As part of its mission to defend the interests of the United States, DOJ controls all criminal prosecutions in which the United States has an interest, including those against corporations. Prosecutors’ decisions on investigating, charging, and negotiating a plea or other agreement with respect to corporate crimes are guided by DOJ’s Principles of Federal Prosecution of Business Organizations, which instruct prosecutors to consider nine factors when determining how to treat a corporation suspected of criminal misconduct and provide guidance on when the nine factors most appropriately apply. The principles also provide a number of actions prosecutors may take regarding a corporation, including declining to prosecute, entering into a DPA or NPA, or criminally prosecuting the corporation. According to the principles, DPAs and NPAs are an important alternative to declining prosecution against a corporation and obtaining the conviction of a company through prosecution. The nine factors, and examples of the manner in which they influence the prosecutors’ choices of action, are shown in figure 1 below. As part of DPAs and NPAs, companies are generally required to comply with a set of terms for a specified duration in exchange for prosecutors deferring the decision to prosecute or deciding not to prosecute. These terms have included: monetary payments—such as restitution to victims of the crime, forfeiture of the proceeds of the crime, and monetary penalties imposed by DOJ; requirements that the company improve or enhance its compliance program; requirements that the company hire, at its own expense, an independent monitor to assist the company in establishing a compliance program, review the effectiveness of a company’s internal control measures, and determine whether the company has otherwise met the terms of the agreements (The agreements typically require monitors to periodically submit written reports to track the company’s progress in complying with the terms of the DPA or NPA. ); and extraordinary restitution provisions, which are payments or services to organizations or individuals not directly affected by the crime. (DOJ issued guidance in May 2008—which was incorporated into the United States Attorneys’ Manual—prohibiting the use of terms requiring payments to charitable, educational, community, or other organizations or individuals that are not the victims of the criminal activity or are not providing services to redress the harm caused by the criminal conduct. According to DOJ, the use of such terms could create actual or perceived conflicts of interest or other ethical issues.) NPAs typically are not filed with the court, but instead are maintained by DOJ and the corporation. On the other hand, DPAs are typically filed with the court, along with a document that identifies the charges that the prosecution has brought against the corporation. The Speedy Trial Act sets time limits for the various phases of the criminal justice process—for example, a defendant’s trial must begin within 70 days of charges being filed or the date when the defendant appeared before the court —and violations of these time limits may result in the dismissal of the case. However, the Speedy Trial Act also includes provisions that allow for certain delays that do not count towards the act’s time limits. Under one of these provisions, courts have the authority to approve the deferral of a prosecution pursuant to a written agreement between the government and the defendant. DOJ has made more frequent use of DPAs and NPAs in recent years, entering into four agreements in fiscal year 2003 compared to a high of 38 agreements in fiscal year 2007, although use declined in fiscal years 2008 and 2009 when DOJ entered into 24 and 23 agreements, respectively. According to DOJ officials, the decrease in the use of DPAs and NPAs cannot be attributed to any specific reason because DOJ is a reactive agency and experiences fluctuations in the types of cases that occur each year. However, the officials noted that fiscal year 2007 appeared to be an aberration because the use of DPAs and NPAs in fiscal year 2007 was significantly higher than in any other fiscal year. Figure 2 below depicts the number of DPAs and NPAs by fiscal year. From 1993—when the first DPA or NPA was reached—to September 2009, 38 of the 94 USAOs have entered into at least one DPA or NPA, with the total number of agreements per office ranging from 1 agreement entered into by 21 of these USAOs, to 23 agreements entered into by the USAO for the Southern District of New York. In addition, during this same time period, of the seven litigating components based in DOJ headquarters, five have entered into DPAs or NPAs, with the total number of agreements per division ranging from one agreement entered into by the National Security Division to 49 entered into by the Criminal Division. See appendix II for the number of DPAs and NPAs entered into by the USAOs and Divisions. As shown in table 1, the number of DPAs and NPAs entered into by the USAOs is small compared to the number of corporate prosecutions they pursued, but the number