In March 2022, Assistant Attorney General Kenneth A. Polite Jr., of the United States Department of Justice (DOJ), delivered remarks expressing a preference for utilizing integrity monitors in the future “in order to satisfy our prosecutors that a company is living up to its compliance and disclosure obligations under a non-trial resolution”. This sentiment was confirmed in a 2022 Memorandum in which Deputy Attorney General Lisa Monaco stated that the DOJ is “committed to the imposition of monitors where appropriate in corporate criminal matters.”

The Monaco Memorandum articulated some of the criteria to be considered by prosecutors when evaluating the need for an integrity monitor:

• Whether the corporation voluntarily self-reported the underlying misconduct in a manner that satisfies DOJ policy
• Whether the corporation has designed and implemented an effective compliance program and adequate internal controls to enjoin any similar misconduct in the future
• Whether the underlying criminal conduct was pervasive throughout the corporation, or if it was approved or ignored by senior management
• Whether the underlying criminal conduct involved compliance personnel being complicit with the criminal conductor failed to respond to the warning signs
• Whether those involved were disciplined or terminated for their misconduct
• Whether the underlying criminal conduct involved the exploitation of an ineffective compliance program and/or weak internal controls.

DOJ’s selection process for integrity monitors

In instances where the DOJ determines an integrity monitor is needed, the selection is based on the expertise he or she possesses to address the circumstances of each case, and the monitoring experience of the individual candidate.

The integrity monitor is often an attorney or investigator who has white-collar crime expertise and is free of any conflicts of interest with the corporation’s case or history. When a criminal investigation or proceeding has been resolved, the company must propose candidates to serve as an integrity monitor to the DOJ’s Criminal Division. This must be done within a specified time frame, usually within at least 20 business days. In the proposal, the company must also include a description of the integrity monitor candidate’s qualifications and provide confirmation that no conflict of interest exists or will exist. Once candidates are identified, the DOJ’s Criminal Division will review and recommend one candidate. They will also submit a memorandum supporting the candidate to the Criminal Division’s Committee on the Selection of Monitors. Next, the nomination will move onto the Assistant Attorney General who then may choose to interview the recommended candidates. The Assistant Attorney General will then make a recommendation to the Office of the Deputy Attorney General who will then approve or reject the proposed integrity monitor.

Attributes of effective integrity monitor

Effective integrity monitors are individuals who possess impeccable character and who will fairly and honestly report on the corporation’s compliance to the consent decree. Simultaneously, they will remain transparent and act as a partner to the corporation. The goal of an integrity monitor is to improve the corporate governance of the corporation so that a replication of its criminal conduct can be avoided. The integrity monitor should have an understanding of the corporate structures of its industry and be able to integrate compliance without needless disruption.

During the monitorship, they must continue to exercise their independence and communicate their insights and findings to both the government and corporation, whether separately or together, to determine solutions to improve the corporation’s culture of compliance. Despite the complexity of the issues that may arise throughout the monitorship, a successful monitor will be able to work with the government and corporation to attain a favorable resolution for both sides.

In conclusion, it is a certainty that DOJ supports an increase in utilizing integrity monitors for corporate criminal compliance. The Department of Justice’s expectations regarding corporate cooperation and compliance, and the consequences for failing to meet those expectations, should encourage corporations to proactively design and implement an “effective” compliance program, voluntarily disclose misconduct, and fully cooperate with any of DOJ’s investigations. Corporations now have the definitive guidance as to how prosecutors will assess corporate misconduct, and how they can avoid draconic fines and penalties. It is incumbent on monitors to assist corporations with compliance and to abate the risk of a replication of the behavior that created a problem for the corporation. A prudent selection of an integrity monitor based on his or her proven experience and impeccable integrity will lead to positive results for all.