Recent guidance by the United States Department of Justice (“DOJ”) reveals that the government may leverage “cooperation credit” under the “Principles of Federal Prosecution of Business Organizations” (authored by former Deputy Attorney General Mark Filip, i.e., the “Filip Memorandum”) to obtain foreign-based information that is outside the scope of a federal grand jury subpoena. And, while this issue was recently previewed in the anti-corruption and anti-bribery context, there is no reason to believe that it may be so limited going forward.
In September, the DOJ released new policy guidance regarding its intent to incentivize changes in corporate culture by investigating and/or prosecuting culpable individuals. The linchpin of that guidance, announced by Deputy Attorney General Sally Q. Yates in a memorandum entitled “Individual Accountability for Corporate Wrongdoing” (the “Yates Memorandum”), is the DOJ’s express linkage of any “cooperation credit” for an organizational defendant to the disclosure—by the company to the government—of “all relevant facts about individual misconduct” and “all individuals involved in or responsible for the misconduct at issue” (emphasis added).
The Yates Memorandum amended the Filip Memorandum with respect to cooperation credits. That is, to emphasize the significance of holding individual wrongdoers accountable for corporate misconduct, prosecutors may not consider a reduction or elimination of penalties for cooperating organizational defendants unless the company conducts a thorough investigation into the scope of the wrongdoing, identifies potentially culpable wrongdoers (including executives), and timely provides the DOJ with all relevant facts concerning the same.
Prosecutors, corporate business and legal professionals, and members of the defense bar continue to consider the import of the Yates Memorandum, both as a general matter and, according to recent public statements, in connection with the production of foreign-based documents and information that might be outside the scope of a federal grand jury subpoena. Put another way, because a federal grand jury subpoena may only be served in the United States (or on a United States national or resident in a foreign country), there is a question regarding whether the government may obtain overseas evidence that it otherwise may not be able to access as a feature of a company’s cooperation under the Yates Memorandum.
The risk is unique given the inherent tension between the government’s recent demand for all information and facts related to wrongdoing and a corporation’s eligibility for cooperation credit, particularly where critical emails or documents may be located in foreign jurisdictions that are outside the scope of compulsory process. The DOJ acknowledged this issue on November 17, 2015, when Assistant Attorney General Leslie R. Caldwell delivered remarks during the American Conference Institute’s 32nd Annual International Conference on the Foreign Corrupt Practices Act. In addressing the Yates Memorandum, Assistant Attorney General Caldwell explained that “[i]n addition to identifying the individuals involved, full cooperation includes providing timely updates on the status of the internal investigation, making officers and employees available for interviews—to the extent this is within the company’s control—and proactive document production, especially for evidence located in foreign countries” (emphasis added).