of DPAs and NPAs entered into by the Criminal Division is similar to—and in some fiscal years, more than—the number of corporate prosecutions it pursued. For example, USAOs pursued almost 18 times more corporate prosecutions than DPAs and NPAs from fiscal years 2004 to 2009. For the same time period, the Criminal Division pursued 0.9 times more prosecutions than DPAs and NPAs, or rather 1.2 times more DPAs and NPAs than prosecutions. According to Criminal Division officials, unlike the USAOs, the number of DPAs and NPAs the division has entered into was similar to the number of corporate prosecutions it carried out for two reasons. First, the Criminal Division more often handles cases against larger multinational corporations—many of which may have federal contracts—than the USAOs do. Prosecution of such companies may have significant collateral consequences, such as the inability to contract with the federal government—a factor prosecutors are to consider based on the Principles of Federal Prosecution of Business Organizations when determining whether to enter into a DPA or NPA versus prosecute. Second, the Criminal Division handles all cases involving violations of the Foreign Corrupt Practices Act, for which cases have increased since fiscal year 2007 and for which the Criminal Division has entered into DPAs to improve companies’ compliance. Prior to 2009, DOJ did not have a mechanism to centrally track its use of DPAs and NPAs, which inhibited its ability to accurately report the number and terms of the agreements to the Congress and the public. However, in response to our requests for information, DOJ has recently taken steps to better track its use of DPAs and NPAs, steps that will allow it to more accurately report on the number and terms of DPAs and NPAs to Congress and the public, and identify best practices and ensure consistency across agreements. In January 2008, as part of its oversight of DOJ’s efforts to combat corporate crime, the House Judiciary Committee requested that DOJ disclose all of the DPAs and NPAs that DOJ had entered into since January 20, 2003. On May 15, 2008, DOJ submitted a total of 76 agreements entered into during this 5-year time frame, but acknowledged that the DPAs and NPAs it provided to the committee did not represent all agreements entered into during the requested time period. According to DOJ, to respond to the committee’s request, it had to ask the USAOs and litigating divisions to submit all DPAs and NPAs entered into by their respective offices. However, it appears that the USAOs and divisions did not provide all the DPAs and NPAs they had entered into because, in conducting our audit work, we found that DOJ had actually entered into 99 agreements during that time period. According to standards for internal control in the federal government, information—which could include entering into a DPA or NPA—should be recorded and communicated to management in a form and within a time frame that enables it to carry out its internal control and other responsibilities. Subsequently, in response to our inquiries, DOJ has taken several steps to better track its use of DPAs and NPAs, steps that will better position DOJ to more accurately report to Congress and the public on the number of existing DPAs and NPAs, the outcome of the cases, and the terms of the agreements. According to the Senior Counsel to the ODAG, DOJ wants to track the agreements internally to help identify best practices and ensure consistency across agreements, with the recognition that the agreements will need to vary based on the facts of each case. The new tracking efforts include: In April 2009, EOUSA—which provides administrative and operational support to the USAOs—updated the case management system USAOs use to maintain workload information, the Legal Information Office Network System (LIONS), and issued guidance to prosecutors on the procedure for tracking their use of DPAs and NPAs in LIONS. According to an EOUSA data official, instructing all USAOs to enter data on DPAs and NPAs in LIONS will provide EOUSA with the capability to centrally track the use of these agreements across the USAOs. Similarly, in May 2009, the Criminal Division updated its case management system, the Automated Case Tracking System (ACTS), and issued guidance to prosecutors on the procedure for tracking DPAs and NPAs in this system. According to a Criminal Division data official, prosecutors were already tracking their use of DPAs and NPAs largely in the manner described in the guidance, but the updates to the system allowed the Criminal Division to centrally track DPAs and NPAs separately, a process that it could not do previously. Doing so will provide the Criminal Division with the capability to centrally maintain data on the use and characteristics of both types of agreements. DOJ is currently in the process of developing a new case management system—the Litigation Case Management System (LCMS)—that seven of DOJ’s litigating components are to eventually use, including the USAOs and four of the five headquarters-based components that have entered into DPAs and NPAs.