Compliance Guidance and Sentencing Guidelines Citations in House Oversight Document

policy/2010/34-61340.pdf. 3° See U.S. SENTENCING GUIDELINES at § 8B2.1(a)(2). 301 US, SENTENCING GUIDELINES § 8B2.1(b). 3°? See generally DEBBIE TROKLUS, ET AL., COMPLIANCE 101: How TO BUILD AND MAINTAIN AN EFFECTIVE COMPLIANCE AND ETHICS PROGRAM, SOCIETY OF CoRP. COMPLIANCE AND ETHICs (2008) 3-9 [hereinafter COMPLIANCE 101] (listing reasons to implement compliance program, including protecting company’s reputation, creating trust between management and employees, preventing false statements to customers, creating efficiencies and streamlining processes, detecting employee and contractor fraud and abuse, ensuring high- quality products and services, and providing “early warning” system of inappropriate actions); TRANSPARENCY INT'L, BUSINESS PRINCIPLES FOR COUNTERING BRIBERY: SMALL AND MEDIUM ENTERPRISE (SME) Epirion 5 (2008) (citing benefits of anti-bribery program like protecting reputation, creating record of integrity enhances opportunities to acquire government business, protecting company assets otherwise squandered. on bribes); MarK PIETH, HARMONISING ANTI-CORRUPTION COMPLIANCE: THE OECD Goop PRACTICE GuIDANCE 45-46 (2011) [hereinafter HARMONISING ANTI- CORRUPTION COMPLIANCE] (citing need for compliance program to prevent and detect in-house risks, such as workplace security or conflicts of interest, and external risks, like anti-trust violations, embargo circumvention, environmental hazards, and money laundering). 303 Debarment authorities, such as the Department of Defense or the General Services Administration, may also consider a company’s compliance program when deciding whether to debar or suspend a contractor Specifically, the relevant regulations provide that the debarment authority should consider “[w]hether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment,’ and “[w]hether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs.’ 48 C.ER. § 9.406-1(a). 36 Seaboard Report, supra note 298; U.S, SEC. AND EXCHANGE Comm., REPORT OF INVESTIGATION PURSUANT TO SECTION 21(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AND COMMISSION STATEMENT ON THE RELATIONSHIP OF COOPERATION TO AGENCY ENFORCEMENT Decisions, SEC Rel. No. 44969 (Oct. 23, 2001), available at http ://www.sec.gov/ litigation/ investreport/34-44969 whtm. 33 USAM § 9-28.300. When evaluating the pervasiveness of wrongdoing within the corporation, prosecutors are advised that while it may be appropriate to charge a corporation for minor misconduct where the wrongdoing was pervasive, “it may not be appropriate to impose liability upon a corporation, particularly one with a robust compliance program in place, under a strict respondeat superior theory for the single isolated act of a rogue employee.” /d. § 9-28.500.A (emphasis added), Prosecutors should also consider a company’s compliance program when examining any remedial actions taken, including efforts to implement an effective compliance program or to improve an existing one. As the commentary explains, “although the inadequacy ofa corporate compliance program is a factor to consider when deciding whether to charge a corporation, that corporation’s quick recognition of the flaws in the program and its efforts to improve the program are also factors to consider as to appropriate disposition ofa case.” Id. § 9-28.900.B. Finally, the Principles of Federal Prosecution of Business Organizations provides that prosecutors should consider the existence and effectiveness of the corporation's pre-existing compliance program in determining how to treat a corporate target. Td. § 9-28.800. 