Wednesday, January 16, 2008

Federal Prosecutors, Corporations, and "Monitors"

Yesterday's Washington Post had a front-page story about the use of "monitorships" by federal prosecutors. Ex-Officials Benefit From Corporate Cleanup, Wash. Post, Jan. 15, 2008.

Here's the basic model: a company seems to have engaged in shady practices. The U.S. Attorney's office investigates. At some point, instead of further investigation leading to a possible indictment, the prosecutors work out a deal with the company that the company will pay a a consultant (chosen by the prosecutors) to come inside the company and shake things up.

The lucrative arrangements are known as "monitorships," unusual contracts in which an outsider comes into a troubled company with vast power to expose corruption and change business practices. The deals allow scandal-plagued companies to avoid criminal charges -- and they give prosecutors a way to ensure businesses keep their promises and clean up abuses. But legal experts and lawmakers are expressing growing concern about inconsistency and secrecy surrounding the appointments.
The monitors hired -- with big pricetags -- are often former government officials (e.g., former Attorney General John Ashcroft), and there's no competitive bidding process.

I heard about this in a commentary by NPR analyst Daniel Schorr tonight: 'Monitorships' Smack of Favoritism for Bush Cronies, All Things Considered, Jan. 16, 2008.

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