This week, in a podcast series sponsored by Affiliated Monitors, Inc. (AMI), I visit with Vincent DiCianni, founder and President of AMI, and Eric Feldman, Senior Vice President of AMI. We look at the Department of Justice (DOJ) announcements over the past year and back to the FCPA Corporate Enforcement Policy, announced in November 2017, to consider what strategies companies can use based upon these documents. Over the next five podcasts we will explore what companies can do both internally and externally to incorporate the Benczkowski Memo (the “Memo”) and other DOJ guidance into their organizations, show how to use the Memo as both a sword and a shield and the benefits of using a third-party to fulfill the compliance mandate. In Episode 1, we introduce the Memo and new DOJ announcements over the past year and what they mean for the compliance practitioner.

We began with an overview of the Benczkowski Memo and Feldman observed that its scope is far beyond simply monitor selection. Regarding monitor selection much of what the Memo said was not new but an articulation in writing of the ongoing process. Yet there were additions to the process which Feldman believes provide some direct guidance for the compliance practitioner. Moreover, it starts from the premise that a monitor is only going to be appointed in those situations where it is absolutely necessary; using terminology that the criminal division should favor the imposition of a monitor only when there is a demonstrated need for the monitor and clear benefit to be derived from a monitorship.

The Memo goes on to provide some detail on what those situations might be going forward. There are two broad considerations the Memo identifies. The first is the potential benefits that employing a monitor will bring for the corporation and the public. This considers the benefits of a monitor. The second consideration is the cost of the monitor and the impact of the monitor on the operations of a corporation.

The Memo also memorialized what Feldman believes has been internal DOJ practices around monitor selection. Now, within 20 days, the DOJ must review a potential monitor’s qualifications, including obtaining a written certification that there is no conflict of interest present with the proposed monitor candidate. The DOJ will continue to consider of each candidates background, education, training mad professional experience, in other words all of those things that you would expect DOJ to consider in the monitor selection process. The Memo spells out very clearly that the DOJ can select from the three candidates proposed by the company or they can evaluate alternative candidates. There is also the establishment of a new selection process with a standing committee at the DOJ rather than just the Deputy Attorney General to make the final decision based on the recommendation of the prosecutors as to who will be the final monitor candidate.

Feldman see the Memo as an extremely positive force for not only corporate compliance programs but also the compliance practitioner. He also sees the evolutionary scope of what the DOJ has been moving towards, as far back as the 2012 FCPA Guidance, when he stated, “First, I think they’re listening to companies which have been complaining about the cost and adverse impact in some cases of monitors. And that’s important because there are some horrendous examples out there.” Yet, he also sees this process as an “evolution of thinking about the positive impact that a monitor can have.” The Memo  highlights the objective of creating a stronger ethics and compliance program and remediating controls as one of the considerations for whether a monitor is necessary or not. The Memo provides a roadmap for a company to avoid a monitor.

Join us tomorrow when we explore what companies can do internally with this information.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors,