In the past, the Antitrust Division has used its “Frequently Asked Questions” piece to announce significant changes in the Amnesty Program. In November 2008, for example, they made mandatory an explicit admission of criminal wrongdoing. Before then, the applicant need only have reported “possible” criminal activity. FAQs, p.6, fn. 7
The Division’s January 17, 2017, edition makes two more very significant changes: (1) to obtain a marker, counsel must identify the client (FAQs, p.3) and (2) amnesty for executives is not guaranteed under the often-used Type B Leniency. In that situation, “…the Division has more discretion…”( FAQs, p. 22).
Both changes will give counsel and potential amnesty applicants pause. Before this revision, counsel need only have identified the client’s industry in enough detail for the Division to confirm that there were no prior markers pending. Certainly, counsel would not have applied for a marker even under the old standard without some significant investigation and serious if rapid reflection. Now counsel probably need to be fairly certain that they will perfect the marker and apply for Amnesty. Otherwise, counsel will simply have specifically identified a client as having some sort of significant issue. How to gracefully back out of that situation without leaving a red flag in the Division’s hands would be challenging, to say the least.
The second change is even more serious. Under past Amnesty practice, counsel could assure senior executives that as long as they fully cooperated, they would be protected. Now that advice will often need to be hedged, especially because the Division prefers to proceed under Type B Leniency whenever possible. For Type A Leniency—and a guarantee of protection for senior executives—“the Division [must not]have received information about the illegal activity being reported from any other source.” In practice, that is often a high bar for the applicant. “Any other source” is an exceptionally broad concept. For the more common Type B Leniency, the applicant need simply be first to come in at a time when the Division can’t prove a criminal case. The common scenario, of course, is when the Division issues grand jury subpoenas. In that situation, counsel can no longer promise protection for cooperating executives if the company’s application is granted.
The difficulty of that situation need only be mentioned for it to be appreciated, particularly given the Division’s requirement that full cooperation include cooperation against the company’s individuals as deemed necessary by the Division.
How these changes will play out in practice is hard to predict. Perhaps the Division’s thinking is that they want the standard for a marker to be higher. In practice, it will be—counsel will have to be a long way toward concluding that the application will be perfected before deciding to identify a client. As for the second change, the real proof will be in how the Division exercises the discretion it has now claimed. Perhaps they believe, first, that a company with a criminal problem will choose protection even if it leaves some executives exposed and, second, that they ought to be able to prosecute especially bad actors even if they give the company and some executives a pass.