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The US Department of Justice may axe an important tool used to ensure companies that have broken the law do not do so again: monitors who continue to scrutinise corporate conduct after criminal cases have been resolved.
The move is part of an effort to loosen corporate enforcement policies, including for companies that already accepted monitors as a condition of government settlements, according to people familiar with department leadership’s thinking. The DoJ declined to comment.
US defence contractor Raytheon agreed in October to pay more than $950mn to defer prosecution on charges of foreign bribery and overbilling the Pentagon. A three-year monitorship it agreed to under the deal should have already started but has yet to begin as prosecutors review how to proceed, according to a person familiar with the matter. Raytheon did not respond to a request for comment.
In another case, the justice department allowed Swiss commodity trader Glencore, which pleaded guilty to foreign bribery charges in 2022, to end its monitorship 15 months early.
Monitorships began to proliferate with the wave of corporate prosecutions in the early 2000s, such as the WorldCom and Enron cases, and over the years have become a routine element of corporate criminal resolutions. The terms require companies to retain an outside firm, usually a law firm or consultancy, and allow them to review internal records or talk to employees at will. They investigate apparent violations, ensure compliance with their plea agreements and report their findings to the courts or government.
“If you have a company that’s been engaged in severe and pervasive misconduct, the risk is that they won’t fix it. And you won’t know they didn’t fix it, and that they could do it again,” said Veronica Root Martinez, a Duke University law professor.
The high fees and steady pay have been a boon to law firms, who often employ former prosecutors to do the work. But they have been a thorn in the side of corporate defendants, who find them intrusive and costly.
“A priority for the DoJ is to re-evaluate all ongoing criminal division monitorships — and to decide what to do across the board,” said a defence lawyer familiar with the department’s review. “Potential options include eliminating monitorships, paring them back, or having the DoJ supervise them more closely.”
The review comes as President Donald Trump’s DoJ appointees undo the crackdown unleashed by the Biden administration on white collar crime, disbanding task forces focused on cryptocurrency and sanctions violations enforcement to redirect resources towards immigration and cross-border criminal organisations.
In one of his boldest measures since returning to the White House, Trump in February halted the enforcement of the 1977 Foreign Corrupt Practices Act, which prohibits bribery of foreign officials. A number of monitorships were included in resolutions of FCPA cases.
Eliminating monitors would mark a sharp break from the Biden administration’s DoJ, which used them often and in some of its most high- profile cases, such as the plea agreement it struck in 2023 with Binance, then the world’s biggest cryptocurrency exchange, and its founder Changpeng Zhao.
“Some of these entities that [could be] getting relief from the monitorship are probably not the kind that we trust,” said another person familiar with the matter. “But this is a transactional government, everything’s for sale”.
Binance pleaded guilty to criminal charges related to money laundering and breaching international financial sanctions, agreeing to pay US authorities more than $4.3bn in penalties. It allowed funds to flow to terrorists, child abusers and cybercriminals, and nearly $900mn in prohibited transactions between users in the US and Iran, according to the US.
The crypto exchange asked the US Treasury to end its monitorship — separate to that of the DoJ — after Trump’s return to office, said one person familiar with the matter.
In a prepared statement, Binance said having two monitors was “unprecedented, inefficient, and overburdensome — and not something envisaged when we negotiated the resolutions with the government agencies”. The Treasury department did not immediately respond to a request for comment.
In Glencore’s case, the DoJ last month cut short a monitorship the company had agreed to as part of a $1.1bn plea agreement, admitting it bribed officials throughout Africa and Latin America for access to oil tenders, and conspired to manipulate benchmarks for fuel oil products.
“The Government has assessed the facts and circumstances of the case and determined to exercise the Government’s sole discretion under the Plea Agreement to terminate the monitorship early,” the DoJ said in a court filing last month.
An all-staff email from Glencore chief executive Gary Nagle sent on March 20, and seen by the Financial Times, said: “The DOJ are of the view that the monitorships are no longer necessary as they are confident that the Company will continue with these efforts and meet its obligations under the resolutions.”
Glencore said in a statement that it had made “significant progress” over the past year in enhancing its compliance programme.
Meanwhile, the DoJ has retained monitors in other cases such as Canada’s TD Bank, which last year pleaded guilty to laundering money for drug traffickers, according to a person familiar with the matter. TD declined to comment.
https://www.ft.com/content/551704ce-f9da-4f5c-9434-a413c3100f15
