Revised DOJ Corporate Cooperation Policy Paints a Target on Individuals

Alerts / December 7, 2018

Last week, at the American Conference Institute’s 35th International Conference on the Foreign Corrupt Practices Act, Deputy Attorney General Rod Rosenstein introduced revisions to the Department of Justice’s (DOJ) enforcement policy regarding individual accountability in corporate investigations.[1] In changing the policy that then-Deputy Attorney General Sally Yates promulgated in September 2015, commonly known as the Yates Memo,[2] Rosenstein announced that to receive cooperation credit, companies are no longer required to identify every individual involved in wrongdoing. Instead, companies need only identify individuals who were “substantially involved in or responsible for the criminal conduct.”

Change in the Policy for Criminal and Civil Cases

The Yates Memo created a policy of greater individual accountability in corporate investigations. Under that policy, cooperation credit was conditioned on companies providing the DOJ with relevant facts about every individual involved in the wrongdoing. Rosenstein affirmed that the new policy would continue this pursuit of individual scrutiny, but he acknowledged the growing perception that compliance with the Yates Memo is burdensome and inefficient, stating that “investigations should not be delayed merely to collect information about individuals whose involvement was not substantial. . . . [I]t is not practical to require [a] company to identify every employee who played any role in the conduct.”[3]

Consequently, the change in policy is an attempt to increase efficiencies in criminal corporate investigations by allowing the DOJ and companies to focus on individuals of interest to the DOJ, i.e., “individuals who play significant roles in setting a company on a course of criminal conduct”[4] and warrant prosecution. In fact, Rosenstein articulated that the “most effective deterrent to corporate criminal misconduct is ... punishing the people who committed the crimes.”[5] To effectuate that deterrent, Rosenstein shifted the DOJ’s policy to target “every individual ... substantially involved in or responsible for” the wrongdoing, including senior executives.[6]

This new policy also applies to civil matters, but it accounts for the unique goals of civil enforcement, which Rosenstein explained “is to recover money,” not to find individual civil liability. Rosenstein maligned the “all or nothing” approach set forth in the Yates Memo, claiming that requiring companies to identify the potential civil liability of every employee is “counterproductive in civil cases,” where the line attorneys need “flexibility to accept settlements that remedy the harm.”[7]

To that end, the new policy permits DOJ civil attorneys to offer companies credit on a sliding scale relative to the level of cooperation they provide. DOJ civil attorneys resolving civil matters may award

  • maximum credit to companies that identify every person substantially involved in or responsible for the misconduct;
  • some credit to companies that meaningfully assist the government’s investigation, even if their cooperation does not qualify for maximum credit; or
  • no credit, unless at a minimum, companies identify all wrongdoing by senior officials, including senior managers and board members.

This range affords companies an opportunity to receive partial credit if they cannot provide the details required to earn maximum credit, and it restores discretion to the civil DOJ attorneys, thus incentivizing companies to cooperate with the government.

Key Takeaways

It seems the new policy will constitute a pragmatic approach to enforcement by streamlining both government and internal corporate investigations. However, although Rosenstein touts the new policy as a tool for efficiency and predictability, what qualifies an individual as being “substantially involved in or responsible for” wrongdoing is unclear. Questions will arise as to how the DOJ plans to guide company counsel through the process of identifying such individuals. DOJ attorneys from various districts may provide differing views, causing an inconsistent application of the policy, which will undoubtedly result in costly negotiations between the government and companies regarding the scope of individuals covered by the policy.

Without standardization of or departmentwide guidance regarding these terms, the promise of efficiency will give way to the perception of unfairness. Until the DOJ provides more clarity, it is critical that companies engage outside counsel to advocate for a favorable scope of individuals to identify, thereby avoiding the risk of not receiving cooperation credit.

Authorship Credit: John J. Carney and Susrut A. Carpenter.

[1] Rod J. Rosenstein, Deputy Attorney General for the U.S. Dep’t of Justice, Prepared Remarks for the 35th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2018), available at
[2] Sally Q. Yates, Deputy Attorney General for the U.S. Dep’t of Justice, Memorandum on Individual Accountability for Corporate Wrongdoing (Sept. 9, 2015), available at
[3] Rod J. Rosenstein Prepared Remarks (Nov. 29, 2018), supra note 1.
[4] Id.
[5] Id.
[6] Id. (emphasizing that the new policy prohibits DOJ attorneys from awarding credit to any company that either (1) conceals misconduct by senior management or a board of directors or (2) demonstrates lack of good faith in its representations.)
[7] Id.

Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.