This year is the 15thanniversary of Affiliated Monitors, Inc. (AMI). Next week I am running a five-part podcast series on the history of AMI and the sweep of history in the rise of independent monitors as well as the government’s embrace of corporate compliance and ethics programs. Yet the idea for a business centered around the role of an independent monitor was develop by AMI founder Vincent DiCianni. It is a fascinating story of how lawyers are only limited by their imaginations and how DiCianni saw a need and developed a response to that need in the founding of AMI. Yet one of the more interesting aspects of this journey has been the marriage of independent monitors and compliance and ethics programs, largely driven by the Department of Justice (DOJ) and other regulators.

DiCianni said that the evolution away from strict regulatory compliance to a more ethics-based compliance has been one of the most significant advancements in independent monitors over the history of AMI. Early on AMI had independent monitorships in the health care industry around such issues as billing and coding. From there, AMI began to address other issues such as codes of conduct and conflicts of interest. So AMI was well suited to move into a more direct ethics-based compliance independent monitorship as the first decade progressed.

In the latter part of the past decade AMI began to move into more Department of Defense (DOD) independent monitorships around suspension and debarment. Inspector Generals (IGs) in the DOD were very much focused on the ethics side of compliance in the oversight of companies which were going through the suspension and debarment process. Administratively, these IGs would use the suspension and debarment rules to have companies demonstrate they met the  requirement under the applicable Federal Acquisition Regulation (FAR) that they were presently responsible contractors. In the eyes of many IGs, presently responsible included ethical considerations.

These ethical considerations would include such issues as whether a company had installed a code of ethics, was there training on a compliance and ethics program, was there a disciplinary process and investigative tools that included a reporting hotline? DiCianni said “we were beginning to see lots of different agencies picking up on the elements of a compliance and ethics program. It was then picked up by other government officials and other federal regulators. Now it has become the norm”. This led to quite a bit of monitoring not just focused on legal or regulatory compliance, but all of the elements of ethics and codes of ethics and compliance requirements.

DiCianni said that over the life of AMI there have been two Memos released by the Department of Justice (DOJ) which have directly impacted the selection of independent monitors and their application. The first was the Morford Memo, released in 2008. In this Memo, the selection criteria for independent monitors was first laid out, including the need for subject matter expertise and independence and integrity of the monitor.

The second was the Benczkowski Memo, released in 2018, which discusses limiting the use of monitors to certain situations where they might be warranted. However, it does give a company the incentive to go out and evaluate their own ethics and compliance programs, compelling them to strengthen those programs so that if they are ever confronted with an investigation or a self-disclosure to the DOJ, the company can demonstrate it has a strong compliance and ethics program and perhaps get special consideration.

As DiCianni noted, this type of proactive work is “really a good part of our work today. Helping companies evaluate their programs to see if they have a certain weaknesses.” DiCianni sees Benczkowski Memo as another impetus for AMI “to get out there and let people and let companies know that you don’t have to do it on your own. There are entities out there that can help them strengthen their programs.” He concluded by stating, “I think each memo in its own way had some impact on us.”

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© Thomas R. Fox, 2019