306 See USAM § 9-28.800.B; see also US. SENTENCING GUIDELINES § 8B2.1(a) (2011) (“The failure to prevent or detect the instant offense does not necessarily mean that the program is not generally effective in preventing and detecting criminal conduct.”), 307 See Press Release, U.S. Dept. of Justice, Former Morgan Stanley Managing Director Pleads Guilty for Role in Evading Internal Controls Required by FCPA (Apr. 25, 2012) (declining to bring criminal case against corporate employer that “had constructed and maintained a system, of internal controls, which provided reasonable assurances that its employees were not bribing government officials”), available at hetp:/ / wwwjustice.gov/opa/pr/20 12/April/ 12-crm-534.html; Press Release, US. Sec. and Exchange Comm., SEC Charges Former Morgan Stanley Endnotes Executive with FCPA Violations and Investment Adviser Fraud, No. 2012-78 (Apr. 25, 2012) (indicating corporate employer was not charged in the matter and had “cooperated with the SEC’s inquiry and conducted a thorough internal investigation to determine the scope of the improper payments and other misconduct involved”), available at hetp:/ /WWW.sec. gov/news/press/2012/2012-78 htm. 308 See USAM § 9-28.800.B. 3 See, e.g, INTL CHAMBER OF COMMERCE, ICC RULES ON COMBATING CoRRUPTION (2011) [hereinafter ICC RULES ON ComBATING Corruption], available at http://www.iccwbo. org/ uploadedFiles/ ICC/ policy/ business_in_society/ Statements/ ICC_Rules_on_Combating_Corruption_201 ledition.pdf; TRANSPARENCY INT'L, BUSINESS PRINCIPLES FOR COUNTERING BriBERy (2d ed. 2009) [hereinafter BUSINESS PRINCIPLES FOR COUNTERING BRIBERY], available at http ://www.transparency. org/: global_priorities/ private_sector/ business_principles/ ; UNITED KINGDOM MINIsTRY OF JUSTICE, THE BRIBERY ACT OF 2010, GUIDANCE ABOUT PROCEDURES WHICH RELEVANT COMMERCIAL ORGANISATIONS CAN PUT INTO PLACE TO PREVENT PERSONS ASSOCIATED WITH THEM FROM BRIBING (2010), available at http:// wwwjustice.gov.uk/ downloads/ legislation/ bribery-act-20 10-guidance. pdf; WorLp BANK Group, INTEGRITY COMPLIANCE GUIDELINES (2011) [hereinafter INTEGRITY COMPLIANCE GUIDELINES], available at http :// siteresources.worldbank.org/ INTDOII/Resources/ Integrity_Compliance_Guidelines.pdf; As1a-PaCIFIC ECONOMIC CooPERATION, APEC ANTI-CORRUPTION CODE OF CONDUCT FOR Business (2007) [hereinafter APEC ANTI-CORRUPTION CODE], available at http ://www.apec.org/Groups/SOM-Steering-Committee- on-Economic-and-Technical- Cooperation/ Task- Groups/~/ media/ Files/Groups/ACT/07_act_codebrochure.ashx; INT’L CHAMBER OF COMMERCE, TRANSPARENCY INT'L, UNITED NATIONS GLOBAL Compact, and WorLp Economic Forum, RESISTING EXTORTION AND SOLICITATION IN INTERNATIONAL TRANSACTIONS: A Company Tool FOR EMPLOYEE TRAINING (2011), available at hetp://www3 .weforum.org/docs/WEF PACI RESIST Report_2011. pdf; INTL CHAMBER OF COMMERCE, ET AL., CLEAN BUSINESS Is Goon BusinEss, available at http ://www3 .weforum.org/docs/ WEF_PACI_BusinessCaseFightingCorruption_2011.pdf; WorLD ECONOMIC FoRuM, PARTNERING AGAINST CORRUPTION — PRINCIPLES FOR COUNTERING BRIBERY (2009) [hereinafter PARTNERING AGAINST CorRuPTION |, available at http://www3. weforum.org/ docs/ WEF_PACI_Principles_2009. pdf; ; WORKING GRovp ON BRIBERY, OECD, Goon PRACTICE GUIDANCE ON INTERNAL CONTROLS, ETHICS, AND COMPLIANCE 2010, [hereinafter OECD Goop PracTIcE GUIDANCE| available at http://www.oecd. org/dataoecd/5/51/44884389.pdf; UN. GLoBaL ComPAcT, THE TEN PRINCIPLES [hereinafter THE TEN PrincipLes] available at http:// www.unglobalcompact.org/; aboutITheGC/ TheTenPrinciples/ index.html. 319 This is also reflected in the Sentencing Guidelines, which recognizes that no single, formulaic set of requirements should be imposed, but instead focuses on a number of factors like applicable industry practice or the standards called for by any applicable governmental regulation, the size of the organization, and whether the organization has engaged in similar misconduct in the past. See US. SENTENCING GUIDELINES § 8B2.1 & app. note 2 (2011). 311 This was underscored by then-SEC Commissioner Cynthia Glassman in 2003 ina speech on the SEC’s implementation of the Sarbanes-Oxley Act: “[T Jhe ultimate effectiveness of the new corporate governance rules will be determined by the ‘tone at the top. Adopting a code of ethics means little if the company’s chief executive officer or its directors make clear, by conduct or otherwise, that the code’s provisions do not apply HOUSE_OVERSIGHT_022618