In October, Deputy Attorney General (DAG) Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). Her remarks reframed a discussion about the uses of, reasons for and perceptions on independent monitors and monitorships. I asked Affiliated Monitors Inc. (AMI) founder Vin DiCianni for his thoughts around the remarks on monitors. He said, “For Affiliated Monitors this refreshed approach by DAG Monaco highlights the seriousness which businesses must place on the investment in their programs and in addressing what has for some been a negative experience with a monitor. For those who might be the subject of a monitorship, DAG Monaco recognized that the negativity that has sometimes surrounded monitorships as being punitive, should be seen in a different light bringing value, pointing a way forward and as a solution which has had great success in resolving matters.”
Monaco’s remarks should be studied by every compliance professional as they portend a very large change in the way the Department of Justice (DOJ) will utilize monitors going forward. Over this podcast series, sponsored by AMI, we have considered why DAG Monaco’s remarks herald a new era for monitorships from a variety of perspectives. Bethany Hengsbach discussed this change in monitorships from the white-collar enforcement and defense perspective. Mikhail Reider-Gordon looked at global aspects of the new DOJ monitor’s focus. Cristina Revelo discussed how ethics and compliance (E&C) assessments help drive more compliant companies. Jesse Caplan, Managing Director of Corporate Oversight, brought his views on the twin topics of antitrust and healthcare compliance. We conclude the series in Part 5, with AMI founder Vin DiCianni who takes a look down the road where monitorships are going in 2022 and beyond.
DiCianni heard a couple of different things in the Monaco Speech as they related to monitors. First, monitoring now has been around for quite some time. The DOJ used it historically with much greater frequency under prior administrations. DiCianni believes, “It works, so why not go back to a sanction that can help companies improve? And when you think about it, that’s what a monitorship is. It’s allowing the entity to stay in business, you know, to remain viable through, an independent monitor.” The Monaco Speech simply recognized the use of monitorships is a very good tool for DOJ to use.
Second, the Monaco Speech recognized companies are “perhaps becoming a little bit more lax about compliance, notwithstanding the DOJ guidance that has come out over the years.” DiCianni believes the Monaco Speech reinvigorated the point that companies need to go back and look at their compliance programs. Yet the reality is that it is sometimes hard for a company to make that type of dispassionate analysis. An independent monitor can assist in that process by looking at, for instance, your E&C program and controls around compliance.
Another key insight from the Monaco Speech was that going forward monitors would not be viewed as punitive, and they would not act as prosecutors. Here DiCianni noted, “I think the evolution of monitoring, and it’s an evolution and it’s continuing to evolve, has included consideration that the monitor is not simply an arm of the government.” He believes that the government saying to the monitor, “be a mentor, tell them how to fix them. You’ve seen it, compare it to other companies.” Once the settlement agreement is in place, “the whole notion is let’s fix this. I think that that’s crucial to this whole notion of how monitorships have evolved, because it’s no longer just, you know, a check the box. Are they doing this, doing that now it’s make recommendations on improvement and let’s see if the company make those changes.”
We considered the types of monitors and the types of skills a monitorship needs. It all begins with the settlement agreement, whether it is a Deferred Prosecution Agreement (DPA) or other form of resolution. A monitor must have the necessary skills to be able to look at things like business development, so they can understand how a company is going after business? Another growing area is in data analytics, as sometimes the monitorship is driven by data. This could require the monitor to have a data analytics team that can analyze test and look at data in various ways. Sometimes you do need forensic accounting. Sometimes you need an expert in healthcare when the monitorship is dealing with issues such as coding and billing. The AMI approach is to “shape each monitorship to make sure that we have a team that has the various perspectives, what would the government be looking for, but equally importantly how can this be helpful to the entity? Those are the most successful monitorships that we have engaged in. I think that having that broader perspective as you approach a monitorship is crucial.”
I concluded by asking DiCianni where he saw monitors going down the road. DiCianni believes that the use of monitors will increase, in many different areas such as different non-governmental groups and agencies, federal government agencies, state, and municipal agencies. For instance, AMI works with attorney inspector generals, the World Bank and other organizations. They will continue to be used as a tool, as more agencies that have never used them before are starting to recognize the benefits of them. He stated, “I think monitorships are going to continue to grow. The fear that I have is the bad monitoring, where the monitor that does not understand what they are doing and does not know what type of issues to look at or the kinds of things that they should be looking at. This will give everybody a bad name in terms of monitoring.” He concluded, “if you’re going to put a monitor in place to make sure that the selection of the monitor is appropriate. But I think it’s going to be a growing opportunity for both regulators and businesses.”
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