Biden Administration Revisions to the Principles of Federal Prosecution of Business Organizations

Jan. 10, 2022, 9:51 a.m. | bgarrett

It has been twenty years since U.S. Department of Justice (DOJ) first published guidelines for the criminal prosecution of corporations, in the fall of 2019. American law on corporate criminal liability dates back to the 19th century. However, it was not until the end of the 20th Century that investigating and prosecuting corporations and their employees became a major feature of criminal justice in the United States, chiefly at the federal level. Billion-dollar fines are now routine, where they were unimaginable two decades ago, across a range of industries, from banking, to pharmaceuticals, to defense, and energy. Moreover, the practice has become increasingly international in scope, with large multinational corporate crime investigations in the United States, and increasing cooperation between countries. The Corporate Prosecution Registry was created to track these developments and provide a resource to corporate prosecution practitioners, policymakers, and researchers. Not only has the Registry grown, but federal practice has changed. We have continued to see updated prosecution guidelines, as each presidential Administration puts its stamp on an evolving approach towards prosecuting corporations, by adding to a now quite lengthy set of principles in the U.S. Attorney Manual. In response to criticism of the lack of individual accountability in corporate prosecution cases, the DOJ adopted the Yates Memo approach in Fall 2015 by focusing on individual investigation and prosecution in its corporate prosecution guidelines. Under the Obama Administration, the DOJ also increasingly emphasized rigorous review of corporate compliance programs. In February 2017, the DOJ's Criminal Fraud Section produced new guidance on corporate compliance. The Trump Administration declined to renew the Compliance Counsel who supervised that compliance effort, but did reissue and bolster that guidance document. In 2017 and 2018, the Department of Justice made a series of other changes designed to reduce the impact of criminal prosecutions, including stepping away from the Yates memo focus on individual prosecutions, statements discouraging use of corporate monitors, and policies seeking to limit “piling on” of corporate fines. Most recently, in Fall 2021, the Biden Administration announced further changes to these organizational prosecution guidelines, by restoring the Yates Memo guidance that a company must provide non-privileged information about all individuals involved in the misconduct to be eligible for cooperation credit, making it clear that a corporate monitor may be appropriate in any case, and making clear that a companies’ entire criminal, civil, and regulatory record should be relevant. We will no doubt see further revisions to those organizational prosecution guidelines in the years ahead. The government, the private bar, the bench, the academy, and the press continue to debate and refine that particulars of how to punish and deter crime within the large modern corporation. We hope that our Registry continues to provide a clearinghouse for the most comprehensive data to inform such discussions.