Summary and Analysis of Department of Justice Federal Prosecution of Corporations Guidelines
Prepared by McGuire, Woods, Battle & Boothe LLP – Government Investigations & Enforcement Team


At common law, corporations were not generally subject to criminal liability. The oft-stated reason for this rule was that corporations lacked the "soul" necessary to form the guilty mind or mens rea upon which criminal liability was based. In 1909, the Supreme Court abandoned that view, holding in the case of New York Central & H.R. Co. v. United States, 212 U.S. 481 (1909), that the guilty intent of a corporation’s employees could be imputed to the corporation itself.

Ninety years after New York Central, the United States Department of Justice ("DOJ") has adopted, for the first time, a set of internal guidelines entitled simply "Federal Prosecution of Corporations" (the "Guidelines"). This memorandum summarizes and analyzes the Guidelines with an emphasis on identifying those areas in which the Guidelines may prove helpful to corporations and their counsel in arguing against prosecution.

The Guidelines are significant for several reasons:

    • The Guidelines frequently mention "corporate culture" and the power of prosecutors to affect such culture. This concept is not defined in the Guidelines and thus raises questions concerning the proper aim of federal law enforcement. The danger exists that this concept may be interpreted either generally, or, in particular cases, to mean that a prosecutor has license to threaten prosecution in order to coerce a corporation to modify a practice that, while legal, may conflict with DOJ’s concept of acceptable "culture."
    • The Guidelines reveal that the twin concerns raised by the petitioner in the New York Central case (the absence of due process in taking property from shareholders and the unfairness of charging the corporation for acts that were not approved by its governing body) remain relevant. These twin concerns appear in various forms throughout the Guidelines, and corporations seeking to avoid criminal charges may make arguments in those and similar terms. While such arguments are not likely to convince a prosecutor that she has no power to charge a corporation, that may will affect her willingness to do so.
    • They provider valuable insights into the thought processes by which federal prosecutors decide whether or not to prosecute a corporate entity.
    • In describing the considerations that a prosecutor should or may weigh in making such a decision, they provide a partial catalog of arguments that can be made on behalf of a corporation seeking to avoid prosecution.
    • The existence of such a formal policy may strengthen the willingness of prosecutors to consider charging corporations.

2003 The Federalist Society