Each year, the Department of Justice (DOJ) and other federal agencies enter into scores of deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) with businesses: DPAs involve cases in which criminal charges have been filed, and the DOJ asserts that judicial oversight is limited to ensuring their compliance with the Speedy Trial Act; NPAs are entered into without the filing of any formal criminal charges, and no judge ever reviews their contents. Faced with the threat of criminal charges, most companies agree to settle because the collateral consequences of a conviction (or often, even an indictment) are so harsh—in many cases, they amount to a corporate death sentence.
***UPDATE: Shortly after the publication of this report, which analyzes the government’s prosecution of FedEx in Case Study 3, the government suddenly dropped its case mid-trial. The government’s loss evidences the tenuousness of its theory of the case, but is unlikely to lead other companies to take their cases to trial. For more on this, see: Thank You FedEx, For Standing Up to the Feds
- Since the beginning of 2010, 17 of America’s 100 largest companies, as ranked by Fortune magazine, have been operating under a DPA or an NPA; in 2015, the federal government entered into 100 such agreements—a record—and companies paid out more than $6 billion under their terms without any guilty plea or adjudication.
- DPAs and NPAs that the government reaches with companies involve significant oversight and supervision—even dramatic restructurings of business practice, including changing top management personnel and compensation; wholesale modifications of sales and marketing strategies; and the hiring of “independent” monitors with vast oversight powers, paid out of corporate coffers but reporting to prosecutors.
- DPAs and NPAs raise serious legal and policy issues, including those related to: national sovereignty; free speech; judicial oversight and transparency; and the desirability of deputizing private businesses to undertake law-enforcement activities.