By Chris Prentice
(Reuters) -A U.S. Justice Department official on Tuesday said the agency is rolling out new policies aimed at boosting incentives for companies to disclose any misconduct they uncover to authorities.
The revisions, which apply to all corporate criminal matters handled by the Justice Department’s Criminal Division, give prosecutors additional leeway to decline to prosecute companies if they self-report and cooperate with government investigations, Assistant Attorney General Kenneth Polite said at an event at Georgetown University.
Previously, prosecutors could not offer any breaks on suing companies for misconduct when there were aggravating circumstances, such as the involvement of key executives and a significant profit from the wrongdoing.
Under the new policy outlined on Tuesday, the Justice Department can extend these so-called declinations even under such aggravating circumstances if companies meet certain guidelines. Those include the immediate disclosure of issues when they are uncovered, “extraordinary cooperation” with the government’s investigation and “extraordinary remediation,” Polite said.
Even if a criminal resolution is still warranted, companies can earn discounts of 50% to 75% off the low end of prosecutors’ sentencing guidelines for penalties. But Polite cautioned that steep discounts would not be the norm.
“Each and every company starts at zero cooperation credit,” Polite said. “This is not a race to the bottom.”
(Reporting by Chris Prentice; Editing by Chris Reese and Jonathan Oatis)