The Wall Street Journal-20080111-Politics - Economics- Justice Department May Steer How Monitors Are Selected
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Politics & Economics: Justice Department May Steer How Monitors Are Selected
The Justice Department said it is considering issuing guidelines to govern the selection of monitors appointed to track companies that enter deferred-prosecution agreements.
The department said the issue has been under study for more than a year as prosecutors have increased use of such agreements, which enable companies to avoid criminal charges. In that time, the department has sought input from private attorneys, company lawyers and others inside and outside the department about devising rules.
Some Democratic lawmakers in New Jersey raised questions about the selection of monitors in recent months after the top federal prosecutor there selected several former Justice Department colleagues and the company of his former boss, former Attorney General John Ashcroft, to monitor five surgical-implant companies that had been investigated in a federal probe. The companies agreed to improve compliance procedures to avoid prosecution for allegedly paying financial kickbacks to surgeons.
Justice officials said the internal discussion was unrelated to questions about the appointment of the former attorney general's company, Ashcroft Group LLC. Peter Carr, a department spokesman, said there was no investigation of the Ashcroft appointment.
The Newark Star-Ledger newspaper and other organizations reported that one of the companies, Zimmer Holdings Inc., of Warsaw, Ind., revealed in securities filings that hiring Mr. Ashcroft's company for monitoring would cost as much as $52 million over 18 months. The New York Times yesterday reported on the department's deliberations about guidelines.
An Ashcroft spokesman defended the company's monitoring work, citing the former attorney general's leadership of the Justice Department.
"The Ashcroft Group has the legal, business and management experience and an unparalleled reputation for integrity required for this type of complex corporate-governance assignment," said Mark Corallo, a former Justice spokesman under Mr. Ashcroft who now runs Corallo Media Strategies LLC, a Washington public-relations firm.
Rep. Bill Pascrell (D., N.J.) is among lawmakers asking for a congressional probe and hearings into the department's selection of monitors, arguing that it would help ensure "that no abuse of power can occur unchecked."
Yesterday, the House and Senate judiciary committees asked the Justice Department for information regarding deferred prosecution agreements and a list of all monitoring contracts.
