federal banking,
insurance, and medical boards, the Department of Defense, the
Department of Health and Human Services, the Environmental
Protection Agency, and the Securities and Exchange Commission
have considerable experience with compliance programs and can be
helpful to a prosecutor in evaluating such programs. In
addition, the Fraud Section of the Criminal Division, the
Commercial Litigation Branch of the Civil Division, and the
Environmental Crimes Section of the Environment and Natural
Resources Division can assist United States Attorneys' Offices in
finding the appropriate agency office(s) for such
consultation.
- [new August 2008]
9-28.900
Restitution and Remediation
- General Principle:
Although neither a corporation
nor an individual target may avoid prosecution merely by paying a
sum of money, a prosecutor may consider the corporation's
willingness to make restitution and steps already taken to do so.
A prosecutor may also consider other remedial actions, such as
improving an existing compliance program or disciplining
wrongdoers, in determining whether to charge the corporation and
how to resolve corporate criminal cases.
- Comment:
In determining whether or not to
prosecute a corporation, the government may consider whether the
corporation has taken meaningful remedial measures. A
corporation's response to misconduct says much about its
willingness to ensure that such misconduct does not recur. Thus,
corporations that fully recognize the seriousness of their
misconduct and accept responsibility for it should be taking
steps to implement the personnel, operational, and organizational
changes necessary to establish an awareness among employees that
criminal conduct will not be tolerated.
- Among the factors prosecutors should consider and weigh are
whether the corporation appropriately disciplined wrongdoers,
once those employees are identified by the corporation as
culpable for the misconduct. Employee discipline is a difficult
task for many corporations because of the human element involved
and sometimes because of the seniority of the employees
concerned. Although corporations need to be fair to their
employees, they must also be committed, at all levels of the
corporation, to the highest standards of legal and ethical
behavior. Effective internal discipline can be a powerful
deterrent against improper behavior by a corporation's employees.
Prosecutors should be satisfied that the corporation's focus is
on the integrity and credibility of its remedial and disciplinary
measures rather than on the protection of the wrongdoers.
- In addition to employee discipline, two other factors used in
evaluating a corporation's remedial efforts are restitution and
reform. As with natural persons, the decision whether or not to
prosecute should not depend upon the target's ability to pay
restitution. A corporation's efforts to pay restitution even in
advance of any court order is, however, evidence of its
acceptance of responsibility and, consistent with the practices
and policies of the appropriate Division of the Department
entrusted with enforcing specific criminal laws, may be
considered in determining whether to bring criminal charges.
Similarly, although the inadequacy of a corporate compliance
program is a factor to consider when deciding whether to charge a
corporation, that corporation's quick recognition of the flaws in
the program and its efforts to improve the program are also
factors to consider as to appropriate disposition of a case.
- [new August 2008]
9-28.1000
Collateral Consequences
- General Principle:
Prosecutors may consider the
collateral consequences of a corporate criminal conviction or
indictment in determining whether to charge the corporation with
a criminal offense and how to resolve corporate criminal
cases.
- Comment:
One of the factors in determining whether
to charge a natural person or a corporation is whether the likely
punishment is appropriate given the nature and seriousness of the
crime. In the corporate context, prosecutors may take into
account the possibly substantial consequences to a corporation's
employees, investors, pensioners, and customers, many of whom
may, depending on the size and nature of the corporation and
their role in its operations, have played no role in the criminal
conduct, have been unaware of it, or have been unable to prevent
it. Prosecutors should also be aware of non-penal sanctions that
may accompany a criminal charge, such as potential suspension or
debarment from eligibility for government contracts or federally
funded programs such as health care programs. Determining
whether or not such non-penal sanctions are appropriate or
required in a particular case is the responsibility of the
relevant agency, and is a decision that will be made based on the
applicable statutes, regulations, and policies.
- Virtually every conviction of a corporation, like virtually
every conviction of an individual, will have an impact on
innocent third parties, and the mere existence of such an effect
is not sufficient to preclude prosecution of the corporation.
Therefore, in evaluating the relevance of collateral
consequences, various factors already discussed, such as the
pervasiveness of the criminal conduct and the adequacy of the
corporation's compliance programs, should be considered in
determining the weight to be given to this factor. For instance,
the balance may tip in favor of prosecuting corporations in
situations where the scope of the misconduct in a case is
widespread and sustained within a corporate division (or spread
throughout pockets of the corporate organization). In such
cases, the possible unfairness of visiting punishment for the
corporation's crimes upon shareholders may be of much less
concern where those shareholders have substantially profited,
even unknowingly, from widespread or pervasive criminal activity.
Similarly, where the top layers of the corporation's management
or the shareholders of a closely-held corporation were engaged in
or aware of the wrongdoing, and the conduct at issue was accepted
as a way of doing business for an extended period, debarment may
be deemed not collateral, but a direct and entirely appropriate
consequence of the corporation's wrongdoing.
