DOJ's New Threshold for "Cooperation": Challenges Posed by the Yates Memo and USAM Revisions
In September 2015, U.S. Deputy Attorney General Sally Yates issued a policy memorandum to Department of Justice (the Department, or DOJ) attorneys, directing them to focus enforcement efforts on holding individuals accountable for corporate malfeasance. Recognizing the challenge of doing so, the Department’s new policy seeks to leverage a corporate entity’s knowledge and access to information to bring cases against their own employees by making corporate cooperation credit conditional on the disclosure of all relevant facts as to any individuals involved in the misconduct.
Although it is too soon to measure the full impact of the Department’s new policy, it is nonetheless clear that the new threshold for cooperation credit has upset the expectations of businesses historically inclined to cooperate with the government.
The new policy is likely to have a number of unintended consequences that will muddy what was traditionally a straightforward decision—whether to cooperate with a government investigation. By focusing so much attention on identifying culpable individuals, the new policy risks alienating personnel whose cooperation and knowledge of facts are essential to any corporate internal investigation. It may also complicate compliance. For example, if company employees become reluctant to report transgressions for fear of drawing too much attention to themselves, the company has a greatly reduced ability to assess whether controls or existing compliance programs work, or how to improve them.
The “all-or-nothing” nature of the new cooperation standard also risks creating even more uncertainty for corporate decisions regarding the benefits of voluntary self-disclosure of suspected unlawful conduct. The new policy has also renewed concerns about the pressure to waive attorney-client privilege. Paradoxically, in seeking to make it easier to bring cases against culpable individuals in corporate investigations, the Department has complicated the mix for individuals, the corporate community—and ultimately, for the Department itself.
This paper explores the policy directive to federal prosecutors in the Yates Memo and addresses how that directive is implemented in the United States Attorneys’ Manual (USAM), which guides federal prosecutors and Department attorneys in their day-to-day practice. It also addresses how corporations may find themselves at odds with their employees’ interests in the course of internal investigations, to a larger degree than in the past, and the new realities faced by corporate counsel conducting internal investigations in a post-Yates Memo world.