Legal News

On Eve of Ashcroft?s Testimony, DOJ Issues Monitor Guidelines

By Dan Slater

Are they mere window-dressing, or do they have teeth?

That’s the question that came to mind while reading this morning’s reports that the DOJ — in advance of today’s testimony by former AG John Ashcroft regarding the circumstances of a lucrative, no-bid monitoring contract awarded him by New Jersey U.S. Attorney Chris Christie — issued a set of guidelines for regulating the selection of monitors. The selection of corporate monitors, increasingly used to track companies that enter deferred-prosecution agreements, has recently become a source of controversy among those who believe that political favoritism determines which lawyers get the contracts. (Click here, here and here for past LB coverage.)

According to reports (here and here), the proposed guidelines, issued yesterday in a memorandum sent out by deputy AG Craig Morford, require that monitor appointments be approved by the deputy attorney general and that prosecutors’ offices establish committees to help pick candidates. In some cases, it might work that a company nominates a monitor over whom the government has veto power. In others cases, companies and prosecutors might agree on a monitor from among several candidates.

Justice officials didn’t include requirements for companies to disclose the amount they pay monitors. But according to the WSJ, an official said if the cost is large enough, companies would likely deem it significant financial information required to be disclosed in securities filings.

Full post as published by Law Blog - WSJ.com on March 11, 2008 (boomark / email).