(the “DOJ”) set up their regime through guidelines incorporated in the United States Attorney’s Manual. (5) Roughly speaking, DPAs and NPAs are pre-trial agreements between the DOJ and a corporate defendant (6) whereby the DOJ agrees respectively to suspend prosecution or not to pursue the defendant as long as it complies with the terms of the agreement during its validity period (generally a few years). The other main difference between DPAs and NPAs relies on whether or not the prosecution files a criminal Information document (the “Information”) summarizing the criminal charges to be pursued in a federal district court. With DPAs, the U.S. attorney files the Information and the DPA, which must be approved by the district judge after a – very limited (7) – control. With NPAs, there is no judicial control. Thus, the threat of actual prosecution is more real in DPAs than in NPAs, which may explain why the DOJ used more DPAs than NPAs. (8) Finally, with DPAs, the DOJ ends the prosecution at the end of the validity period by filing a motion of dismissal, normally approved by the district judge.
“
U.S. federal law does not
define DPAs and NPAs’
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legal frameworks.
To sum it up, these agreements allow U.S. attorneys to resolve a corporate criminal case by means other than indictment and represent “a middle ground between declining prosecution and obtaining the conviction of a corporation”. (9) U.S. federal prosecutors have used DPAs in the past decade more and more widely (I). Yet, this extensive use of DPAs has raised strong criticisms, which may explain their recent decline in federal corporate prosecution strategies in favor of even more coercive strategies (II). These new strategies bear significant risks for defendants and increase the lack of judicial oversight over federal criminal prosecution (III).
5. 6. 7. 8. 9.
United States Attorney’s Manual, U.S. Department of Justice Publication, Principles of Federal Prosecution of Business Organisations, p. 18. To my knowledge and to this day, the DOJ has never entered a DPA or a NPA directly with an individual. See infra, II.A. It is the reason why this paper focuses more on DPAs rather than on NPAs. Ibid., p. 2.
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IV.B. Intégrité du marché
I. DPAs became the cornerstone of corporate criminal prosecution strategies Even tough the primary implementation of corporate prosecution strategies based on DPAs was slightly chaotic (A), these agreements became essential instruments in federal prosecutors’ toolbox (B).
A. A chaotic implementation After the Enron scandal, the accounting firm Arthur Andersen was indicted and convicted of obstruction of justice in 2002. (10) The Second Circuit Court upheld this conviction in 2004. (11) The U.S. Supreme Court reversed it in 2005. (12) But in the meantime, the company went out of business, partly because U.S. federal regulations did not authorize legal entities convicted of felony to be audit public companies. The idea that indictment had become some kind of corporate death penalty gained ground. (13) This is probably the main reason for such a dramatic increase in the use of DPAs and NPAs. The DOJ’s strategy was simple: U.S. attorneys could seek full cooperation of the company by threatening to indict it (14) and promising to enter into a DPA (or more rarely a NPA) if the company’s cooperation was effective. Full cooperation meant waiving substantial criminal defendant’s rights, carrying comprehensive internal investigations led by big law firms at the company’s costs to identify all its employees and agents’ potential wrongdoings, setting up compliance programs and preventive measures to avoid future wrongdoings, accepting the presence of an external monitor with extensive powers to make the company comply with the terms of the agreements, paying huge fines and forfeiture penalties, etc. In 2003, Deputy Attorney General (15) Larry L. Thompson issued a Memorandum entitled “Principles of Federal Prosecutions of Business Organizations” (the “Thompson Memorandum”) aiming at provid10. United States v. Arthur Andersen, Cr. No. H-02‑121 (S.D.Tex. 2002). 11. United States v. Arthur Andersen, 374 F.3d 281, (5th Cir. 2004). 12. Arthur Andersen LLP v. United States, 544 U.S. 696 (2005). 13. Ch. A. Wray and R.K. Hur, “Corporate Criminal Prosecution in a Post-Enron World: The Thompson Memo in Theory and Practice”, 43 Am. Crim. L. Rev. 1095 (2006). 14. Which entails a risk of removal of a business license in the U.S. or a prohibition from bidding for government contracts if the company is eventually convicted. 15. Second highest-ranking official of the DOJ after the U.S. Attorney General.
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