At White Collar Crime Institute, DOJ Reiterates Focus on Individual Accountability in Corporate Crime Investigations

In their March 3, 2022, speeches to the 37th American Bar Association (ABA) National Institute on White Collar Crime, Attorney General Merrick Garland and Assistant Attorney General Kenneth Polite Jr. both emphasized the Department of Justice’s (DOJ) commitment to hold individuals — and not just corporations — responsible for white collar crimes.^[1]

These speeches follow an address from Deputy Attorney General Lisa Monaco last October to the National Institute on White Collar Crime (see our prior alert here), in which she stated that “[a]ccountability starts with the individuals responsible for criminal conduct” and announced DOJ policy shifts in the prosecution of corporate crime, including the requirement that cooperating corporations identify all individuals involved in wrongdoing, the guidance to prosecutors to consider a corporation’s historical misconduct when considering corporate resolutions, and an expansion in the use of corporate monitors to ensure continuing compliance with criminal resolutions.^[2]    

Garland’s Remarks on Individual Accountability

Garland reiterated the DOJ’s commitment to aggressively prosecute corporate crimes, noting that the failure to do so “weakens our democratic institutions by undermining public trust in the rule of law” and “leads citizens to doubt” that the government treats cases against the rich and powerful the same as cases against the poor and powerless. His speech expanded on Monaco’s discussion, in her October address, of individual accountability. Echoing Monaco, Garland said that under his leadership, “the Department’s first priority in corporate criminal cases is to prosecute the individuals who commit and profit from corporate malfeasance” because “the prospect of personal liability … is the best deterrent to corporate crime.”

Garland acknowledged the expense of individual prosecutions but said that the administration is seeking budget increases to cover the cost of hiring 120 new attorneys for the Criminal Division and U.S. attorney’s offices and 900 new agents for the FBI’s White Collar Crime Program.

Garland also highlighted three “force-multipliers” that would help bolster the DOJ’s resources. First, the DOJ is leveraging its “partnerships at every level of government and around the world” in order to address issues ranging from the corruption of oligarchs to pandemic fraud. Second, the DOJ has expanded its data analytics work to identify fraud and “data-driven corporate crimes.” Third, Garland called on defense counsel to remember the DOJ’s position that, to be eligible for cooperation credit, corporations must provide nonprivileged information about all individuals who are involved in misconduct “regardless of their position, status, or seniority” and regardless of whether counsel views that individual’s involvement as “substantial.”

As he concluded his address, Garland touted the 10% increase from 2020 to 2021 in charges against individuals for white collar crimes and predicted that “enforcement activity will only accelerate as we come out of the pandemic.”

Polite’s Remarks on Protecting Victims

Polite turned the focus from wrongdoers to victims. He argued that although it can be relatively difficult to identify victims of white collar crimes and calculate injuries, “[c]onsidering victims must be at the center of our white-collar cases.” Polite said that, in addition to shifting DOJ resources toward victim advocacy, the Criminal Division will begin asking for more comprehensive discussion of victim impact during Filip Factors presentations — the meetings that occur between defense counsel and prosecutors when the DOJ is considering bringing criminal charges against a corporation. Polite also called on defense counsel to think about potential victims when investigating corporate wrongdoing and to quickly report misconduct to law enforcement officials so they can intervene quickly to mitigate the damage.

Polite tied the DOJ’s commitment to prosecuting individuals for white collar crimes to his focus on victims, explaining that such prosecutions are a “means to pursuing justice for individuals.” Polite also revisited the disclosure requirements for cooperation credit, asserting that the policies would “plainly serve our goal of securing evidence of individual wrongdoing because of the high priority that we place upon holding individual wrongdoers accountable.”

He explained that when DOJ attorneys ask about remedial actions and compliance programs, they are questioning the ways that personal accountability is ensured. Polite suggested that there are situations when a company “should examine whether a change in leadership is necessary” when misconduct occurs even if there is no evidence that an individual committed a crime. 

In closing, Polite called on attendees to again consider victims of white collar crimes: “Tell me about how you are effecting change to ensure that we bring justice to the wronged and the wrongdoers. Tell me about the people.”

Pushback on Policy Shifts

The pendulum swing toward demanding individual accountability for corporate wrongdoing will increase the costs, both monetary and personal, of cooperation with the DOJ. At a session during the conference, Kathryn Ruemmler, a former principal associate deputy attorney general, White House counsel, and the current general counsel of Goldman Sachs, expressed her concern “that in the zeal to focus on individuals,” the DOJ might “start bringing cases where there’s a real question about whether or not someone has really engaged in criminal wrongdoing.”^[3] Concerns like these might create a risk that corporations will, in fact, be more reluctant to report misconduct.

^[1] _{Attorney General Merrick B. Garland Delivers Remarks to the ABA Institute on White Collar Crime, U.S. Dep’t of Justice (March 3, 2022), https://www.justice.gov/opa/speech/attorney-general-merrick-b-garland-delivers-remarks-aba-institute-white-collar-crime; Assistant Attorney General Kenneth A. Polite Jr. Delivers Justice Department Keynote at the ABA Institute on White Collar Crime, U.S. Dep’t of Justice (March 3, 2022), https://www.justice.gov/opa/speech/assistant-attorney-general-kenneth-polite-jr-delivers-justice-department-keynote-aba.}

^[2] _{Deputy Attorney General Lisa O. Monaco Gives Keynote Address at ABA’s 36th National Institute on White Collar Crime, U.S. Dep’t of Justice (Oct. 28, 2021), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute.}

^[3] _{Goldman Sachs Legal Chief Knocks Biden DOJ on White Collar Shift, Bloomberg Law (March 4, 2022), https://news.bloomberglaw.com/us-law-week/goldman-sachs-legal-chief-knocks-biden-doj-on-white-collar-shift. Ruemmler also expressed skepticism about the effectiveness of monitorships, stating that “monitors should really be reserved for the quite unusual case.”}