Justice Adopts Corporate Monitoring Policy.

AuthorMiller, Brian D.
PositionEthics Corner

In an Oct. 11 memorandum, "Selection of Monitors in Criminal Division Matters," Assistant Attorney General Brian A. Benczkowski provided updated guidance on how the Department of Justice will monitor corporations that may have engaged in misconduct.

"Where a corporation's compliance program and controls are demonstrated to be effective and appropriately resourced at the time of resolution, a monitor will likely not be necessary," he said in the memo.

In other words, if companies do not want a corporate monitor they need to have a fully staffed and effective compliance program with effective controls in place. The company needs to demonstrate this at the time of resolution of the issue that concerned the department--which makes sense, because the business would not be in this situation if its compliance program was effective in the first place.

Reinvigorating compliance programs and bolstering system controls are not only good things to do, but under this new policy, they may allow a company to dodge the bullet of having a monitor appointed. The thinking is that a reinforced compliance program and fortified controls will prevent the company from getting into trouble again. Compliance is the ultimate goal. The Justice Department does not want to lose sight of the big picture here: preventing bad behavior in the first place.

Ultimately, robust compliance programs, full-bodied oversight of high-risk areas, solid program controls, strong mechanisms for internal reviews and reporting, effective investigatory policies and procedures, and energetic compliance officers will benefit corporations and the federal agencies that contract with them.

The appointment of monitors has increased in recent years. HSBC, General Motors, Deutsche Bank and others have had them, as have many smaller and lesser-known companies.

Curtailing this practice, the Benczkowski memo states that the "imposition of a monitor will not be necessary in many corporate criminal resolutions."

In remarks at a recent NYU School of Law conference, Benczkowski said: "Our approach to the new policy began with the foundational principle that the imposition of a corporate monitor is never meant to be punitive. It should occur only as necessary to ensure compliance with the terms of a corporate resolution and to prevent future misconduct. That approach is consistent with our longstanding practice of imposing corporate monitors as the exception, not the rule."

Benczkowski's memo also...

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