On June 22, 2022, Lauren Kootman, the Assistant Chief of the DOJ’s Fraud Section’s Corporate Enforcement, Compliance & Policy Unit (CECP), reiterated the inclusion of Chief Compliance Officer Certifications stating that they “are going to be incorporated into every — most likely — into every resolution,” and are meant to “empower” CCOs.
Kootman’s remarks follow the Glencore, plc, plea agreement which is the first to include the Compliance Certifications that the DOJ’s Criminal Division leaders, particularly Assistant Attorney General Kenneth A. Polite, have been indicating for months.
The First of Many Compliance Certifications
On May 24, 2022, Glencore, a multinational commodity trading and mining firm, pleaded guilty to FCPA and other charges.
The plea agreement includes a Compliance Certification to be signed by the company’s CEO and Chief Compliance Officer includes certification that: “The Compliance Programs is reasonably designed and implemented to detect and prevent violations of the law.”
On June 22, 2022, Lauren Kootman, the Assistant Chief of the DOJ’s Fraud Division’s Corporate Enforcement, Compliance & Policy Unit (CECP), reiterated the inclusion of Chief Compliance Officer Certifications stating that they “are going to be incorporated into every — most likely — into every resolution,” and are meant to “empower” CCOs. – Remarks at the Women’s White Collar Defense Association’s Global Enforcement & Compliance Series, June 22, 2022; see WSJ.
In several speeches in 2022, Assistant AG and the DOJ have been reiterating that the CCO certifications are “intended to empower our compliance professionals to have the data, access, and voice within those organizations to ensure them and the Department that company has an ethical and compliance-focused program.” (See, e.g., NYU Law Remarks (March 2022), ACAMS Remarks (March 2022), Compliance Week Remarks (May 2022).)
Continued Growth of CECP and Private Practice Leadership
Also in their recent remarks, Assistant AG Polite and CECP Assistant Chief Kootman noted that the Fraud Section and CECP Unit will continue to expand new management that include not only prosecutors, but also industry compliance officers and defense attorneys, “with deep experience in compliance, monitorships, and corporate enforcement matters.”
In addition to Polite, Kootman, and others most recently coming from private practice, on June 7, 2022, the DOJ announced that the former Hewlett Packard CCO, Glenn Leon, was returning to the DOJ to head the Criminal Division’s Fraud Section.
While corporations have been fretting about the Compliance Certifications, these only apply to companies who are settling with the government. Those companies do tend to develop robust compliance programs, and the joint CEO signatory requirement elevates the CCO role.
We would be more concerned if certifications became a requirement for publicly traded companies or an industry better practice element of an Effective Compliance Program. We’ve seen disempowered CCOs leave even without the requirement of a certification, and we would potentially see more leave if there was an added personal risk when they are most needed.
The government has required other C-suite personnel to provide similar certifications in the past few decades, and those requirements have yet to trickle into to industry better practices from C-suite officers to CEOs or Boards.
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