Congresswoman Plans Bill to Regulate Corporate Monitors

Corporate Compliance

Congresswoman Plans Bill to Regulate Corporate Monitors

Posted Jul 15, 2008, 08:02 am CDT
By Debra Cassens Weiss

U.S. Rep. Linda Sanchez thinks new Justice Department guidelines regulating the selection of corporate monitors are inadequate.

The Democrat from California plans to introduce reform legislation this week to regulate the hiring process for monitors scrutinizing companies targeted by the Justice Department for wrongdoing, Legal Times reports. The new legislation will borrow from a previous bill “and add in adequate safeguards," Sanchez said last week.

"There's no transparency in how the monitors are selected for these often-lucrative contracts," Sanchez told Legal Times. "There's no reporting requirement. You have a potential for abuse there."

The previous bill, by U.S. Rep. Frank Pallone, D-N.J., would have required court approval of the monitor contracts and set fee schedules for monitors. The Justice Department guidelines call for internal vetting of proposed corporate monitors, with the final say going to the deputy attorney general.

Justice Department figures show 23 former prosecutors were selected to monitor companies seeking to avoid prosecution. Corporate monitors can earn as much as $1,000 an hour from companies they are hired to scrutinize under deferred prosecution agreements, leading some critics to complain of “sweetheart deals.” Former Attorney General John Ashcroft was among the appointees.

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