On September 9, 2015, Deputy Attorney General Sally Quillian Yates issued a memorandum outlining the Department of Justice’s increased focused on individual responsibility in investigations of corporate wrongdoing, now colloquially referred to as the “Yates Memorandum.” (We previously reported on the Memorandum here).
Pursuant to the Yates Memorandum’s directive that the U.S. Attorneys’ Manual (USAM) be revised to reflect this increased focus on individuals, on November 16, 2015, such revisions were released. In a speech on that date to the American Banking Association and the American Bar Association Money Laundering Enforcement Conference, Deputy AG Yates highlighted the important nature of the revisions: “We don’t revise the USAM all that often and, when we do, it’s for something important. We change the USAM when we want to make clear that a particular policy is at the heart of what all Department of Justice attorneys do and when we want to make sure that certain principles are embedded in the culture of our institution.”
Among other things, the revisions to the USAM update the “Filip factors” concerning criminal prosecution of organizations and associated commentary. The revisions urge an early focus on individual culpability and possible prosecution in corporate criminal investigations. The revisions, like the Yates Memorandum itself, also make clear that to receive any credit at all for cooperation, corporations must identify culpable individuals and disclose nonprivileged information concerning their misconduct. In her speech, Deputy AG Yates remarked that this “seems to be the policy shift that has attracted the most attention,” but also stated that this concept of corporate cooperation is nothing new. She went on:
“What is new is the consequence of not doing it. In the past, cooperation credit was a sliding scale of sorts and companies could still receive at least some credit for cooperation, even if they failed to fully disclose all facts about individuals. That’s changed now. As the policy makes clear, providing complete information about individuals’ involvement in wrongdoing is a threshold hurdle that must be crossed before we’ll consider any cooperation credit.”
In response to concerns that this policy will require broad and expensive internal investigations, Yates noted that investigations should be tailored to the wrongdoing, and not every investigation needs to be a “years-long, multimillion dollar” effort. She further suggested that if there are doubts about what is required in terms of an investigation, the requisite extent of the investigation could be vetted with the prosecutor.
Yates observed that nothing about the policy requires waiver of the attorney-client privilege. But at the same time, she invoked the adage that “legal advice is privileged. Facts are not.” As such, while a law firm’s interview memoranda prepared during the course of an internal investigation may not need to be disclosed in order for the corporation to receive credit, “the corporation does need to produce all relevant facts—including the facts learned through those interviews—unless identical information has already been provided.”
Yates further observed that the edits to the USAM make clear that [...]