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(How) Should You Change Your Company’s Compliance Program(s) in Response to the DOJ’s Recent Guidance?
Arnold & Porter has posted a recent webinar discussing the Department of Justice’s April 30 guidance on how it evaluates the effectiveness of corporate compliance programs when it makes charging decisions, sentencing recommendations, and decides whether to impose reporting requirements or appoint an outside compliance monitor. The team also discusses the guidance itself, its impact, and the practical takeaways for companies of any size, whether they have existing, sophisticated compliance programs or less developed ones.
The Department of Justice Civil Division officially announced the release of expected formal guidance on voluntary misconduct disclosures and cooperation credit during False Claims Act investigations. The formal policy is now included in the Justice Manual Section 4-4.112.
Under the policy, cooperation credit in False Claims Act cases may be earned by voluntarily disclosing misconduct unknown to the government, cooperating in an ongoing investigation, or undertaking remedial measures in response to a violation. Even if the government already has initiated an investigation, a company may receive credit for making a voluntary self-disclosure of other misconduct outside the scope of the government’s existing investigation that is unknown to the government. Similarly, a company may earn credit by preserving relevant documents and information beyond existing business practices or legal requirements, identifying individuals who are aware of relevant information or conduct, and facilitating review and evaluation of data or information that requires access to special or proprietary technologies.
Under the policy, DOJ will consider corrective action that a company has taken in response to an FCA violation, such as conducting a root cause analysis, disciplining or removing responsible personnel, and implementing or improving compliance programs to prevent a recurrence. Most frequently, cooperation credit will take the form of a reduction in the damages multiplier and civil penalties. If appropriate, DOJ also may notify a relevant agency about the company’s voluntary disclosure, cooperation, or remediation so that the agency can take those actions into account in deciding how to apply administrative remedies. For the full policy, click here.
Appointment Cancelled? Supreme Court Asked to Consider Constitutionality of FCA’s Qui Tam Provisions Under the Appointments Clause
Could what started with a footnote end with the False Claims Act’s qui tam provisions being declared unconstitutional? Probably not, but the Supreme Court was interested enough to order responses to a recent certiorari petition challenging the FCA’s constitutionality. In Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000), the Supreme Court held that an FCA relator has standing to sue on the United States’ behalf, but, in a footnote, the Court remarked that it was “express[ing] no view on the question whether qui tam suits violate” the Article II Appointments Clause. As we have previously written, Attorney General William Barr has previously stated on multiple occasions that the FCA’s qui tam provisions violate the Appointments Clause. While Attorney General Barr walked back those comments, a certiorari petition filed in January 2019 in Intermountain Health Care, Inc. v. United States ex rel. Polukoff asked the Supreme Court to consider the question. The relator and the Solicitor General declined to file responses and few expected the petition to gain much traction, so it was somewhat surprising when the Supreme Court ordered responses to the petition. Those responses were filed last week.
The DOJ’s stated goal is that corporate monitors will only be required in FCPA settlements if it appears to be truly beneficial to improve the company’s compliance environment, and will not impose an unnecessary burden.
However, Yuliya Kuchma of Baker McKenzie notes that this has still occurred in roughly one-third of recent settlements, and offers recommendations for how to deal with them. The first is to “thatch your roof before the rain begins,” that is, get to work putting things in order before the investigation ends and a monitor is required.
Additional tips include selecting (or at least proposing) a monitor carefully, working out privilege and data privacy issues as early as possible, and creating an environment of trust and mutual respect between the company and the monitor.
The TRACE e-Gov Portal is a directory to online services offered by government agencies in more than 90 countries. It is intended to fight corruption by making it easier to conduct routine business without opportunities for officials to solicit or demand bribes face-to-face.
The resource was developed under the direction of TRACE president Alexandra Wrage, taking a full-time staffer and supporting staff nine months to develop the initial version of it, usually with little help from the governments in question. The 15,000 links are divided into categories – procurement, customs, travel, and such – and the design allows for the addition of new links as more countries come on board with digital services, or more are discovered.
TRACE has opened the site to the public, so any company, law firm, or individual can use it.