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In October, Deputy Attorney General (DAG) Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). Her remarks reframed a discussion about the uses of, reasons for and perceptions on independent monitors and monitorships. I asked Affiliated Monitors Inc. (AMI) founder Vin DiCianni for his thoughts around the remarks on monitors. He said, “For Affiliated Monitors this refreshed approach by DAG Monaco highlights the seriousness which businesses must place on the investment in their programs and in addressing what has for some been a negative experience with a monitor. For those who might be the subject of a monitorship, DAG Monaco recognized that the negativity that has sometimes surrounded monitorships as being punitive, should be seen in a different light bringing value, pointing a way forward and as a solution which has had great success in resolving matters.”
Monaco’s remarks should be studied by every compliance professional as they portend a very large change in the way the Department of Justice (DOJ) will utilize monitors going forward. Over this podcast series, sponsored by AMI, we will consider why DAG Monaco’s remarks herald a new era for monitorships. We will consider Monaco’s remarks from a variety of perspectives. Bethany Hengsbach will consider this change in monitorships from the white-collar enforcement and defense perspective. Mikhail Reider-Gordon will look at global aspects of the new DOJ monitor’s focus. Cristina Revelo will discuss how ethics and compliance (E&C) assessments help drive more compliant companies. Jesse Caplan brings his views on the twin topics of antitrust and healthcare compliance. We will conclude the series with Vin DiCianni who will look at where monitorships are going in 2022 and beyond. In Part 2, Mikhail Reider-Gordon, Managing Director of Institutional Ethics & Integrity, will look at global aspects of the new DOJ monitor’s focus.
Mikhail said the change in DOJ focus and orientation actually started in late 2020 when then Acting Assistant Attorney General Brian Rabbit said in a speech, “notably many of DOJ, corporate resolutions in 2020 included coordination with one or more foreign enforcement authorities and increasingly important aspect of DOJ his work.” Mikhail believes that since that time, it is reasonable to conclude that US regulators have progressively coordinated with foreign enforcement authorities to resolve multi-jurisdictional corruption and money laundering cases and other white-collar crimes. She added, “I would even say the cross jurisdictional approach has really gained traction in 2021.”
Next, she pointed to a recent interview of John Carlin in the Financial Times. In this article, Carlin drew particular attention to two types of companies. The first, those entities which violated their Deferred Prosecution Agreements (DPAs) or other settlement agreements and the second are those companies failing to invest in compliance systems that are now in all practicality a mandatory business and legal practice. Taking Carlin’s FT interview, Rabbit’s 2020 speech and the Monaco Speech and the renewed focus on corporate malfeasance US legislation recently passed or proposed, we see a DOJ which is fully focused on fighting the international scourge of corruption. Finally, if the Biden Administration announcement raising corruption to a national security concern.
Mikhail highlighted one key outcome from the Monaco Speech and related DOJ announcements. It is that companies can take proactive steps right now to address these DOJ concerns. She said that businesses “may want to take a hard look at their corporate compliance programs and assess just how robust and effective they truly are. If you are a corporation currently under a DPA and a monitor was not imposed, but you aren’t certain how well you’re meeting the terms of your settlement agreement really well. You know, now may be the time to seek out an independent assessment.”
We concluded by circling back to two words from the Monaco Speech, ‘independent’ and ‘integrity’. I asked Mikhail why she thought those two words were so significant. She said, “one thing that when we talk about independence is that it indicates that the monitor is a neutral, impartial evaluator. Whether it is a law firm or consultancy that offers a range of services, your firm cannot be thinking down the road, we can sell them more services. So, let’s handle them gently, lightly. Let’s not tell them the truth. We don’t want to offend them. We want them to hire us later for all this other work. You can’t have independence that way.” Your firm must be truly independent.
We then turned to the word ‘integrity’, which Mikhail observed “is at the core, all of compliance and ethics.” Unfortunately, we seemed to have moved away from this concept of integrity somewhat. Mikhail noted, “we don’t focus enough anymore on the philosophy that underpins the concept of integrity and ethics. You can have all the transparency in the world, but if you don’t have integrity what you do fails. The concept of independence and understanding we do this; this is the right thing to do that this is better for society. This is the spirit of the law. It is embracing integrity, it’s not compromising integrity, it’s not phoning it in if you will.”
Even the G20 is moving in this direction, dovetailing in concert with the Biden administration. In November, the G20 issued their anti-corruption action plan for 2022 through 2024. The G20 has made clear, now more than ever, the international fight against corruption requires increased international cooperation and renewed global commitment. Here Mikhail noted they are “really calling for a spirit of zero tolerance of corruption.”