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Friday
Mar102017

DOJ will keep Pilot Program after April expiry during evaluation

A DOJ official said Friday the Pilot Program won't expire on April 5 but will continue while the agency evaluates how the program has worked and whether it should be extended or changed.

Kenneth Blanco, Acting Assistant Attorney General for the Criminal Division, talked about the Pilot Program during a speech in Miami to the American Bar Association's National Institute on White Collar Crime.

The Criminal Division launched the one-year Pilot Program last April. It was set to expire on April 5. 

The Pilot Program gives companies incentives to self-disclose, cooperate, and remediate FCPA violations. 

Companies that qualify can receive a 50 percent discount on fines they might face under the U.S. Sentencing Guidelines.

So far, the DOJ has issued five declination letters under the Pilot Program.

Two of the declinations involved privately-held companies that the DOj required to disgorge profits, creating a new category of FCPA enforcement actions.

In October last year, Lanny Breuer, the vice chair of Covington & Burling and former U.S. Assistant Attorney General, said the Pilot Program doesn't fix some problems with FCPA investigations and enforcement actions.

Breuer was speaking at the FCPA Blog 2016 Conference in New York City.

He said the underlying problem of prosecutorial discretion in how to run FCPA investigations and who to charge is still there.

“There are very desirable benefits to the program, but they’re still discretionary,” Breuer said.

The DOJ isn't required to follow the Pilot Program when pursuing cases. That means companies don’t know whether they'll qualify, according to Breuer.

He also talked about “de-confliction” -- when the government asks a company to halt its own FCPA investigation so the feds can be the first to interview witnesses.

Breuer said it's possible for the DOJ to require “de-confliction” for a company to gain the benefits of the Pilot Program. That could result in companies being unable to disclose information about alleged wrongdoing to other agencies or to shareholders.

Asking publicly traded companies to stand down from an internal FCPA investigation is "an extraordinary request, in my view,” he said.

*     *     *

Here are the full remarks about the Pilot Program by Kenneth Blanco, Acting Assistant Attorney General for the DOJ's Criminal Division, on March 10, 2017 in Miami:

. . . I would be remiss if I did not comment on the Fraud Section’s “Pilot Program.” Last year, the Fraud Section implemented a one-year “Pilot Program” for FCPA cases, to provide more transparency and consistency for our corporate resolutions. The “Pilot Program” provides our prosecutors, companies and the public clear metrics for what constitutes voluntary self-disclosure, full cooperation and full remediation. It also outlines the benefits that are accorded a voluntary self-disclosure of wrongdoing, full cooperation and remediation. The one-year pilot period ends on April 5. At that time, we will begin the process of evaluating the utility and efficacy of the “Pilot Program,” whether to extend it, and what revisions, if any, we should make to it.  The program will continue in full force until we reach a final decision on those issues.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Reader Comments (1)

Thanks FCPA Blog. Great update! I think we should all be pleased at this news. The DOJ should definitely extend the Pilot Program now that they have Hui Chen on board to ensure they can recognize effective programs, rather than be distracted by mere "window dressing"- the new DOJ Evaluation guidance is proof that this will happen! Good for DOJ, good for the Compliance profession, good for companies. Good for everyone!
March 10, 2017 | Unregistered CommenterDonna Boehme
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