CCCP Government Investigation Response 5 — Questions and Answers
Question 1: What is 'spoliation of evidence' and what are its potential consequences in a government investigation?
- Sharing confidential investigation findings with unauthorized third parties, triggering regulatory sanctions
- The intentional or negligent destruction of relevant evidence, potentially resulting in adverse inference instructions or sanctions (Correct answer)
- Submitting falsified documents to government investigators in response to a subpoena
- Failing to disclose known violations within the mandatory reporting window
Correct answer: The intentional or negligent destruction of relevant evidence, potentially resulting in adverse inference instructions or sanctions
Spoliation—destroying or altering relevant evidence—can result in court-imposed sanctions including adverse inference instructions, striking of defenses, or even default judgment.
Question 2: Which of the following best describes the 'cooperation credit' framework under the USAM (United States Attorneys' Manual)?
- A fixed percentage reduction in fines granted automatically upon voluntary disclosure
- A discretionary credit rewarding companies that assist the government by disclosing facts and identifying responsible individuals (Correct answer)
- A mandatory immunity provision for companies that self-report FCPA violations within 30 days
- A program allowing companies to offset fines by funding government-approved compliance programs
Correct answer: A discretionary credit rewarding companies that assist the government by disclosing facts and identifying responsible individuals
Cooperation credit under the USAM is discretionary and depends on the quality and timeliness of the company's assistance, including disclosure of facts about culpable individuals.
Question 3: When government investigators seek to interview a company's employees, what should compliance counsel advise regarding individual employee rights?
- Employees must cooperate with all government interviews as a condition of their employment
- Employees should be informed they may retain personal counsel and have the right to decline voluntary interviews (Correct answer)
- Employees are prohibited from speaking with government investigators without company counsel present
- Employees who refuse to be interviewed will automatically be terminated for cause
Correct answer: Employees should be informed they may retain personal counsel and have the right to decline voluntary interviews
Employees have the right to retain personal counsel and are not legally required to submit to voluntary government interviews, and compliance counsel should inform them of these rights.
Question 4: What is the purpose of a 'privilege log' in responding to a government subpoena?
- A record of all documents shared with the government to track production completeness
- A log identifying documents withheld from production and the specific privilege claimed for each (Correct answer)
- A list of all outside counsel retained during the investigation for disclosure to regulators
- A chronological record of all communications with the government regarding the investigation
Correct answer: A log identifying documents withheld from production and the specific privilege claimed for each
A privilege log must identify each withheld document by description, date, author, and recipient, and state the privilege claimed, allowing the government to challenge specific assertions.
Question 5: Under the Foreign Corrupt Practices Act (FCPA), what constitutes a 'government official' for purposes of the anti-bribery provisions?
- Only elected officials and cabinet-level appointees of foreign national governments
- Any officer or employee of a foreign government or public international organization, or any person acting in an official capacity (Correct answer)
- Foreign government officials at the federal level only, excluding state and local officials
- Officials of governments with which the U.S. has bilateral anti-corruption treaties
Correct answer: Any officer or employee of a foreign government or public international organization, or any person acting in an official capacity
The FCPA's definition of 'foreign official' is broad, encompassing any officer or employee of a foreign government at any level, state-owned enterprises, or public international organizations.
Question 6: What is the primary risk to a company when it selectively produces documents during a government investigation?
- The company may receive a reduced cooperation credit for failing to produce all responsive documents
- The government may argue the company waived privilege over all documents in the same subject matter (Correct answer)
- The company faces automatic criminal charges for document withholding under 18 U.S.C. § 1001
- The SEC will automatically convert the civil investigation to a criminal referral
Correct answer: The government may argue the company waived privilege over all documents in the same subject matter
Selective production can trigger subject matter waiver, where a court finds that disclosing some privileged documents on a topic waives privilege over all documents on that subject.
Question 7: What does it mean for a company to 'toll' the statute of limitations during a government investigation negotiation?
- The company pays a fee to extend the time period in which regulators may bring charges
- The company agrees to temporarily suspend the running of the statute of limitations while negotiations with the government are ongoing (Correct answer)
- The government obtains a court order freezing the company's assets during the investigation period
- The company waives its right to assert a statute of limitations defense in exchange for cooperation credit
Correct answer: The company agrees to temporarily suspend the running of the statute of limitations while negotiations with the government are ongoing
Tolling agreements allow both parties to pause the limitations clock during negotiations, giving the government time to complete its investigation without rushing to file charges prematurely.
CCCP Government Investigation Response 5
What is 'spoliation of evidence' and what are its potential consequences in a government investigation?