Recent Changes from the DOJ and What They Mean for the Compliance Practitioner

Over the next five posts, I will explore what companies can do both internally and externally to incorporate the Benczkowski Memo (the Memo) and other DOJ guidance into their organizations, show how to use the Memo as both a sword and a shield and the benefits of using a third party to fulfill the compliance mandate. In today’s post, I will introduce the Memo and new DOJ announcements and what they mean for the compliance practitioner.

Overview of the Benczkowski Memo

The Memo’s scope is far beyond monitor selection alone. Regarding monitor selection, much of what the Memo said was not new, but an articulation in writing of the ongoing process. Yet there were additions to the process that provide some direct guidance for the compliance practitioner. Moreover, it starts from the premise that a monitor is only going to be appointed in those situations where it is absolutely necessary, using the phrasing that the criminal division should favor the imposition of a monitor only when there is a demonstrated need for the monitor and a clear benefit to be derived from a monitorship.

The Memo goes on to provide some detail on what those situations might be going forward. There are two broad considerations the Memo identifies: The first is the potential benefits that employing a monitor will bring for the corporation and the public. This considers the benefits of a monitor. The second consideration is the cost of the monitor and the impact of the monitor on the operations of a corporation.

The Memo also memorialized internal DOJ practices around monitor selection. Now, within 20 days, the DOJ must review a potential monitor’s qualifications, including obtaining a written certification that there is no conflict of interest present with the proposed monitor candidate. The DOJ will continue to consider each candidate’s background, education, training and professional experience – in other words, all of those things you would expect the DOJ to consider in the monitor selection process.

The Memo spells this out very clearly: The DOJ can select from the three candidates proposed by the company, or they can evaluate alternative candidates.

There is also the establishment of a new selection process with a standing committee at the DOJ (rather than just the Deputy Attorney General) to make the final decision based on the recommendation of the prosecutors as to who will be the final monitor candidate.

The Memo can be viewed as an extremely positive force for not only corporate compliance programs, but also the compliance practitioner.

The evolutionary scope of what the DOJ has been moving toward as far back as the 2012 FCPA Guidance? First, I think they’re listening to companies that have been complaining about the cost and, in some cases, the adverse impact of monitors. And that’s important, because there are some horrendous examples out there. Yet this process can also be viewed as an evolution of thinking about the positive impact a monitor can have.

The Memo highlights the objective of creating a stronger ethics and compliance program and remediating controls as one of the considerations for whether or not a monitor is necessary. The Memo provides a roadmap for a company to follow in the hope of avoiding a monitor.

Please join me next week when I explore how companies can leverage this information internally.

In case you missed the earlier installments of this ongoing series, please see the links below.

Everything You Always Wanted to Know About Monitors But Were Afraid to Ask

Part 1, Part 2, Part 3, Part 4 and Part 5

Potential Issues in Corporate Monitorships

Part 1, Part 2, Part 3, Part 4 and Part 5

Suspension and Debarment in Monitoring

Part 1, Part 2, Part 3, Part 4 and Part 5

Monitoring in the Health Care Sector

Part 1, Part 2, Part 3, Part 4 and Part 5

The Basics of Corporate Culture

Part 1, Part 2, Part 3, Part 4 and Part 5

Monitoring in an M&A Context

Part 1, Part 2, Part 3, Part 4 and Part 5

Affiliated Monitors: 15 Years of Independent Monitoring Excellence

Part 1, Part 2, Part 3, Part 4, Part 5