Department of Justice Gets Touchy Over Corporate Enforcement Record

In his 2020 book “Numbers Don’t Lie: 71 Things You Need to Know About the World,” Canadian data scientist Vaclav Smil writes: “Numbers may not lie, but individual perceptions of them differ.” In other words, while hard data itself may be indisputable, people can look at the same set of statistics in the same context and disagree about what they’re conveying.

That sounds like a philosophy tailor-made for the leader of the U.S. Department of Justice’s criminal fraud division. He seems defensive when it comes to talking about criminal investigations of corporate malfeasance.

Glenn Leon took over as the chief of the DOJ’s criminal fraud section in September following nearly a decade as an ethics and compliance officer at Hewlett Packard Enterprise Co. Speaking last month at an American Conference Institute meeting, he apparently wanted to set the record straight about DOJ’s efforts to police corporations. Guilty pleas by corporations declined starkly in the last two decades, down from 304 in 2000 to 90 last year. However, according to reporting on the event by The Wall Street Journal, Leon said DOJ’s performance metrics “are quite high in several respects.” He also noted that his division is concentrating on cases believed to have higher deterrence value against other misconduct.

Notably, Leon assumed his new role amid a push from President Joe Biden’s administration to get serious about enforcement against companies and executives who end up on the wrong side of the law. Since then, DOJ has vowed to turn around its record on corporate crime. In a memo issued in September, Deputy Attorney General Lisa Monaco highlighted the building blocks of the plan to strengthen enforcement. Among them, DOJ is cutting back on deferred prosecution agreements for corporations. Additionally, companies are being encouraged to develop internal policies for taking back portions of executive compensation when malfeasance leads to restatements of corporations’ financial results.

Leon isn’t the only DOJ official going to bat for his division’s commitment to enforcement. The chief of DOJ’s Foreign Corrupt Practices Act unit, David Last, is cautioning against drawing dire conclusions from data showing a downturn in enforcement actions related to foreign bribery. Last is predicting FCPA statistics will see a noticeable surge in the coming year.

The comments coming from DOJ leaders echo similar tough talk from other government agencies, including the Securities and Exchange Commission. Meanwhile, Leon has pushed back against concerns that some of the new compliance measures go too far. The one that is arguably drawing the most scrutiny is a requirement as part of companies’ criminal settlements that CEOs and chief compliance officers personally certify the effectiveness of their compliance programs.

From Leon’s point of view, executives at companies in those situations shouldn’t have any qualms with the certification requirement if they’ve maintained consistent contact with DOJ. But just like his take on his section’s enforcement statistics, reasonable minds may differ.