Dow Jones Risk Journal: New DOJ Policy on Monitors

On May 12, Matthew Galeotti, head of the Criminal Division at DOJ, announced changes to the Division’s monitor selection policy, remarking that “you can expect to see fewer of them going forward.”  DOJ released a memo the same day, “Memorandum on Selection of Monitors in Criminal Division Matters,” which focuses on two areas: ”clarifying the factors that prosecutors must consider when determining whether a monitor is appropriate and how those factors should be applied,” and “ensuring that when a monitor is necessary, prosecutors appropriately tailor and scope the monitor’s review and mandate to address the risk of recurrence of the underlying criminal conduct and to reduce unnecessary costs.“

On May 13, I spoke with Max Fillion, a reporter at Dow Jones Risk Journal, about the potential impact of the changes. Below is an excerpt from Max’s article, “Justice Department Calls for Caps on Corporate Monitorship Costs”:

Steve Solow, a managing director at Affiliated Monitors who served as a monitor for Carnival Cruise Lines following a 2016 guilty plea in which the company paid $40 million for environmental crimes, said he believes the effect of the changes will depend on the prosecutors involved in negotiating monitorships.

“I was very fortunate that the two prosecutors who brought the Carnival case remained very involved,” Solow said. “This policy very much makes that a matter of broader policy which I think is good. There was a tendency for a prosecutor to prosecute a case, get a monitor and go on to their next case.”

Continuous involvement by prosecutors could be especially helpful in situations where a company isn’t cooperating or a monitor isn’t effective, Solow added. He also agreed with the new cost-cutting policies but said a monitor should be allowed to revise and adapt their approach as they conduct their work.

“To spend money on a monitor and not get at the root causes is probably a foolish way of proceeding,” Solow said. “There has to be a willingness on the part of the government to recognize that it’s not a bad thing in every instance if the scope or the direction of the monitorship changes.”

Subscribers to Dow Jones Risk Journal can read the article in full here: Justice Department Calls for Caps on Corporate Monitorship Costs