The question is, however, did we all try to read between the lines too much, or too little?
Attorney General Jeff Sessions was a keynote speaker at the 2017 Ethics & Compliance Initiative’s Annual Conference last week. Whatever your politics are, it was important that we hear from him on his priorities for enforcement of corporate wrongdoing. We heard a lot of things that an audience filled with ethics and compliance professionals would expect to hear during his scripted remarks. And, ECI’s CEO, Pat Harned, did a great job during the Q&A discussion, which offered a few more quotable moments from the AG.
The question is, however, did we all try to read between the lines too much, or too little? Below is what we heard. The next question is what will we see? Three themes emerged from his scripted remarks.
First, AG Sessions said that the Department of Justice (DOJ) is committed to enforcing all laws, including FCPA and the prosecution of white collar crime.
“As we re-double our efforts to combat violent crime, we will still enforce the laws that protect American consumers and ensure that honest businesses aren’t placed at a disadvantage. This Department of Justice will continue to investigate and prosecute corporate fraud and misconduct; bribery; public corruption; organized crime; trade-secret theft; money laundering; securities fraud; government fraud; health care fraud; and Internet fraud, among others.”
As implied in the quote above, the second theme was one of leveling the playing field to ensure American organizations are not operating at a disadvantage to unfair competition. This is very much in line with what we have been hearing from the administration’s “America First” focus.
“Our department wants to create an even playing field for law-abiding companies. We will continue to strongly enforce the FCPA and other anti-corruption laws. Companies should succeed because they provide superior products and services, not because they have paid off the right people.”
To further emphasize this focus, during the Q&A, AG Sessions said he is open to suggestions from this community on how they could look for issues that are hurting American companies.
The final point of focus in his prepared remarks was that of bringing individual wrongdoers to justice. This too is intended to keep companies whole if the misconduct threatening the organization is isolated to an individual or individuals.
“The Department of Justice will continue to emphasize the importance of holding individuals accountable for corporate misconduct. It is not merely companies, but specific individuals, who break the law. We will work closely with our law enforcement partners, both here and abroad, to bring these persons to justice.”
During the Q&A, the AG said that stockholders should not pay the price for wrongdoing of individuals. “Corporate sharpies who have cut corners should be prosecuted.” He went on to say that corporations cannot be a “guarantor” for thousands of employees when one person goes awry.
So What Are We to Make of What We Heard?
If I could be allowed a little flexibility to read between the lines – which as a compliance professional is almost a job requirement – here are some of my takeaways.
First, enforcing FCPA and prosecuting white collar crime is a priority but not THE priority.
First, enforcing FCPA and prosecuting white collar crime is a priority but not the priority. That is not to say the distinction is right or wrong, just clear. AG Sessions identified his two top priorities as “turning back recent increases in violent crime” and “to restore a lawful system of immigration.” There is only so much time and resources to put into “enforcing all crimes.” If resources happen to become limited, it may be the white collar crimes that will be deprioritized, but based on his remarks, we should not expect to see organizations getting a free pass on law-breaking.
Second, in regard to leveling the playing field for honest companies, it was encouraging to hear that the effectiveness of compliance programs will continue to be taken into account as part of investigations.
“We have done our part to reward effective compliance programs and to better understand your efforts; you have my commitment that we will continue to do so.”
Lastly, on his point about prosecuting individual wrongdoers. This brings us to the Yates Memo. It was never mentioned in name but described with accuracy. There did seem to be a difference of perspective, however, on the intended purpose of prosecuting an individual. The Yates Memo strived to ensure wrongdoers would not be allowed to hide in their company’s shadows and to deter would-be wrongdoers. AG Sessions emphasized the idea that prosecuting individuals would be beneficial to shareholders and organizations as a whole, which may otherwise be crippled from charges. Both purposes are valid. What I am interested in seeing is if individual prosecution turns into a scapegoating defense for organizations that in fact do have more widespread corruption yet are now able to hide behind an individual’s shadow.
AG Sessions offered an invitation to our community to share suggestions with him particularly on incentives and protecting American companies from unfair competition. Ms. Harned quickly told him that we would take him up on this – and we should. ECI has strived for decades to ensure that we have an ongoing dialogue with the prosecutor community and now more than ever, we need to keep these lines of communication open.
Those are my thoughts on what I heard. Here’s a link to Mr. Session’s remarks at ECI. Use the comments section below to share your thoughts.