CORPORATE CRIME REPORTER
Powell
Goldstein’s Burby Says Justice Department Will Move on Deferred Prosecution
Guidelines
22 Corporate Crime Reporter 7, February 16, 2008
The Justice Department currently has control over when and how to settle corporate
crime cases with deferred prosecution agreements.
But legislation introduced last month by Congressman Frank Pallone (D-New Jersey) would shift much of that control to the federal courts.
Powell Goldstein partner R. Joseph Burby predicts that the Justice Department will issue guidelines to address the issues raised by Pallone.
The legislation would require judicial approval of deferred prosecution agreements. If monitors are to be chosen, they would be chosen not by the Justice Department, but by the federal courts. And the courts would have authority to determine whether or not the agreement had been violated.
Burby, a former federal prosecutor, says that while he favors some judicial control over deferred prosecution agreements and monitorship, he doesn’t believe that the Justice Department will ever agree to giving up its current authority to the courts.
“From the defense perspective, I favor judicial oversight,” Burby told Corporate Crime Reporter in an interview earlier this week. “It’s helpful for courts to be more involved in deferred prosecution agreements and in selecting corporate monitors. And as a citizen, it’s important that this process be above any sort of charge of partisanship, any sort of charge of political influence. As long as there are no standards for selecting monitors, and no judicial oversight, you are susceptible to those charges.”
The whole controversy over the deferred prosecution agreements grew out of a case in New Jersey involving Zimmer Holdings, a medical supply company based in Indiana.
Former Attorney General John Ashcroft’s firm was selected as monitor through a no-bid process to monitor the company for 18 months.
Ashcroft’s firm stands to make as much as $52 million from the contract.
And unlike most other deferred prosecution agreements, Zimmer was not required to admit wrongdoing.
“I
don’t see how anyone could look at the situation in New Jersey and not
believe that there is at least the potential for political favoritism,”
Burby said. “You just invite that criticism. The Justice Department does
not need that at this point.”
“I do think it was interesting that the company was not required to make
admissions,” Burby said. “But actually it was the selection of the
monitors for all five of the orthopedic device makers and how the monitors were
selected that triggered the controversy. They were all former U.S. Attorneys.
There was the former Attorney General. And so, without question, that has motivated
this legislation and the controversy over monitors – how they are selected,
how they are paid.”
Burby said he doesn’t believe that the Justice Department is going to agree that judges be given the power to approve deferred prosecution agreements, appoint monitors and approve monitors, or decide when deferred prosecution agreements have been breached.
“I don’t see the Justice Department delegating those decisions to a judge,” he said. “The Justice Department will do just enough to take the critical eye off them on this issue. But the Department will not nearly go as far as the proposed legislation.”
[For a complete transcript of the Interview with R. Joseph Burby see 22 Corporate Crime Reporter 7(10), February 18, 2008, print edition only.]
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