Justice Manual § 9-28.1700

A. General Principle: Independent compliance monitors (monitors) can be an effective means of reducing the risk of further corporate misconduct and rectifying compliance lapses identified during a corporate criminal investigation. Prosecutors should carefully assess the need for the imposition of a monitor on a case-by-case basis, without applying any presumption for or against such imposition. Two broad considerations should guide prosecutors when assessing the need for and propriety of a monitor, and the scope and duration of any monitorship: (1) the potential benefits that employing a monitor may have for the corporation and the public, and (2) whether the costs of a monitor and its impact on the operations of a corporation (which can be calibrated by tailoring the scope and duration of a monitorship) substantially outweigh the potential benefits of a monitor. [1]

In evaluating the necessity and potential benefits of a monitor, prosecutors should consider, among other factors:

Whether the corporation voluntarily self-disclosed the underlying misconduct in a manner that satisfies the particular DOJ component’s voluntary self-disclosure policy;

Whether, at the time of the resolution and after a thorough risk assessment, the corporation has implemented an effective compliance program and sufficient internal controls to detect and prevent similar misconduct in the future;

Whether, at the time of the resolution, the corporation has adequately tested its compliance program and internal controls to demonstrate that they would likely detect and prevent similar misconduct in the future;

Whether the underlying criminal conduct was long-lasting or pervasive across the business organization or was approved, facilitated, or ignored by senior management, executives, or directors (including by means of a corporate culture that tolerated risky behavior or misconduct, or did not encourage open discussion and reporting of possible risks and concerns);

Whether the underlying criminal conduct involved the exploitation of an inadequate compliance program or system of internal controls;

Whether the underlying criminal conduct involved active participation of compliance personnel or the failure of compliance personnel to appropriately escalate or respond to red flags;

Whether the corporation took adequate investigative or remedial measures to address the underlying criminal conduct, including, where appropriate, the termination of business relationships and practices that contributed to the criminal conduct, and discipline or termination of personnel involved, including with respect to those with supervisory, management, or oversight responsibilities for the misconduct;

Whether, at the time of the resolution, the corporation’s risk profile has substantially changed, such that the risk of recurrence of the misconduct is minimal or nonexistent;

Whether the corporation faces any unique risks or compliance challenges, including with respect to the particular region or business sector in which the corporation operates or the nature of the corporation’s customers; and

Whether and the extent to which the corporation is subject to oversight from industry regulators or is receiving a monitor from another domestic or foreign enforcement authority or regulator.

B. Comment: Department attorneys should determine whether a monitor is required based on the facts and circumstances presented in each case. The factors listed in this section are intended to be illustrative of those that should be evaluated and are not an exhaustive list of potentially relevant considerations. Monitorships should not be imposed for punitive purposes. The scope of any monitorship should be appropriately tailored to address the specific issues and concerns that created the need for the monitor.

In general, the Department should favor the imposition of a monitor where there is a demonstrated need for, and clear benefit to be derived from, a monitorship. Where a corporation’s compliance program and controls are untested, ineffective, inadequately resourced, or not fully implemented at the time of a resolution, prosecutors should consider imposing a monitorship. This is particularly true if the investigation reveals that a compliance program is deficient or inadequate in numerous or significant respects. Conversely, where, at the time of a resolution, a corporation’s compliance program and controls have been fully implemented, tested and demonstrated to be effective and adequately resourced, a monitor may not be necessary.

[added March 2023]

[1] Attorneys will find helpful guidance in Memorandum from Deputy Attorney General Lisa O. Monaco, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group,” dated September 15, 2022 (Monaco Memo 2022), the Memorandum from Deputy Attorney General Lisa O. Monaco, “Corporate Crime Advisory Group and Initial Revisions to Corporate Criminal Enforcement Policies,” dated October 28, 2021 (Monaco Memo 2021). See Acting Deputy Attorney General Gary C. Grindler, “Additional Guidance on the Use of Monitors in Deferred Prosecutions and Non-Prosecution Agreements with Corporation,” May 25, 2010. Memorandum entitled “Selection and Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations,” issued by then-Acting Deputy Attorney General Craig S. Morford on March 7, 2008, as amended and supplemented by successor guidance to Department components.