Jonathan Rosen
Journal of International Peace Operations
Volume 6, Number 1 – July/August, 2010
The Department of Justice could take a keen interest in your operations.
IN this hyper-intensive environment of corporate scrutiny, the Department of Justice (DOJ) acts as the pre-eminent federal regulator of corporate culture. DOJ’s Principles of Federal Prosecution of Business Organizations, also known as the Filip Memorandum, affirmatively establish the government’s interest in using criminal prosecutions to achieve institutional reform in a corporate setting. Anticipating and defending against these structural enforcement actions requires an effective compliance program.
The Filip Memorandum underscores the importance of an effective corporate compliance program, which is commensurate with that company’s resources and business risks. In this post-Enron era of heightened regulatory enforcement designed to target corporate fraud, an effective compliance program deters criminal conduct by its employees and agents, and, thereby, helps avoid an investigation in the first place. Moreover, in light of the increasing criminalization of business conduct, it can persuade law enforcement that the company did not intend to benefit from the errant behavior of its employees and agents, thereby reducing the likelihood of a corporate prosecution under the Filip Memorandum.
Today, the government enjoys extraordinary leverage over companies facing the risk of an enforcement action. The imbalance of power between the government and the company is explained by the following two factors: the Draconian consequences of an indictment; and the elastic notions of corporate criminal liability.
