“Flesh-and-blood” corporate criminals have long been a major focus of U.S. enforcement authorities in the battle against foreign bribery. Many of the actions taken against individuals were largely enabled due to the cooperation of culpable corporations with investigative authorities. For years, this cooperation was encouraged by the award of “cooperation credit,” which is a mitigated approach toward cooperating corporations. The Yates Memorandum promulgated recently by the Department of Justice, however, has changed the rules of the game. According to the memo, the Department of Justice will no longer provide “cooperation credit” to corporations unless they demonstrate their cooperative approach by “sacrificing” employees involved in bribery. While the newly emerged policy seeks to send a reinforced message of deterrence to corporate executives, a law and economics analysis reveals that the Yates Memo may fall short of reaching its deterrence goals, and in fact may lead to more—rather than fewer—bribery practices.
Professor of Corporate Compliance and Enforcement, Erasmus University Rotterdam, the Netherlands; formerly, Visiting Fellow, University of California, Berkeley School of Law; and a Senior Associate at De Brauw Blackstone Westbroek (Sharon.oded@debrauw.com). This Article reflects my personal views. I am thankful to Susan Rose-Ackerman, Bruce Ackerman, and the participants of the conference, The Reform of the Regulatory State: Resilience in Times of Crisis, Maastricht University, the Netherlands (January 2016), for useful comments. I am also thankful to Ingeborg Braam for her invaluable assistance.
