House Dems Introduce Corporate Monitor Oversight Bill

On Tuesday, Reps. Bill Pascrell, Jr. (D-NJ), Frank Pallone, Jr. (D-NJ), John Conyers (D-MI), and Linda Sanchez (D-CA) introduced the "Accountability in Deferred Prosecution Act of 2008" (H.R. 6492), a bill that would regulate the use of corporate monitors in deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) between federal prosecutors and companies accused of misconduct.

POGO has been following this issue since late last year, when we learned that a U.S. attorney in New Jersey helped his former boss, ex-Attorney General John Ashcroft, obtain a very lucrative corporate monitor contract overseeing a company accused of Medicare fraud. In the intervening months, both Congress and the Justice Department have been working to improve the transparency and oversight of DPAs, NPAs and corporate monitor appointments, which have grown in popularity since 2001.

The Justice Department promulgated internal guidelines for choosing corporate monitors and, in response to a request from the House Judiciary Committee, released a batch of documents detailing its use of DPAs, NPAs and corporate monitors. It was a step in the right direction, but it wasn't good enough for Reps. Sanchez and Conyers.

The documents identified the 40 corporate monitors who have been appointed in federal corporate misconduct cases since 2000; it turns out that about three-quarters of them were former government officials--many, like Ashcroft, had worked at the Justice Department. In most cases, the compensation paid to these monitors was not disclosed. (Ashcroft's deal is estimated to be worth between $29 million and $52 million.) In addition, Conyers claimed he found an additional 12 DPAs and NPAs that were not disclosed in the documents provided by the Justice Department. All of this prompted Sanchez to remark, "There's no transparency as to how the monitors are selected. These could be very qualified people, and there could be impropriety going on. The problem is, we don't know. There's no real selection process."

This will hopefully change with the bill introduced this week. It certainly puts a high premium on transparency and judicial oversight. It would require the Justice Department to post on the web a list of pre-approved organizations and individuals from which monitors would be selected. The text of DPAs, NPAs and monitor fee schedules would also be posted on the web. Court approval would be required for all DPAs, NPAs and monitor appointments, and the court would have to be periodically informed of the progress made toward the completion of these agreements.

POGO believes this bill imposes much-needed oversight over the process by which U.S. attorneys enter into pre-trial agreements with companies accused of wrongdoing, and will rein in prosecutors who might be tempted to use these agreements as a way to reward former bosses and co-workers. Corporate offenders should be punished for actions that harm the public, and that punishment should not provide an opportunity for cronyism.