Following the confirmation of new U.S. Attorney General Pamela Bondi on February 4, the U.S. Department of Justice (DOJ) issued 14 memoranda the following day, providing new direction and guidance to the department’s employees. The sheer number of new directives, issued in one day alone, is notable.
Within the new memos, the DOJ provided important substantive guidance to prosecutors and announced the types of matters it intends to pursue in the near term. Those of particular import to U.S. corporations and executives, and the financial services industry, are the new priorities identified by the DOJ and the lack of focus on traditional white-collar matters such as financial crimes, health-care-related crimes, foreign bribery related to obtaining and retaining business, and domestic public corruption.
The 14 memos released are:
Notable Developments
Charging, Plea Negotiations and Sentencing
In its memorandum regarding charging, plea negotiations and sentencing, line prosecutors are directed to “charge and pursue the most serious, readily provable offense” in the absence of “unusual facts.” The memo clarifies that the most serious offenses will be those punishable by death or the most substantial period of incarceration calculated under the U.S. Sentencing Guidelines. It also directs prosecutors to generally seek sentences within the recommended guidelines range at sentencings.
The memo sets forth the DOJ’s investigative and charging priorities, which focus on immigration enforcement; human trafficking and smuggling; and transnational organized crime, cartels and gangs. Notably, the memo announces the disbanding of the National Security Division’s Corporate Enforcement Unit. The Corporate Enforcement Unit focused on investigating and prosecuting corporate crimes that impact U.S. national security, including violations related to export controls, sanctions evasion and other economic crimes. The unit was tasked with protecting sensitive technologies and preventing unlawful transactions with sanctioned entities.
Cartels and Transnational Criminal Organizations
In a separate memorandum focused on a policy goal seeking the total elimination of cartels and transnational criminal organizations (TCOs), the DOJ announced new priorities in pursuit of its objectives. In one significant change, the DOJ directed the Criminal Division’s Foreign Corrupt Practices Act (FCPA) Unit to “prioritize investigations related to foreign bribery that facilitates the criminal operations of cartels and TCOs, and shift focus away from investigations and cases that do not involve such a connection.” The memo stated that the FCPA unit should focus on cases such as the “bribery of foreign officials to facilitate human smuggling and the trafficking of narcotics and firearms.”
This is a critical change for a unit that has historically targeted the bribery of foreign officials by U.S. businesses and individuals to obtain or retain business for U.S. companies overseas. The explicit charge to “shift focus away” from FCPA investigations unconnected to cartels and TCOs suggests that U.S. actors may have less incentive to enforce compliance policies aimed at stemming the bribery of foreign officials by U.S. companies. It may presage a decline in ethical corporate practices as U.S. companies feel pressure to pay bribes to stay competitive in a less regulated environment.
The same memorandum directs the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) to prioritize investigations, prosecutions and asset forfeiture actions that target the activities of cartels and TCOs. This is a change from MLARS’s previous charge of generally combatting all types of money laundering and seeking to recover illegally obtained criminal proceeds. Similarly, the memorandum announces the disbanding of the DOJ’s Task Force KleptoCapture, the Kleptocracy Team and the Kleptocracy Asset Recovery Initiative. Those teams focused on: (1) enforcing sanctions, export restrictions and economic countermeasures against Russian officials and their supporters; (2) combating global corruption by targeting the proceeds of foreign corruption and seeking to recover assets illicitly obtained by foreign officials through bribery and other corrupt practices; and (3) identifying, investigating and prosecuting cases involving kleptocracy (defined as the abuse of power by government officials for personal gain) by tracing and recovering stolen assets, and prosecuting corrupt officials.
Key Takeaways
The new memoranda issued by the DOJ are notable for the new policy directions and department priorities explicitly announced, as well as the change in priorities for some sections and the particular units that are now disbanded. Also noteworthy are the lack of focus on traditional white-collar criminal activities and the department’s long-term priorities. Companies have invested in strong compliance policies for years to prevent corporate overseas bribery. The prosecution of generic FCPA criminal activity, among other things, is no longer a priority for the DOJ.
Despite these policy changes, businesses must continue to robustly pursue compliance practices to ensure that employees are not engaging in criminal conduct in violation of laws that remain in force. Although a lower priority at the DOJ, expect prosecutors who have historically focused on white-collar and financial crimes, such as the U.S. Attorney’s Office for the Southern District of New York, to continue to aggressively prosecute those cases.
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