DOJ’s Outsourcing of Investigations Under Fire (Again)

April 25, 2023

By Sara Kropf

The Department of Justice repeatedly issues guidance to beg coerce encourage companies to self-report wrongdoing and, in effect, sell out their executives as the wrongdoers. As part of this “cooperation,” companies will conduct an internal investigation, review massive numbers of documents, and interview employees and officers. Then, the company summarizes what it found and reports it to DOJ.

Think of it as Cooperation by PowerPoint.TM

If DOJ directs the company to interview certain employees or ask about certain topics, does the interview become a government interview? If it is, then the people interviewed have certain rights, chiefly that they cannot be compelled to incriminate themselves during the interview.

An interesting case is playing out in federal court in New Jersey that will test some of these limits.

Background Facts

In a case related to Cognizant Technology Solutions Corporation, the company’s Chief Legal Officer (“CLO”) and President are accused of violating the Foreign Corrupt Practices Act (“FCPA”) by conspiring to pay a $2 million bribe to obtain a permit for opening an office facility in India. Another company, Larsen & Toubro Construction Company (“L&T”) acted as the go-between for the supposed bribe.

I won’t use their names because they haven’t been found guilty of anything. I’m sure you can google it, but I won’t add to the media chatter.

What Are Garrity Rights?

The interesting legal issue in this case is the application of the Supreme Court’s decision in Garrity v. New Jersey, 385 U.S. 493 (1967), to interviews by a private employer.

In Garrity, the Court addressed what happens when the government compels an interview of a government employee by making the employee’s job contingent on answering questions. This situation most often arises in Office of Inspector General (OIG) interviews—the employee can either (a) agree to the interview and incriminate herself or (b) lose her job for refusing to be interviewed. Garrity held that in this situation, the government has “coerced” the employee’s statements, thus violating the Fifth Amendment’s protection against self-incrimination. The result is that the government cannot use the statements as evidence in a criminal trial. (The government can use the statements to fire the employee, however.)

This holding, of course, makes sense when the employer is the government and thus the government is compelling the employee’s self-incriminating statements. It is not as obvious that Garrity protects a private employee, interviewed by her private employer, when the employer is cooperating with DOJ in a criminal investigation.

Generally speaking, if a private employer compels an employee to sit down for an interview into wrongdoing, the same protections do not apply because the government is not threatening to fire the employee if the employee refuses to answer questions.

This takes us into the gray area of companies that are cooperating with DOJ. A company that seeks cooperation credit from DOJ may take some level of direction from the government about who to interview. Is that interview the company’s interview (no Garrity rights) or is it the government’s interview (Garrity rights)?

A few years ago, there was a decision in the Southern District of New York, finding that the Garrity rule “applies with equal vigor to private conduct where the actions of a private employer in obtaining statements are ‘fairly attributable to the government,’” that is, when “there is a sufficiently close nexus between the state and the challenged action.” United States v. Connolly, No. 16 CR. 0370 (CM), 2019 WL 2120523, at *10 (S.D.N.Y. May 2, 2019) (quoting first United States v. Stein, 541 F.3d 130, 152 n.11 (2d Cir. 2008); Blum v. Yaretsky, 457 U.S. 991, 1004 (1982)).

The Connolly standard is high. The defendant had to show that the government directed or “engineered” the employer’s interview of the witness and that the employee was coerced in the Garrity sense of “submit to the interview or be fired.” Under the Connolly standard, if the government effectively “outsources” its investigation to a private company, then the statements of a witness cannot be used against him in a criminal case.

And the very fact-dependent question becomes: When is DOJ outsourcing its investigation versus simply obtaining a company’s cooperation by receiving reports about the company’s internal investigation?

The Cognizant Investigation

In the Cognizant case, the company conducted an internal investigation and interviewed both the President and CLO. The company told DOJ what the President and CLO had told company counsel. Procedurally, the President and CLO are trying to win a motion to suppress their statements as violating their Fifth Amendment rights. To win a motion to suppress, the CLO and President must prove that the government outsourced its investigation to Cognizant.

There was no doubt that Cognizant had cooperated with the government. The question was how much. Did it rise to the level of “outsourcing”?

In a September 2020 decision, the court ordered Cognizant to disclose to the defendants certain communications and documents that were relevant to the “outsourcing” inquiry. For example, Cognizant had to turn over emails with DOJ about searching for documents, communications between Cognizant and DOJ where DOJ gave “guidance or instructions of any kind . . as to the timing of, substance of, or participants in CTS [Cognizant] and/or government interviews, including notes, questions, or talking points provided to CTS to be used in connection with CTS interviews,” and communications “from CTS encouraging or compelling or otherwise addressing employee cooperation with or participation in such investigations.”

In December 2022, after receiving (and fighting over) this discovery, the defendants filed motions to suppress based on the documents produced by Cognizant. (The wheels of justice do indeed turn slowly.) The two defendants then filed about 150 pages of briefing to argue that DOJ had “engineered” their interviews and that the statements made by them should be suppressed.

I’d love to summarize all 150 pages here but client work beckons.

Here are a few quotes from the CLO’s motion to suppress that summarizes the evidence. Keep in mind that this is just one side of the story:

  • “[I]n close coordination with the Government, and often at its specific request, encouragement or direction, Cognizant and its counsel insisted on employees’ cooperation with the investigation, including [the CLO’s] August 28, 2016 and September 23, 2016 interviews.”
  • Cognizant and its counsel “were guided by the Government with regard to the timing and substance of the interviews they performed.”
  • Cognizant “provided the Government with detailed updates, including witness interview readouts, credibility assessments, and summaries of key documents.”
  • Cognizant “seized evidence and conducted forensic analyses addressed to evidentiary and related concerns of the Government.
  • Cognizant “sought to identify and address defenses to the criminal case against the Defendants that the Company and its counsel encouraged the Government to bring.”

The President and CLO asked for an evidentiary hearing because the record showed that many of the communications between DOJ and the company were oral, so they needed to question witnesses about what happened during calls.

The court held an evidentiary hearing on the Garrity issues last week and ordered supplemental briefing by both sides next month. Those briefs will outline the new evidence from the hearing. We can then expect the court to issue a ruling on whether the President and CLO’s statements during their interviews must be suppressed.

Did the Company Do Something Wrong?

Nope. Cognizant did what it needed to do to protect itself during the investigation. There’s nothing wrong with a company taking direction from DOJ to conduct its internal investigation. The role of outside counsel to the company is to protect the company and not to protect the individual employees who may incriminate themselves during witness interviews.

Of course, the company has an interest in assisting DOJ and helping DOJ make its case against the President and CLO. The usual narrative is that (a) nothing illegal happened, but (b) if it did happen, then it was the fault of some “rogue” actors within the company, so (c) don’t blame the company. Cognizant’s effort to convince DOJ not to indict the company is vastly improved if the company can help DOJ prove its case against the “rogue actors.”

All in all, this is an important case. As DOJ continues to push for more cooperation from companies, it will find itself potentially less likely to be able to use the evidence it obtains from those companies. It’s doubtful that DOJ will ever stop encouraging cooperation since it’s a valuable investigative tool. But DOJ will no doubt learn to be much more subtle about what it tells companies to do during an investigation–to avoid the accusation that it is “outsourcing” its investigation.

Stay tuned!

Published by Kropf Moseley

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