The Expansion of Independent Monitors

The U.S. Department of Justice began using monitors in the mid-2000s in a money-laundering prosecution and public construction projects. Independent monitors were also starting to be used by a wide variety of other federal agencies, from the Department of Transportation to the Department of Defense.

AMI has provided independent monitoring services in a wide variety of situations, including regulatory matters and white-collar matters at the federal and state level. At the municipal level, there have been independent monitorships around public schools and even pension plans. AMI’s work has extended into areas as diverse as prisons, alcoholic beverage and cannabis regulatory issues.

The focus of AMI’s subject matter expertise varies according to the various levels of government. In the federal focus, there is a concentration on compliance and ethics; with state regulators, the monitorship may be more focused on businesses meeting their regulatory obligations; and with municipalities, the focus may be more around contract issues of procurement and execution.

DiCianni noted that independent monitors come “in all shapes and sizes… you could work on a gigantic international, a multinational company, a midsize or small size company, or with individuals. So, each case is very different. Each case will have a certain set of conditions or criteria for the monitor.”

He further explained that this is why a well-crafted settlement agreement is required; it will detail the rights and obligations of all parties. It might lay out the requirements for the monitor and should lay out the reporting schedule and other items or issues the parties must consider going forward.

I asked DiCianni if he could provide an example of an independent monitorship that tied all these elements together. He related that AMI acted as an independent monitor in a civil rights case out of New York City a number of years ago. Based on this work, AMI received a call from the New York State Attorney General’s office. They had a small manufacturing company on Long Island that had hired and employed all disabled people. The company got into hot water with the state EEOC function for equal employment violations. The state AG’s office was in a quandary, as it did not want to close down one of the last manufacturing companies in New York City. However, the AG had to deal with these realistic problems that the company was having with the EEOC violations.

“AMI came up with a model under which the company implemented an ethics and compliance program for the state’s EEOC. Some of the elements included a hotline, and AMI put on EEOC training for the staff and the management team. AMI then monitored the company for a period of time to ensure the solution desired by all parties was obtained.”

Another example involved a construction company that “got in trouble for some unauthorized activity on the billing under a contract. AMI was required to understand not only what had happened, but how it had occurred from the root cause standpoint. From this root cause analysis, AMI was able to detail some of the deficiencies in the company’s control and create the monitorship around those issues.” The bottom line, as DiCianni stated, is that “we’re very comfortable monitoring almost any situation because of our years of experience doing it.”

Please join me next week for Part 4 of this series as we explore the combination of independent monitors and compliance and ethics programs.

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