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Yates Speaks: Prosecuting individuals is really hard, so companies need to come clean

Deputy Attorney General Sally Q. Yates spoke Tuesday to the New York City Bar Association White Collar Crime Conference. Her topic? That’s right. The Yates Memo, more formally known as the DOJ’s Individual Accountability Policy.

The Senate confirmed Yates as Deputy Attorney General in May 2015.

She had spent 25 years as a federal prosecutor. In 2010, she became the first woman to serve as U.S. Attorney in the Northern District of Georgia.

The DOJ issued the Yates Memo in September 2015. It can be downloaded here (pdf).

On Tuesday, Yates said holding individuals accountable for corporate wrongdoing “has always been a priority for the Department of Justice, both for the leadership of the department and for the line prosecutors who work the cases.”

“We cannot have a different system of justice — or the perception of a different system of justice — for corporate executives than we do for everyone else,” Yates said.

Individual accountability is essential to deter corporate misdeeds, she said. It has a real impact on corporate culture and ensures that the public has confidence in our justice system.

But prosecuting individuals isn’t easy. Proving the requisite knowledge and intent is one challenge, she said.

Another challenge: Blurred lines of authority in companies make it hard to identify who’s responsible for individual business decisions.

Further barriers to individual prosecutions are the massive numbers of electronic documents for global companies, combined with restrictive foreign data privacy laws and a limited ability to compel the testimony of witnesses abroad.

Those difficulties are why the DOJ issued the Yates Memo.

“The goal was to ensure that we’re doing everything we can to overcome the barriers that I just mentioned and hold accountable those who are responsible for corporate wrongs,” Yates said.

Bottom line: Companies must now provide all the facts about individual conduct in order to qualify for any cooperation credit.

The DOJ, she said, has “shifted the presumption on what a corporate resolution looks like: Now, our attorneys must get approval if they decide not to bring charges against individuals and may not release individuals from civil or criminal liability except under the rarest of circumstances.”

The notion that a cooperating company must relate facts about the conduct of individuals within the corporation is nothing new, Yates said. The U.S. Attorneys’ Manual has long provided that companies that want cooperation credit should identify who did what.

DOJ officials have repeated the message over and over again for the last several years in just about every speech given on corporate fraud, she said.

“But despite all that,” Yates said, “we found that we still got passive voice, ‘Mistakes were made,’ presentations from defense counsel, without identifying who made what mistakes.”

Companies aren’t required to boil the ocean — that is, conduct overly broad investigations or embark on a years-long, multi-million dollar investigation every time they learn of misconduct.

“On the contrary,” Yates said, “we expect companies to carry out a thorough investigation tailored to the scope of the wrongdoing.”

The shift of focus to individuals also means the government will use more civil actions against white-collar perps — whether or not they have the money to satisfy the judgments against them.

Yates also talked about the DOJ’s new Pilot Program for self reporting and corporate cooperation. But she stayed close to her main topic of individual responsibility.

“There is one system of justice — one in which wrongdoers can and must be held accountable based on facts and evidence, not on position or title, power or wealth,” she said.

*      *      *

Deputy Attorney General Sally Q. Yates’ full remarks at the New York City Bar Association White Collar Crime Conference on May 10, 2016 are here.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016.

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1 Comment

  1. It’s a behavioral problem throughout any organization that has multiple locations in multiple countries with different culture, habits, customs, traits and finally intentions and motives for short term gains in the sequence of line management. Top management, including senior line managers will not come clean unless they accept certain heads have to be sacrificed. It’s a matter of education, change and finally a solid open reflection without self-interests

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