- On the other hand, where the collateral consequences of a
corporate conviction for innocent third parties would be
significant, it may be appropriate to consider a non-prosecution
or deferred prosecution agreement with conditions designed, among
other things, to promote compliance with applicable law and to
prevent recidivism. Such agreements are a third option, besides
a criminal indictment, on the one hand, and a declination, on the
other. Declining prosecution may allow a corporate criminal to
escape without consequences. Obtaining a conviction may produce
a result that seriously harms innocent third parties who played
no role in the criminal conduct. Under appropriate
circumstances, a deferred prosecution or non-prosecution
agreement can help restore the integrity of a company's
operations and preserve the financial viability of a corporation
that has engaged in criminal conduct, while preserving the
government's ability to prosecute a recalcitrant corporation that
materially breaches the agreement. Such agreements achieve other
important objectives as well, like prompt restitution for victims.[FN8]
Ultimately, the appropriateness of a criminal charge
against a corporation, or some lesser alternative, must be
evaluated in a pragmatic and reasoned way that produces a fair
outcome, taking into consideration, among other things, the
Department's need to promote and ensure respect for the law.
- [new August 2008]
9-28.1100
Other Civil or Regulatory Alternatives
- General Principle:
Non-criminal alternatives to
prosecution often exist and prosecutors may consider whether such
sanctions would adequately deter, punish, and rehabilitate a
corporation that has engaged in wrongful conduct. In evaluating
the adequacy of non-criminal alternatives to
prosecutione.g., civil or regulatory enforcement
actionsthe prosecutor may consider all relevant factors,
including:
- the sanctions available under the alternative means of
disposition;
- the likelihood that an effective sanction will be imposed; and
- the effect of non-criminal disposition on federal law enforcement
interests.
- Comment:
The primary goals of criminal law are
deterrence, punishment, and rehabilitation. Non-criminal
sanctions may not be an appropriate response to a serious
violation, a pattern of wrongdoing, or prior non-criminal
sanctions without proper remediation. In other cases, however,
these goals may be satisfied through civil or regulatory actions.
In determining whether a federal criminal resolution is
appropriate, the prosecutor should consider the same factors
(modified appropriately for the regulatory context) considered
when determining whether to leave prosecution of a natural person
to another jurisdiction or to seek non-criminal alternatives to
prosecution. These factors include: the strength of the
regulatory authority's interest; the regulatory authority's
ability and willingness to take effective enforcement action; the
probable sanction if the regulatory authority's enforcement
action is upheld; and the effect of a non-criminal disposition on
federal law enforcement interests. See
USAM 9-27.240,
9-27.250.
- [new August 2008]
9-28.1200
Selecting Charges
- General Principle:
Once a prosecutor has decided to
charge a corporation, the prosecutor at least presumptively
should charge, or should recommend that the grand jury charge,
the most serious offense that is consistent with the nature of
the defendant's misconduct and that is likely to result in a
sustainable conviction.
- Comment:
Once the decision to charge is made, the
same rules as govern charging natural persons apply. These rules
require "a faithful and honest application of the Sentencing
Guidelines" and an "individualized assessment of the extent to
which particular charges fit the specific circumstances of the
case, are consistent with the purposes of the Federal criminal
code, and maximize the impact of Federal resources on crime."
See USAM 9-27.300.
In making this determination, "it
is appropriate that the attorney for the government consider,
inter alia, such factors as the [advisory] sentencing
guideline range yielded by the charge, whether the penalty
yielded by such sentencing range ...is proportional to the
seriousness of the defendant's conduct, and whether the charge
achieves such purposes of the criminal law as punishment,
protection of the public, specific and general deterrence, and
rehabilitation." Id.
- [new August 2008]
9-28.1300
Plea Agreements with Corporations
- General Principle:
In negotiating plea agreements
with corporations, as with individuals, prosecutors should
generally seek a plea to the most serious, readily provable
offense charged. In addition, the terms of the plea agreement
should contain appropriate provisions to ensure punishment,
deterrence, rehabilitation, and compliance with the plea
agreement in the corporate context. Although special
circumstances may mandate a different conclusion, prosecutors
generally should not agree to accept a corporate guilty plea in
exchange for non-prosecution or dismissal of charges against
individual officers and employees.
- Comment:
Prosecutors may enter into plea
agreements with corporations for the same reasons and under the
same constraints as apply to plea agreements with natural
persons. See USAM 9-27.400-530.
This means,inter alia, that the corporation should generally be
required to plead guilty to the most serious, readily provable
offense charged. In addition, any negotiated departures or
recommended variances from the advisory Sentencing Guidelines
must be justifiable under the Guidelines or 18 U.S.C. § 3553
and must be disclosed to the sentencing court. A corporation
should be made to realize that pleading guilty to criminal
charges constitutes an admission of guilt and not merely a
resolution of an inconvenient distraction from its business. As
with natural persons, pleas should be structured so that the
corporation may not later "proclaim lack of culpability or even
complete innocence." See
USAM 9-27.420(b)(4), 9-27.440,
9-27.500. Thus, for instance, there
should be placed upon the record a sufficient factual basis for
the plea to prevent later corporate assertions of innocence.
