Addressing corporate crime is a priority for the U.S. Department of Justice (DOJ), as it not only affects direct victims, but puts jobs, savings, our economic security, financial markets, and even national security at risk.
That is why, at the American Bar Association’s recent annual corporate crime conference, DOJ Assistant Attorney General Lisa Monaco gave a state-of-the-art overview of recent changes in DOJ policy to prosecute corporate corruption, which set a historic precedent for the entire world.
While these are policies that are being applied to U.S. companies, let us not forget that corporate actions by companies in any country with even the slightest link to the U.S. could be prosecuted under the Foreign Corrupt Practices Act (FCPA), and given globalization, the possibilities are increasing.
These policies are aimed at getting companies to do the right thing, investing in solid compliance programs, with effective corporate governance, as well as empowering prosecutors to hold those who do not comply with the law accountable. Thus, they seek to prevent misconduct before it occurs, punish individual liability, and deter and punish recidivism.
With this new approach, the DOJ enhances the value of compliance programs, requiring not only that they exist, but also that anti-corruption policies and procedures are implemented, monitored, and enforced.
First, a special incentive will be given to companies that self-report and cooperate with the investigation, which will be seen as an indicator that they have a functional compliance program, and a healthy corporate culture, and have not just settled for having one to comply with. The speed of voluntary whistleblowing will also be relevant.
On the other hand, companies will be required to link their compliance programs with compensation and performance bonus policies for their employees, which shows the importance of offering incentives for good results, but also of monitoring and measuring them. For example, if an executive achieves the required commercial objectives, but skipped a step in the process, he/she should not receive the incentive bonus, since this depends on his/her performance in complying with the company’s policies and not only on the achievement of good commercial results. Let us remember that one of the premises of compliance is that it is not only important to achieve the goals, but also to how they are achieved.
One of the most groundbreaking items announced by Lisa Monaco is the increase in resources to respond to the growing intersection of corporate crime and national security threats, adding more than 25 new prosecutors to investigate and prosecute these violations. This is because corporations are at the forefront of geopolitical challenges today, and, increasingly, corporate crime investigations have profound national security implications.
An example of the above is the case of the construction company LaFarge S.A., involved in a scheme where its executives paid millions to terrorist groups such as ISIS, in exchange for permits to operate a cement plant in Syria. LaFarge was ordered to pay sanctions of more than US$ 750 million.
This is not far from national companies, especially in the face of the escalation of drug trafficking and its penetration into the corporate world to launder money or commit cybercrime. It is not far either, if we take into account the context of the Russia-Ukraine war, and the search of both countries for partners in all continents to move forward.
At the same time, this policy reinforces the fact that the DOJ’s eyes are on the whole world and, as such, it is an issue that should concern all companies globally.
There is no doubt that these policies are at the forefront of the prosecution of corporate crime because they emphasize the idea that no company is above the law, but at the same time, they give great power to companies by giving them the responsibility to prevent, monitor, investigate and report corruption. With this, they have the great opportunity to be the first to disassociate themselves from any breaches of probity and ethics committed by one or some of their employees, and to demonstrate that they are committed to the fight against corruption, as well as being willing to admit and correct those breaches that allowed the bad practices to occur.
By Susana Sierra
Published in La Tercera