An Act To Regulate The Use Of Deferred And Non-Prosecution Agreements

An increasing number of criminal investigations involving business organizations are resolved with non-prosecution or deferred prosecution agreements. Consider, for example, the increasing numbers of Foreign Corrupt Practice Act cases. While many of these case end with prosecutions as to individuals, those involving business organizations are frequently resolved with either a non-prosecution or deferred prosecution agreement. The difference between the two types of agreements is significant. At the same time, there is little doubt that from the organization’s prospective, either agreement is preferable to the consequences which can follow from an indictment.

In view of the increasing use of these agreements, legislation has been introduced in the U.S. House of Representatives to regulate the use of the agreements. The proposed legislation, H.R. 6492, titled Accountability in Deferred Prosecution Act of 2008, is being co-sponsored by Representatives Pascrell, Pallone, Sanches and Conyers.

The Act has three key sections. Section 4 requires the Attorney General to issue written guidelines for the use of the two types of agreements to promote uniformity. Accordingly, the guidelines would: define when and why it would be appropriate to enter into a non-prosecution agreement, rather than a deferred prosecution agreement; identify the terms and conditions which should be included in an agreement; identify the circumstances in which an independent monitor is warranted; define the process by which DOJ decides that the organization has successfully satisfied the terms of the agreement; and describe what constitutes cooperation, if any, that might be required under the agreement with respect to on-going criminal prosecutions.

Another section of the Act focuses on judicial oversight. Section 7 would require that the government file each deferred prosecution agreement in the appropriate District Court. The Act specifies that “the court shall approve the agreement if the court determines the agreement is consistent with the guidelines for such agreements and is in the interests of justice.” In addition, the parties to the agreement and any independent monitor would be required to submit quarterly reports to the court.

Finally, Section 8 of the Act would require public disclosure of the terms of the agreement. Each agreement would be available on a public website of the Department of Justice. Overall, the proposed legislation seeks to provide uniformity and add transparency to the use of deferred prosecution agreements and non-prosecution agreements.