CCT Enforcement and Penalties 5 — Questions and Answers
Question 1: What does 'debarment' mean in the context of federal government contracting enforcement?
- A temporary suspension of contract payments pending investigation
- A prohibition on a company or individual from participating in federal contracts for a specified period (Correct answer)
- A financial penalty equivalent to the contract value
- A requirement to hire an independent auditor
Correct answer: A prohibition on a company or individual from participating in federal contracts for a specified period
Debarment excludes a contractor from award of federal contracts and subcontracts, protecting the government from doing business with non-responsible parties.
Question 2: Under the Dodd-Frank Act, what protections are specifically afforded to employees who report potential securities law violations to their employer's internal compliance hotline?
- Protections apply only if they also report externally to the SEC
- Anti-retaliation protections apply even for purely internal reports under certain circuit court interpretations (Correct answer)
- No protections apply to internal-only reporters under any circumstances
- Protections require the employee to be a shareholder
Correct answer: Anti-retaliation protections apply even for purely internal reports under certain circuit court interpretations
Some federal circuits have held that Dodd-Frank anti-retaliation protections extend to employees who report internally, though the Supreme Court's Digital Realty decision narrowed this to external SEC reporters; the landscape remains nuanced.
Question 3: Which enforcement action can the OCC take against a national bank's senior officer for unsafe or unsound banking practices?
- Removal from office and prohibition from the banking industry (Correct answer)
- Criminal indictment without DOJ involvement
- Automatic loss of personal assets without court order
- Mandatory retirement without compensation
Correct answer: Removal from office and prohibition from the banking industry
The OCC has authority under the Federal Deposit Insurance Act to remove officers and directors from their positions and bar them from future participation in the banking industry.
Question 4: What is the 'cooperation credit' in DOJ enforcement, and how does it affect penalty outcomes?
- A tax deduction for legal defense costs
- A reduction in recommended sanctions for companies that provide substantial assistance in investigating wrongdoing (Correct answer)
- A public acknowledgment that a company assisted investigators
- An automatic declination of prosecution for any cooperating company
Correct answer: A reduction in recommended sanctions for companies that provide substantial assistance in investigating wrongdoing
Cooperation credit is a reduction in penalties granted to companies that proactively assist the DOJ by providing evidence, making witnesses available, and remediating violations.
Question 5: Under EPA's self-disclosure policy, companies that voluntarily discover and disclose environmental violations may receive what primary enforcement benefit?
- Elimination of all compliance costs
- Penalty reductions of up to 100% for gravity-based penalties (Correct answer)
- Automatic waiver of all injunctive relief
- Criminal immunity for all employees involved
Correct answer: Penalty reductions of up to 100% for gravity-based penalties
EPA's Audit Policy allows qualifying companies that self-disclose discovered violations to receive up to 100% reduction in gravity-based civil penalties.
Question 6: What distinguishes a 'criminal' antitrust enforcement action from a 'civil' antitrust enforcement action under the Sherman Act?
- Criminal actions are brought by the FTC; civil actions by the DOJ
- Criminal actions target per se violations like price-fixing; civil actions address conduct evaluated under the rule of reason (Correct answer)
- Criminal actions result only in fines; civil actions can result in imprisonment
- Civil actions require proof beyond a reasonable doubt; criminal actions use preponderance of evidence
Correct answer: Criminal actions target per se violations like price-fixing; civil actions address conduct evaluated under the rule of reason
DOJ pursues criminal charges for per se illegal conduct such as price-fixing and bid-rigging, while civil actions address more ambiguous anticompetitive conduct analyzed under the rule of reason.
Question 7: Under the Federal Civil Penalties Inflation Adjustment Act, how are statutory maximum civil penalties adjusted over time?
- They remain fixed unless Congress explicitly passes new legislation
- They are automatically adjusted annually based on the Consumer Price Index (CPI) (Correct answer)
- They are adjusted every five years by a committee of agency heads
- They are adjusted only when enforcement agencies request congressional approval
Correct answer: They are automatically adjusted annually based on the Consumer Price Index (CPI)
The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to make annual CPI-based adjustments to civil penalty amounts.
CCT Enforcement and Penalties 5
What does 'debarment' mean in the context of federal government contracting enforcement?