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DOJ reduces compliance role for monitors

Brian Benczkowski, Assistant Attorney General for the Criminal DivisionThe head of the Justice Department's criminal division issued new guidance to prosecutors that's likely to reduce the number of corporate settlements that require the hiring of compliance monitors.

Brian Benczkowski said prosecutors should consider the “projected costs and burdens” before imposing any requirement for a corporate monitor.

He announced the new policy during a talk Friday at NYU Law School.

He said imposing monitors should never be punitive. "It should occur only as necessary to ensure compliance with the terms of a corporate resolution and to prevent future misconduct." 

Benczkowski was confirmed in his post in July. He was a partner in Kirkland & Ellis in Washington. He had also served in other positions in the DOJ and at the Bureau of Alcohol, Tobacco, Firearms.

Only one in three corporate resolutions during the past five years involved monitors, he said. So the new approach "is consistent with our longstanding practice of imposing corporate monitors as the exception, not the rule."

A new memo replaces prior guidance (pdf) on monitors issued in 2009 by then assistant AG Lanny Breuer.

In 2008, the DOJ faced criticism after New Jersey U.S. Attorney Chris Christie was accused of appointing cronies to lucrative corporate monitorships. Breuer's guidelines required top-level DOJ review of proposed appointments.

Benczkowski's October 11 memo (pdf) to all criminal division personnel said:

In weighing the benefit of a contemplated monitorship against the potential costs, Criminal Division attorneys should consider not only the projected monetary costs to the business organization, but also whether the proposed scope of a monitor’s role is appropriately tailored to avoid unnecessary burdens to the business’s operations.

Benczkowski said Friday the DOJ will move away from hiring a single compliance expert to evaluate corporate behavior. Instead it will look for "prosecutors and supervisors [who] have a strong foundational understanding of what constitutes an effective approach to compliance."

The new guidance directs prosecutors to consider whether different corporate leadership or a new "compliance environment" has already reduced the chances of another violation.


Richard L. Cassin is the publisher and editor of the FCPA Blog.