“A corporate culture that fails to hold individuals accountable, or fails to invest in compliance—or worse, that thumbs its nose at compliance—leads to bad results.”—Deputy Attorney General Lisa Monaco
Husch Blackwell Leaders: Catherine L. Hanaway, Chair; Jeff Jensen, Partner; Gregg N. Sofer, Partner; Scott Glabe, Partner; Tim Garrison, Partner; Steve E. Holtshouser, Partner; Matthew P. Diehr, Partner; Robert L. Peabody, Of Counsel; Michael Martinich-Sauter, Senior Counsel; Salvador Hernandez, Senior Compliance and Ethics Advisor; and Rick Shimon, Special Investigator.
In remarks given yesterday to the American Bar Association’s 2021 White Collar Crime National Institute, Deputy Attorney General Lisa Monaco made clear that the Department of Justice (DOJ) is changing its approach to the enforcement of corporate crime. Recalling the DOJ’s takedowns of executives at WorldCom, Qwest Communications, Adelphia, Tyco, and Enron at the beginning of her career, Monaco commented, “I’ve experienced how—when given the right resources and support including dedicated agents—prosecutors can uncover and prosecute the most sophisticated corporate criminals.”
This served as Monaco’s introduction to three new initiatives—with the promise of additional changes in the works—that will significantly impact the way U.S. businesses view regulatory compliance and handle government criminal enforcement actions. Behind these initiatives is a loud and strong message to federal prosecutors that they can count on a surge of Department funding to prosecute white collar cases and that they should not fear losing cases or consuming Department resources in prosecuting cases, particularly against wealthy defendants whose considerable resources might have deterred prosecutorial efforts in the past.
Significantly, Monaco also highlighted a philosophical shift within the federal government. Since 9/11, the Federal Bureau of Investigation (FBI) had increasingly redirected resources from white collar to anti-terrorism. By embedding an FBI squad in the Fraud Section of the DOJ Criminal Division, white collar prosecutions have been reprioritized. Monaco’s comments make clear that national security remains a priority by stating that many white-collar crimes – such as data incursions – are national security threats.
Overall, Monaco’s comments reinforce individual prosecutions as a Department priority, but there will be a renewed focus on corporate liability. Monaco emphasized the importance of preventative compliance programs and strong compliance culture, “a corporate culture that fails to hold individuals accountable, or fails to invest in compliance—or worse, that thumbs its nose at compliance—leads to bad results.” While she did not refer explicitly to an Environmental, Social and Governance (ESG) framework, Monaco effectively summed up the governance component of ESG, commenting that “companies serve their shareholders when they proactively put in place compliance functions and spend resources anticipating problems.”
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