Annex D
TITLE 9, CHAPTER 9-28.000
PRINCIPLES OF
FEDERAL PROSECUTION
OF BUSINESS
ORGANIZATIONS
9-28.000 Principles of Federal Prosecution
of Business Organizations
9-28.100 Duties of Federal Prosecutors and
Duties of Corporate Leaders
9-28.200 General Considerations of Corporate
Liability
9-28.300 Factors to Be Considered
9-28.400 Special Policy Concerns
9-28.500 Pervasiveness of Wrongdoing Within
the Corporation
9-28.600 The Corporation's Past History
9-28.700 The Value of Cooperation
9-28.710 Attorney-Client and Work Product
Protections
9-28.720 Cooperation: Disclosing the Relevant
Facts
9-28,730 Obstructing the In vestigation
9-28.740 Offering Cooperation: No Entitlement
to Immunity
9-28.750 Qualifying for Immunity, Amnesty,
or Reduced Sanctions Through Voluntary Disclosures
9-28.760 Oversight Concerning Demands for
Waivers of Attorney-Client Privilege or Work Product By Corporations
Contrary to This Policy
9-28.800 Corporate Compliance Programs
9-28.900 Restitution and Remediation
9-28.1000 Collateral Consequences
9-28.1100 Other Civil or Regulatory Alternatives
9-28.1200 Selecting Charges
9-28.1300 Plea Agreements with Corporations
9-28.000 Principles of Federal Prosecution
of Business Organizations[265]
9-28.100 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 prosecutors—including 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 others—affects 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.
9-28.200 General Considerations of Corporate
Liability
A. 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.
B. 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
harm—eg, environmental crimes or sweeping financial frauds—may
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 Section X, infra. Likewise, civil and regulatory alternatives
may be appropriate in certain cases, as discussed in Section XI,
infra.
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 respondent 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 reasons—both
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 F3d 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:
Benefit 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)).
9-28.300 Factors to Be Considered
A. 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:
1. 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 infra section IV);
2. the pervasiveness of wrongdoing within the
corporation, including the complicity in, or the condoning of,
the wrongdoing by corporate management (see infra section
V);
3. the corporation's history of similar misconduct,
including prior criminal, civil, and regulatory enforcement actions
against it (see infra section VI);
4. the corporation's timely and voluntary disclosure
of wrongdoing and its willingness to cooperate in the investigation
of its agents (see infra section VII);
5. the existence and effectiveness of the corporation's
pre-existing compliance program (see infra section VIII);
6. 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 infra
section IX);
7. 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 infra
section X);
8. the adequacy of the prosecution of individuals
responsible for the corporation's malfeasance; and
9. the adequacy of remedies such as civil or
regulatory enforcement actions (see infra section XI).
B. 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 law—assurance 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 communities—are adequately met,
taking into account the special nature of the corporate "person."
9-28.400 Special Policy Concerns
A. 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.
B. 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
he 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 prospector to consider the corporation's pre-indictment conduct,
eg, voluntary disclosure, cooperation, remediation or restitution,
in determining whether to seek an indictment. However, this would
not neeessarily 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 corpoiation 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 offences. Thus, in deteimining 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.
9-28.500 Pervasiveness of Wrongdoing Within
the Corporation
A. 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.
B. 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).
9-28.600 The Corporation's Past History
A. 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.
B. 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 (eg,
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).
9-28.700 The Value of Cooperation
A. 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 corporation—just like any other subject of a
criminal investigation—can 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 (eg, 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.
B. 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 dynamic—ie, the difficulty
of determining what happened, where the evidence is, and which
individuals took or promoted putatively illegal corporate actions—can
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, eg, 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 government—and ultimately shareholders,
employees, and other often blameless victims—by 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.
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-recognised 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 product—if and only if the corporation
voluntarily chooses to do so—prosecutors 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.
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.[266]
(a) Disclosing the Relevant Facts—Facts
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 effect—for
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
information—not 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.[267]
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 (ie, 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 fee 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.[268]
Likewise, a corporation that does not disclose the relevant facts
about the alleged misconduct—for whatever reason—typically
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 behavior—facilitating, for
example, a corporation's effort to comply with complex and evolving
legal and regulatory regimes.[269]
Except as noted in subparagraphs (b)(1) 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
product—for example, an attorney's mental impressions or
legal theories—lies 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 eg, Pitt v~District
of Columbia, 491 F.3d 494, 504-05 (D.C. Cir. 2007);
United States v. Wenger, 427 F.3d 840, 853-54 (I0th
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 attorney—perhaps even, an unnamed
attorney—approved 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
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.[270]
Neither is it intended to limit the otherwise applicable reach
of criminal obstruction of justice statutes such as 18 US.C.
§ 1503. If the payment of attorney fees were used in a manner
that would otherwise constitute criminal obstruction of justice—for
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 false—these 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 others—for example, where the disclosure
of such information could lead to flight by individual subjects,
destruction of evidence, or dissipation or concealment of assets.
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.
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.
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.
9-28.800 Corporate Compliance Programs
A. 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, eg, antitrust
violations, may be such that national law enforcement policies
mandate prosecutions of corporations notwithstanding the existence
of a compliance program.
B. 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 respondent superior. See Untied 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.[271]
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, eg, In re Caremark hit'I 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.
9-28.900 Restitution and Remediation
A. 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.
B. 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.
9-28.1000 Collateral Consequences
A. 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.
B. 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 coiporation 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.[272]
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.
9-28.1100 Other Civil or Regulatory Alternatives
A. 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 prosecution—eg,
civil or regulatory enforcement: actions—the prosecutor
may consider all relevant factors, including:
1. the sanctions available under the alternative
means of disposition;
2. the likelihood that an effective sanction
will be imposed; and
3. the effect of non-criminal disposition on
federal law enforcement interests.
B. 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.
9-28,1200 Selecting Charges
A. 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.
B. 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.
9—28.1300 Plea Agreements with Corporations
A. 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 far non-prosecution
or dismissal of charges against individual officers and employees.
B. 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 basts 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 (eg, 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
supra section VIII.
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
supra section VII. 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.
265 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. Back
266
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. Back
267
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 information-including
relevant factual information acquired through those interviews,
unless the identical information has otherwise been provided-as
well as relevant non-privileged evidence such as accounting and
business records and emails between non-attorney employees or
agents Back
268
In assessing the timeliness of a corporation's disclosures, prosecutors
should apply a standard of reasonableness in light of the totality
of circumstances. Back
269
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 Section. VII(2)(b)(i-ii)). Back
270
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 circumstances-to 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. Back
271
For a detailed review of these and other factors concerning corporate
compliance programs, see USSG § 8B2.1. Back
272
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 id. § 9-27.641. Back
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