- A corporate plea agreement should also contain provisions
that recognize the nature of the corporate "person" and that
ensure that the principles of punishment, deterrence, and
rehabilitation are met. In the corporate context, punishment and
deterrence are generally accomplished by substantial fines,
mandatory restitution, and institution of appropriate compliance
measures, including, if necessary, continued judicial oversight
or the use of special masters or corporate monitors. See
USSG §§ 8B1.1, 8C2.1, et seq. In addition,
where the corporation is a government contractor, permanent or
temporary debarment may be appropriate. Where the corporation
was engaged in fraud against the government (e.g.,
contracting fraud), a prosecutor may not negotiate away an
agency's right to debar or delist the corporate defendant.
- In negotiating a plea agreement, prosecutors should also
consider the deterrent value of prosecutions of individuals
within the corporation. Therefore, one factor that a prosecutor
may consider in determining whether to enter into a plea
agreement is whether the corporation is seeking immunity for its
employees and officers or whether the corporation is willing to
cooperate in the investigation of culpable individuals as
outlined herein. Prosecutors should rarely negotiate away
individual criminal liability in a corporate plea.
- Rehabilitation, of course, requires that the corporation
undertake to be law-abiding in the future. It is, therefore,
appropriate to require the corporation, as a condition of
probation, to implement a compliance program or to reform an
existing one. As discussed above, prosecutors may consult with
the appropriate state and federal agencies and components of the
Justice Department to ensure that a proposed compliance program
is adequate and meets industry standards and best practices.
See USAM 9-28.800.
- In plea agreements in which the corporation agrees to
cooperate, the prosecutor should ensure that the cooperation is
entirely truthful. To do so, the prosecutor may request that the
corporation make appropriate disclosures of relevant factual
information and documents, make employees and agents available
for debriefing, file appropriate certified financial statements,
agree to governmental or third-party audits, and take whatever
other steps are necessary to ensure that the full scope of the
corporate wrongdoing is disclosed and that the responsible
personnel are identified and, if appropriate, prosecuted.
See generally USAM 9-28.700. In taking such
steps, Department prosecutors should recognize that
attorney-client communications are often essential to a corporation's
efforts to comply with complex regulatory and legal regimes, and
that, as discussed at length above, cooperation is not measured
by the waiver of attorney-client privilege and work product
protection, but rather is measured by the disclosure of facts and
other considerations identified herein such as making witnesses
available for interviews and assisting in the interpretation of
complex documents or business records.
- These Principles provide only internal Department of Justice
guidance. They are not intended to, do not, and may not be
relied upon to create any rights, substantive or procedural,
enforceable at law by any party in any matter civil or criminal.
Nor are any limitations hereby placed on otherwise lawful
litigative prerogatives of the Department of Justice.
- [new August 2008]
FN 1. While these guidelines refer
to corporations, they apply to the consideration of the prosecution of all
types of business organizations, including partnerships, sole
proprietorships, government entities, and unincorporated associations.
FN 2. There are other dimensions of
cooperation beyond the mere disclosure of facts, of course. These can
include, for example, providing non-privileged documents and other evidence,
making witnesses available for interviews, and assisting in the
interpretation of complex business records. This section of the Principles
focuses solely on the disclosure of facts and the privilege issues that may
be implicated thereby.
FN 3. By way of example, corporate
personnel are typically interviewed during an internal investigation. If
the interviews are conducted by counsel for the corporation, certain notes
and memoranda generated from the interviews may be subject, at least in
part, to the protections of attorney-client privilege and/or attorney work
product. To receive cooperation credit for providing factual information,
the corporation need not produce, and prosecutors may not request, protected
notes or memoranda generated by the lawyers' interviews. To earn such
credit, however, the corporation does need to produce, and prosecutors may
request, relevant factual informationincluding relevant factual
information acquired through those interviews, unless the identical
information has otherwise been providedas well as relevant
non-privileged evidence such as accounting and business records and emails
between non-attorney employees or agents.
FN 4. In assessing the timeliness of
a corporation's disclosures, prosecutors should apply a standard of
reasonableness in light of the totality of circumstances.
FN 5. These privileged
communications are not necessarily limited to those that occur
contemporaneously with the underlying misconduct. They would include, for
instance, legal advice provided by corporate counsel in an internal
investigation report. Again, the key measure of cooperation is the
disclosure of factual information known to the corporation, not the
disclosure of legal advice or theories rendered in connection with the
conduct at issue (subject to the two exceptions noted in
USAM 9-28.720(b)(i-ii)).
FN 6. Routine questions regarding
the representation status of a corporation and its employees, including how
and by whom attorneys' fees are paid, sometimes arise in the course of an
investigation under certain circumstancesto take one example, to assess
conflict-of-interest issues. Such questions can be appropriate and this
guidance is not intended to prohibit such limited inquiries.
FN 7. For a detailed review of
these and other factors concerning corporate compliance programs, see USSG
§ 8B2.1.
FN 8.
Prosecutors should note that in the case of national or multi-national
corporations, multi-district or global agreements may be necessary. Such
agreements may only be entered into with the approval of each affected
district or the appropriate Department official. See
USAM 9-27.641.
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