Legal News

New Jersey?s Monitorgate: What?s the Big Deal?

By Dan Slater

After reading yesterday and today’s reports on former AG John Ashcroft’s decision to appear at a House hearing to discuss his lucrative monitorship of Zimmer Holdings, a medical device company, our thoughts returned to several recent conversations we’ve had with former prosecutors about the controversy surrounding monitorship agreements.

Ashcroft, who left public service a few years ago to start a private consulting firm, won the Zimmer contract under a settlement the company reached with federal prosecutors in New Jersey over charges that it provided kickbacks to doctors in exchange for using its products. Under a recent government policy, companies facing criminal investigation can, by signing a deferred prosecution agreement, accept such outside supervision to avoid indictment.

In this case, as in similar cases, the controversy surrounds how the contracts are given out by U.S. attorneys — here, New Jersey’s Chris Christie — who don’t themselves pay the bill. Often, contracts are given to lawyers with whom the U.S. attorney has some past relationship. So the question on Capitol Hill is whether DPA’s, which involve little, if any, judicial oversight, are becoming instruments of political patronage.

But several sources have told the Law Blog that, though the process by which monitorships are handed out could probably use a bit more regulation, the mere fact of a relationship — political or otherwise — between the assigning U.S. attorney and the recipient of the contract should not alone be cause for concern. After all, monitorships, especially ones requiring the monitor to oversee the rehabilitation of a medical device company, can be complex assignments. It makes sense that a U.S. attorney will put the job in the hands of someone he or she knows and trusts.

Law Blog readers, we know this stuff is a bit inside-baseball, but it seems to be an increasingly important issue in this post-Enron era. Do we need more monitoring of monitorships?

Full post as published by Law Blog - WSJ.com on February 27, 2008 (boomark / email).