Recent developments show that, while the Department of Justice (DOJ) is willing to offer incentives for cooperation with criminal antitrust investigations, it also is increasing the resources to root out and uncover misconduct and criminality. This gives companies both carrot and stick incentives to participate in a win-win exchange, allowing the company to avoid hefty fines, while giving the DOJ an additional first line of defense in preventing crimes.
As we have previously reported, the DOJ Antitrust Division recently announced a new policy that the agency would start considering corporate compliance at the charging stage in criminal antitrust investigations. The policy’s goal is to promote stronger compliance programs, lower corporate misconduct, and prevent and catch misconduct faster. However, the policy was criticized for hampering a separate policy of providing immunity to the first company to alert the department of an antitrust violation.
That long-standing immunity program provides complete absolution from criminal prosecution for the first company that self-reports an antitrust conspiracy and provides cooperation with the government. Only one company per conspiracy may qualify for complete immunity though. By contrast, the new compliance program recognizes any company’s efforts to curb criminal activity through internal compliance programs. This new initiative uses a set of factors to determine the effectiveness of the program and the appropriate form of any resolution or prosecution (including deferred prosecution agreements, which do not provide complete immunity).
In recently prepared remarks, Deputy Assistant Attorney General Richard Powers underscored the department’s commitment to the program that provides leniency toward companies with strong corporate compliance programs while also stressing the need to avoid a static approach to cartel enforcement.
The key criticism Powers addressed was that companies uncovering cartel conduct may no longer feel the need to seek immediate leniency but may instead sit tight and later advocate for a deferred prosecution agreement if immunity is no longer available. Powers noted that the adequacy and effectiveness of a company’s compliance program is just one of 10 factors the department considers, and that prompt self-reporting, cooperation and remedial action are also significant parts of the calculus, thus making a choice to wait-and-see a potentially costly mistake.
Powers stated that any fine reduction would not only merely reflect the timing of cooperation, but also the nature, extent and value of that cooperation to the investigation. Powers further stressed the importance of predictability and transparency, noting the Antitrust Division’s consistent approach across offices to follow the publicly available rules in the leniency policy. The increased wait-time for a company to receive a conditional letter granting a fine reduction, non-prosecution protection or other form of leniency ensures that the department can be satisfied that it is receiving and continuing to receive full, continuing and complete cooperation through the investigation.
Powers' speech occurred in the context of an increase both in hiring Division personnel and criminal prosecutions by the Antitrust Division. He referenced the steady expansion of the Division’s arsenal including, more recently, undercover agents and wiretaps to investigate cartels. Powers also noted the creation of the Justice Department’s Procurement Collusion Strike Force, an interagency partnership of multiple federal agencies and U.S. Attorney’s offices, including Denver, Washington, New York, Philadelphia, Chicago and Los Angeles. Powers noted in another recent speech that the strike force’s district-based approach creates outreach plans tailored to reach key federal, state and local agencies spending federal dollars in the district, as well as the key contractors and trade associations in the district, thus targeting where federal dollars are going.
In the Division’s recently submitted FY 2021 Budget, it sought $188.5 million, an increase of over $20 million from its current funding. Of that amount, $8.2 million is to hire 55 additional attorneys and dozens of other staff. The Division commented in an overview that the increase was requested to address greater investment in its criminal cartel enforcement program, among other items.