The Yates Memo: Looking for 'Individual Accountability' in All the Wrong Places Article

Author:Katrice Bridges Copeland
Position:Professor of Law, Penn State Law, The Pennsylvania State University, B.S., The University of Illinois; J.D., The University of Michigan Law School
Pages:1897-1927
SUMMARY

The Department of Justice has received a great deal of criticism for its failure to prosecute both corporations and individuals involved in corporate fraud. In an effort to quiet some of that criticism, on September 9, 2015, then Deputy Attorney General Sally Q. Yates issued a policy entitled, "Individual Accountability for Corporate Wrongdoing," or the "Yates Memo," as it has been called. The... (see full summary)

 
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1897
The Yates Memo: Looking for “Individual
Accountability” in All the Wrong Places
Katrice Bridges Copeland*
ABSTRACT: The Department of Justice has received a great deal of criticism
for its failure to prosecute both corporations and individuals involved in
corporate fraud. In an effort to quiet some of that criticism, on September 9,
2015, then Deputy Attorney General Sally Q. Yates issued a policy entitled,
“Individual Accountability for Corporate Wrongdoing,” or the “Yates
Memo,” as it has been called. The main thrust of the Yates Memo is that in
order for a corporation to receive any credit for cooperating with the
government and obtain leniency in the form of a deferred prosecution
agreement, the corporation must not only conduct an internal investigation
and turn over the results, but it must also point the finger at culpable
employees. The Yates Memo puts a particular emphasis on the need to hold
high-level officials responsible for misconduct. This Article argues that the
Yates Memo is a misguided attempt to further put law enforcement
responsibilities on the backs of corporations rather than the Department of
Justice. In addition, the Yates Memo jeopardizes the corporation’s ability to
conduct effective internal investigations into corporate wrongdoing because it
threatens both the corporate attorney-client privilege and the relationship
between employers and employees. This Article maintains that if the
Department of Justice truly wants to find “individual accountability,” it must
stop relying on corporations and conduct its own investiga tions. Furthermore,
if the Department of Justice wants to obtain criminal convictions of high-level
executives, there may be a need for new legislation that holds high-level
executives accountable for the criminal misdeeds of their subordinates.
I. INTRODUCTION ........................................................................... 1898
II. BACKGROUND ............................................................................. 1901
*
Professor of Law, Penn State Law, The Pennsylvania State University, B.S., Th e
University of Illinois; J.D., The University of Michigan Law School. For helpful comments on this
project, I thank the participants of the Mid-Atlantic People of Color Conference at American
University Washington College of Law, the Seton Hall Faculty Colloquium, and the Lutie Lytle
Black Women Law Professors Conference. I am grateful to Brett Atanasio, Penn State Law Class
of 2017, for research assistance.
1898 IOWA LAW REVIEW [Vol. 102:1897
A. INTERNAL INVESTIGATIONS, DPAS, AND THE CULTURE OF
WAIVER ................................................................................ 1902
B. THE YATES MEMO................................................................. 1906
III. THE YATES MEMO CREATES NEW PROBLEMS FOR THE DOJ ....... 1908
A. THE PROBLEM OF WAIVER ..................................................... 1910
1. When is the Attorney–Client Privilege Waived? ........ 1911
2. The Problems of Waiver in the Yates Memo ............. 1915
B. THE PROBLEMS IN EMPLOYER–EMPLOYEE RELATIONSHIPS ..... 1916
IV. THE YATES MEMO IS NOT THE ANSWER ...................................... 1922
A. THE GOVERNMENT MUST CONDUCT ITS OWN
INVESTIGATION ..................................................................... 1923
B. A LEGISLATIVE SOLUTION WOULD BE MORE EFFECTIVE ........... 1925
V. CONCLUSION .............................................................................. 1926
I. INTRODUCTION
Over the past several years, the idea of individual criminal accountability
for corporate misconduct, or even corporate criminal liability, has been
illusory. The Department of Justice (“DOJ”) has locked itself into the practice
of having corporations do the difficult and expensive work of conducting
internal investigations and turning over the results of those investigations to
the DOJ.1 The DOJ calls this cooperation and rewards a corporation’s
assistance with a deferred prosecution agreement (“DPA”).2 A DPA permits a
company to save its reputation by avoiding a criminal trial or indictment.3
Instead, the DOJ files charges but holds them in abeyance for a period of years
in exchange for the corporation paying a large fine and agreeing to stringent
compliance measures.4 The practice of entering into DPAs rather than
indicting corporations, however, has led to a great deal of criticism of the
DOJ. Critics claim that DPAs are an ineffective deterrent for corporations and
that the best way to deter corporations is instead through individual
prosecutions for corporate misconduct.5 In particular, there has been a public
1. See infra Part II (detailing the evolution of the DOJ’s corporate investigations).
2. David M. Uhlmann, Deferred Prosecution and Non-Prosecution Agreements and the Erosion of
Corporate Criminal Liability, 72 MD. L. REV. 1295, 1301 n.43 (2013).
3. Id.
4. Christopher A. Wray & Robert K. Hur, Corporate Criminal Prosecution in a Post-Enron World:
The Thompson Memo in Theory and Practice, 43 AM. CRIM. L. REV. 1095, 1104–05 (2006).
5. See, e.g., Julie R. O’Sullivan, How Prosecutors Apply the “Federal Prosecutions of Corporations”
Charging Policy in the Era of Deferred Prosecutions, and What That Means for the Purposes of the Fe deral
Criminal Sanction, 51 AM. CRIM. L. REV. 29, 30–31 (2014) (arguing that DPAs “are not
demonstrably better” than individual convictions in furthering the goals of crimin al enforcement,
including deterrence); Uhlmann, supra note 2, at 1298–99.

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