One of the key messages of the Organizational Sentencing Guidelines, beginning in 1991, was that government should recognize and encourage company compliance and ethics programs. The Guidelines do this through the carrot and stick approach. The SEC does this, including through its recent efforts to address concerns about whistleblowers undermining corporate compliance efforts. The US Supreme Court, in cases involving discrimination, has recognized the importance of compliance efforts, providing that they may be a defense to certain harassment claims, and a defense to punitive damages in discrimination cases. The Department of Justice Criminal Division does this in taking programs into account in decisions to prosecute. The US Attorney’s Manual instructs federal prosecutors to take programs into account (with one exception). So can we tell our clients that programs matter to the government?
Unfortunately, one pocket of the Department of Justice has carved out an exception for itself. It offers no credit for any compliance program, ever. No company has ever received a sentence reduction for programs in this one area; in fact, the Sentencing Guidelines have an odd carve-out just for this one area. Even when a company admits it has committed the most serious types of criminal violations in this area, it is neither expected to have a program nor to institute one. This enforcement body rewards any company that beats its fellow criminals to the government’s door in disclosing a violation, but will not give any company any credit for a program under any circumstances. This one group of enforcers has even carved out the only exception in the US Attorneys Manual; it, alone in the Department of Justice, may ignore compliance programs with impunity. This one group is the Antitrust Division of the US Department of Justice.
Of course, we can all tell our clients there are many good reasons for companies to have compliance programs, and this is certainly true. But why should there be two opposite policies in the same government? Why is it good for the Department of Justice’s Criminal Division to promote and recognize effective programs, and yet have a sister Division do exactly the opposite? Either it is good public policy to promote corporate self-policing, or it is not. Let’s have one message from the government that makes sense in this important area.