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Note: Revising the Organizational Sentencing Guidelines to Eliminate the Focus on Compliance Programs and Cooperation in Determining Corporate Sentence Mitigation

By Lindsay K. Eastman. Full text here.

Corporate crime has dominated the news recently, and likely contributed to the United States’ recent financial crisis. After a corporation is convicted of a federal offense, the judge must determine the proper sentence to meet the goals of deterrence, incapacitation, rehabilitation, and just punishment. The United States Sentencing Commission promulgates the Organizational Sentencing Guidelines to advise judges in this endeavor. The Guidelines correlate an organization’s offense level with a base fine, which is adjusted upward or downward based on the company’s culpability. Points may be deducted from an organization’s culpability score, thereby reducing its sentence, if it had in place an effective compliance program at the time of the violation and/or fully cooperated in the government investigation.

As such, a corporation may substantially reduce its criminal punishment through adopting a facially effective compliance program before the crime, or cooperating with prosecutors in the wake of an offense. This approach is problematic for several reasons. First, the weight of evidence refutes the notion that compliance programs prevent misconduct or detect crime within organizations. Additionally, employee and organizational rights are compromised when the government pressures a company to cooperate. This Note recommends that the Organizational Sentencing Guidelines be revised to eliminate reductions in culpability scores based on compliance programs and cooperation. Instead, these considerations should be incorporated into the general factors courts already weigh in sentencing, which would provide judges the freedom to calculate the appropriate fine in each case and ensure that corporations receive just punishment for their crimes.