Last year the Bureau of Competition created its own Criminal Liaison Unit (“CLU”) as part of a Commission initiative to expand its existing criminal referral program and protect the public from criminal conduct. Headed by two former DOJ Antitrust Division criminal prosecutors, the CLU works with other BC staff to identify and refer to criminal prosecutors conduct uncovered during the course of FTC investigations and litigations. While the FTC is a civil law enforcement agency, we have partnered with federal, state and local criminal law enforcers to alert them to behavior that also may violate criminal laws. Modeled on BCP’s highly successful CLU program focused on consumer fraud, BC’s CLU is committed to referring to the proper authorities the most egregious conduct we uncover in our work.
Since the formation of the CLU, the FTC has referred over a dozen cases to prosecutors including possible criminal violations under the following statutes:
- Antitrust Crimes (15 U.S.C. §§ 1-2)
- Fraud Crimes (e.g., 18 U.S.C. §§ 1341, 1343)
- Obstruction (18 U.S.C. § 1505)
- Efforts to Influence Witness Testimony (e.g., 18 U.S.C. §§ 1512-13)
- Spoliation (18 U.S.C. § 1519)
The CLU is particularly focused on deterring companies and their executives from obstructing FTC investigations and enforcement actions and referring those companies for criminal enforcement. For example, if a company—through either its executives or lawyers—lies to the FTC during the course of our investigation or destroys responsive documents, the FTC may refer that company or particular individual for criminal investigation and, where appropriate, prosecution. As Assistant Attorney General Jonathan Kanter made clear after one individual was found guilty of obstructing an FTC investigation: “Lying to federal agencies is a crime, plain and simple.” On top of obstruction referrals, the CLU will refer a company or individual for criminal prosecution when BC staff during the course of its civil merger and non-merger investigations uncovers that the company or individual may have engaged in other criminal conduct, including violations of Section 1 and Section 2 of the Sherman Act. The CLU also instituted regular trainings for FTC staff conducted by U.S. Department of Justice prosecutors about how to identify potential criminal violations.
In the upcoming year, the FTC will work closely with criminal authorities to address potentially criminal activity associated with: (a) the use of ephemeral messaging applications after document retention obligations are triggered; and (b) efforts to discourage or influence witnesses’ cooperation with the FTC.
The FTC cannot conduct efficient and effective investigations to protect consumers, workers, and competition without relying on the integrity of people who respond to our inquiries. When people engage in obstruction, agency resources are wasted and depleted, and ultimately all Americans bear the cost. With the CLU’s increased emphasis on spotting and referring obstructive conduct to the appropriate criminal authorities, BC staff will be able to focus their energies on the important work of enforcing our antitrust laws on behalf of American consumers.