DOJ's Approach to Extraordinary Cooperation Doesn't 'Pass Muster,' Lawyer Says
Heightened expectations for cooperation under DOJ’s new corporate enforcement policies present a range of challenges for companies considering whether to submit voluntary disclosures, particularly because the agency’s interpretation of “extraordinary cooperation” is so ambiguous, lawyers said. They also said DOJ’s threshold for “full cooperation” -- a step below extraordinary cooperation -- can sometimes be too difficult to meet.
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The agency in January unveiled the new policies, which allow companies with “aggravating” factors to qualify for a declination if they provide DOJ with “extraordinary” cooperation (see 2301190031). But DOJ didn’t provide an explicit definition for the concept, saying it will “know ‘extraordinary cooperation’ when we see it,” a statement that has been criticized by lawyers for being too vague (see 2303080063 and 2302060034).
Although the agency “deserves credit” because they're trying to “do something here that's in the interests of good corporate citizenship,” trying to qualify for extraordinary cooperation can be tricky, said Jason Bologna, a lawyer with Buchanan Ingersoll and a former federal prosecutor. Speaking during a webinar hosted by the law firm last week, Bologna said DOJ’s lack of clear guardrails for what constitutes an extraordinary level of cooperation could lead to an inconsistent application of the policy.
“You may have one prosecutor in the same hall, in the same unit of [DOJ], saying, ‘That's sufficient, I think that they should get credit.’ And the person they sit next to, who is just as good, just as experienced, just as conscientious, on the same facts, they may reach a different conclusion,” Bologna said. There is often “divergence of opinion” within DOJ “about particular facts and circumstances, which is healthy,” he said, “but it's also the reality of the situation.”
“This statement that the DOJ knows it when they see it -- that doesn't pass muster for me.”
Meeting the bar for extraordinary cooperation can be particularly challenging for lawyers who may not be very familiar with their client, Bologna said. “If you don't know who you're dealing with and what their attitude about the particular facts of this case are, and whether those facts when applied to this policy are sufficient to clear the bar of extraordinary cooperation,” he said, “that's a really scary place to be.”
DOJ tried in March to offer insight into what constitutes extraordinary cooperation, saying it will take into account companies that make foreign employees available for interviews, produce “relevant documents” located outside the U.S. and help prosecutors assess “voluminous evidence” (see 2303240010). But disclosing a potential violation to DOJ in hopes of meeting that criteria still requires a leap of faith, said Mark Kasten, a white collar lawyer with Buchanan.
“We can all sit down and read the assistant attorney general's speeches and descriptions where he really tries to feel this out. But it boils down to: It's up to them,” Kasten said during the webinar. “It's at their discretion whether you've really provided extraordinary cooperation.”
Companies need to “provide as much information and be as cooperative as possible,” he added. “You really have to try to go above and beyond.”
Even meeting DOJ’s criteria for “full cooperation,” a lower bar than extraordinary cooperation, can be difficult to achieve, Bologna said. Companies need to make sure they’re quickly disclosing all non-privileged facts relevant to the wrongdoing, proactively cooperating with DOJ prosecutors, preserving relevant documents and more, he said, essentially requiring corporations and their lawyers to do a federal prosecutor’s work for them.
“To me, what this feels like is that the Department of Justice, to some extent, has outsourced their investigations to private industry,” Bologna said. DOJ feels that a company’s internal or external counsel has a “better sense of where to go in the company and find the kinds of facts, details, witnesses that get at the core issues,” he said, and they’ll do it much faster. “In that sense, the government is essentially privatizing law enforcement.”
That can pose conflicts for law firms, Bologna said, which are hired “to be an advocate, now and forever, for their client,” not “an agent for the government.” DOJ’s expectations for cooperation “sounds to me like you've basically been entrusted as an agent of the government to simply give documents,” he said. “And I see a tension there between the policy and the practice that goes into implementing that policy. I really see an issue there.”
Qualifying for full cooperation can be especially difficult in cases that involve evidence in foreign countries, Bologna said, such as in a Foreign Corrupt Practices Act investigation. Depending on where the company is located, evidence might exist in “various different geographic places,” “amongst various different people within various different layers of the company” and in “paper-based or electronic-based” formats.
Bologna said gathering all of that information quickly can be challenging, especially because the company’s board of directors may want to take time to consider the risks and rewards of reporting to DOJ. “Thinking that you can immediately cover all those bases in a matter of a short period of time and have a coherent, risk-reward discussion with the company about disclosing this information to the DOJ,” he said, “I think is a very tall ask.”