Monaco Speech: Part 5 – What does it all mean? | Thomas Renard


This week I wrote about the speech Deputy Attorney General (DAG) Lisa O. Monaco gave last week at the 36th ABA National Institute on White Collar Crime (Monaco Speech ). His remarks were noted by many commentators, including on two Compliance Into the Weeds podcasts where Matt Kelly and I took a deep dive into our podcast twice. His remarks reframed a discussion of the priorities of this Department of Justice (DOJ) on white collar criminal law enforcement, including in the context of corrupt practices abroad (FCPA). His remarks should be considered by all compliance professionals as they portend a very big change in the way the DOJ and potentially other agencies enforce the FCPA. This has important implications for all compliance officers (CCOs), compliance professionals, and corporate compliance programs.

Today, I will close with what all of this could mean for the compliance professional. Let us first note the emphasis placed on culture. Monaco’s words were: “Now I recognize the resources and effort it takes to run a large organization and build the right culture. The Department of Justice has over 115,000 employees in dozens of countries and an operating budget equivalent to that of a Fortune 100 company. So I know what it means to manage and be responsible for what happens in an organization. complex. But corporate culture matters. A corporate culture that does not hold individuals accountable, or invest in compliance – or worse, that laughs at compliance – leads to poor results. This means that the DOJ will assess the entire corporate culture. As a compliance practitioner, how do you demonstrate culture? Or to phrase the question using Tom Fox’s mantra, how did you document, document, and document your culture? Culture obviously starts at the top, but it must permeate and take root in an organization.

Compliance is just as important. Here, Monaco said: “Let me also be clear: a company can fulfill its fiduciary duty to its shareholders and maintain a commitment to compliance and legality. In fact, companies serve their shareholders when they proactively set up compliance functions and spend resources to anticipate problems. They do this both by avoiding regulatory measures in the first place and by receiving money from the government. Conversely, we will ensure that the absence of such programs inevitably turns out to be a costly omission for companies that end up subject to ministerial inquiries. Note the importance of “the company can fulfill its fiduciary duty to shareholders.”

It’s a clear hat trick for Maintenance mark and other legal requirements for a civil statute based compliance program. It is not the Department of Justice that says we are going to punish a company for simply not having a compliance program. However, don’t be fooled by the fact that if a company does not have a compliance program, not only will there be a very high chance of regulatory violation, such as under the FCPA; if your organization does not have a compliance program, it will not receive credit when the penalty phase arrives. Monaco also makes it clear that it can do so the potential legal costs not only of shareholders’ civil lawsuits, but also regulatory fines and penalties.

Another area new to the compliance function will be the DOJ’s review of any corporate misdeeds when assessing a company’s culture, commitment to compliance, and possible fines and penalties. Here, Monaco said: “Today the department makes it clear that any past misconduct should be assessed when making decisions about the appropriate resolution with a business, whether or not that misconduct is similar to conduct. involved in a specific investigation. This misconduct record is a direct testament to a company’s overall commitment to compliance programs and the proper culture to deter criminal activity.

Typically, compliance dealt with anti-corruption compliance, business compliance, anti-trust compliance, and maybe others. However, now a CCO must be informed of any malpractice, as it will be reviewed by the DOJ. For any multinational organization, this alone will be intimidating as the number of compliance professionals with visibility on taxes, Equal Employment Opportunity Commission (EEOC) claims, labor relations issues or the myriad of other legal issues that every business faces every day, literally across the globe? Still, Monaco said prosecutors would look into exactly that, saying “An FCPA unit prosecutor needs to take a department-wide view of wrongdoing: Did this company violate the Taxation Division, the Debt Division? environment and natural resources, money laundering sections, US attorney’s offices, and so on? He or she should also assess what happened outside of the department – whether that company has been sued by another country or state, or if that company has a history of run-ins with regulators. Some prior misconduct may ultimately turn out to be of less significance, but prosecutors should start by assuming that any prior misconduct is potentially relevant. This is literally a radical change.

Finally, what could be the changes in the way companies are evaluated under the FCPA Enforcement Policy, passed by former CEO Rod Rosenstein? Will there always be a deemed refusal if you (1) disclose yourself; (2) deep cleansing; (3) cooperate fully; and (4) restore ill-gotten gains? If there is no presumption, will there be robust self-disclosure? There is nothing illegal about not self-disclosing, but if a whistleblower steps forward or the DOJ then opens an investigation based on other sources and determines that a violation has occurred, l The opportunity for a declination could well be lost. Additionally, if there is no self-disclosure and the issue reappears or the remediation is unsuccessful, the company now appears to have actual knowledge of a breach, potentially increasing again. the penalty.

As I wrote yesterday, there are a lot of open questions about these changes. One thing is clear to me, the role of CCO and the work of the compliance function have become much more difficult.

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