In a post occasioned by the twentieth anniversary of the Federal Sentencing Guidelines for Organizations, I described two very different approaches to promoting compliance programs that exist within the U.S. Department of Justice.
The first – that of the Fraud Section – is characterized by embracing the considerable promise of such programs to prevent and detect wrongdoing. It involves not only use of the “stick” of punishing companies for not having good anti-corruption programs, but also the “carrot” – by providing companies with credit for “pre-existing” programs and specifying, in settlement documents, what anti-corruption efforts should entail.
By contrast, the latter approach – that of the Antitrust Division – has been characterized by near total neglect. Not surprisingly, antitrust compliance efforts ― at least relative to those for other risk areas ― seem to have receded in importance since the Guidelines went into effect.
Recently, the oddity of the Justice Department’s split personality on compliance programs was highlighted in a way that, to my knowledge, has never happened before. Last fall, Bridgestone Corporation was prosecuted for both FCPA and antitrust violations. As part of the settlement, the company was required to maintain various specified anti-corruption measures similar to those mandated in various recent FCPA cases. But on the subject antitrust compliance there was nothing of this sort.
(Bridgestone’s plea agreement (pdf) can be downloaded here. Attachment B is the corporate compliance program.)
In other words, the Department of Justice seemed to believe that it was important for the company to have, among other things, risk assessments, clearly articulated policies, procedures, training, certifications, reporting protocols, self-assessments and many other measures to prevent the recurrence of corruption – but none of these steps to prevent the recurrence of antitrust violations. Is this really the message the Department wants to send? E.g., if it makes sense to require a company to assign one or more senior executives the responsibility for ensuring anti-corruption compliance – executives with the requisite level of authority, autonomy and resources to do that job – why wouldn’t the government do the same for antitrust?
The Bridgestone plea agreement is indeed a strikingly peculiar read from a law enforcement policy perspective. One almost has the sense from it that the Antitrust Division, when it comes compliance, has become the Miss Havisham of the U.S. enforcement community – stuck in the past and missing out on today.
On the other hand, by highlighting the Department’s long standing lack of consistency on compliance in such a singular way, perhaps the case will contribute to 2012 being the year that the Antitrust Division finally gets serious about encouraging companies to promote law abidance through compliance programs.
Jeffrey M. Kaplan, a partner in the Princeton, New Jersey office of Kaplan & Walker LLP, has practiced in the compliance law field since the early 1990’s. He serves as Adjunct Professor of Business Ethics at NYU’s Stern School of Business. His Conflict of Interest Blog is the authoritative source for COI discussion online. He can be contacted here.