By Matthew Richardson
DOJ Headquarters, Washington D.C.
The average person has an instinctive understanding of the fact that when an act of corruption occurs, some individual somewhere, an actual human being, must be responsible. If a company pays bribes to get contracts, or submits false documents and an official looks the other way, or does shoddy work and is never held to account, we recognize that there must have been somebody, somewhere, who was aware or should have been aware of the misconduct and did the wrong thing. This is part of why so many continue to be upset that the financial institutions that helped bring about the 2009 financial crisis are widely recognized to have behaved improperly, but individuals were never really held to account.
It’s in this context that so many people concerned about corruption in US international commercial transactions have expressed such interest in the Yates Memo, so called because of Deputy Attorney General Sally Yates’ authorship. The Yates Memo is an example of messaging by the Department of Justice, broadcasting for all intents and purposes, that they get it – it’s not good enough to fine large institutions and publicize evidence of institutional misconduct. No, the Yates Memo is an effort by the DOJ to put large multinational corporations and the FCPA defense bar on notice that the DOJ wants to start coming after you, and they want to put an individual’s name next to a fined corporation and say “we got the one who did it!”
Of course, fining a large company a large sum of money can seem more like a tax than anything else, particularly if it’s a regular occurrence for an institution or within an industry. If you recognized that at some point you are likely to be fined for corruption or fraud, then you’d facture that into the cost of doing business too, wouldn’t you?
There are certainly those that note darkly that DOJ and SEC prosecutions have gone down in the 2015 fiscal year, but the number of attorneys hired has increased. It’s possible that work product expectations have decreased with the Feds. It’s possible that investigations have increased, but through judicious use of prosecutorial discretion these dead-end searches were binned when no misconduct was found. It’s also possible, of course, that there are lot of particularly big and bad cases in the pipeline, and the Feds are getting all the ducks in a row, particularly if big names are going behind bars.
Essentially, it does not feel like a good moment to have been the someone who had to sign the document, somewhere, that the prosecutor will holdup and say “here – this is where it should never have been allowed to happen,” and they will have that individual’s name next to corporation.