Loyola University Chicago School of Law, JD 2024
On September 15, 2022, Deputy Attorney General Lisa Monaco issued a memorandum to the Department of Justice (DOJ) titled “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group”. This memorandum is otherwise known as the “Second Monaco Memo”, named after the Deputy Attorney General. This is the second memorandum Monaco has issued in the past year, as the first memorandum was issued in October of 2021. The first memorandum announced the establishment of a Corporate Crime Advisory group, its purpose was to guide and review the DOJ’s approach to corporate criminal enforcement. These memorandums are important to both the defense bar and corporate counsel, as they establish rules and guidelines for corporate criminal enforcement.
What are the key takeaways from the Second Monaco Memo?
Many of the topics addressed in the Second Monaco Memo reiterate, reinforce, or supplement already existing DOJ policies and practices. However, there are a few new policies and initiatives that are significant. The new policies and initiatives show a shift toward a more aggressive approach to corporate crime, specifically within corporate internal investigations and disclosures to the DOJ.
The first emphasizes timely document production by cooperating companies, in order to enable prosecutors to timely initiate proceedings. There is likely to be disagreement surrounding what qualifies as “timely” in this context. The memorandum further notes that where prosecutors identity undue or intentional delay, cooperation credit will be reduced or eliminated.
The second significant addition are initiatives committed to the use of independent compliance monitors, in conjunction with initiatives created to increase transparency in the appointment, terms of reference, and oversight of these monitors. The memorandum also emphasizes the importance of prosecutors remaining apprised of the ongoing work conducted by the monitor, to further increase transparency and ensure cooperation.
Lastly, the memorandum directs companies to implement compensation models for executives which reward positive compliance and governance. These directives also require companies to claw back compensation from executives found to have been involved in corporate criminal offenses. While these directives seem positive, they may be challenging to implement and execute. These directives work to ensure well-designed and adequately resourced efforts, and go hand in hand with sufficiently tested measures to maintain corporate compliance.
Are these changes going to be effective in curbing corporate crime?
It is evident that the Monaco Memorandums are sending a clear message to corporations that corporate crime will not be tolerated. However, will the initiatives and directives be successful in fulfilling their goals? It is unclear as of now whether they will be successful, but it is a step towards establishing the systems and culture necessary to make corporate compliance the norm. It is significant that corporations will have to do more than cooperate in terms of disclosure, will have their history of misconduct examined, and compliance programs and culture investigated. The fact that mere cooperation is no longer the standard emphasizes the new approach to corporate crime, one that is more aggressive and centers curtailing corporate crime .
As opposed to viewing the Monaco Memorandums as something to fear, corporations should utilize the guidance as a model for how to operate their companies. If corporations prioritize compliance and cooperation with policies, there will be no need for increased enforcement and enhanced directives to curb corporate crime. Companies should take these memorandums as an opportunity to establish and enhance a culture of compliance. They should be welcomed by companies as a challenge to confront current gaps in compliance as well as ensure that effective steps are taken when issues arise. If companies are successful in doing so, it will result in lower levels of corporate crime. It is evident that the DOJ will continue issuing guidance in this area of compliance and the memorandums will continue to be revised and shifted in response to the corporate climate. Ultimately, these memorandums are a job well done and exhibit the DOJ’s commitment to enhancing corporate compliance and creating a positive culture within American corporations.
For more information, see the DOJ website and the newly revised Monaco Memorandum.