Earlier this month, U.S. District Court Judge Rudolph Contreras held that the Department of Justice must provide Dylan Tokar, a reporter with the trade publication GIR Just Anti-Corruption, the names of individuals nominated to monitor corporations’ compliance with the Foreign Corrupt Practices Act (FCPA) along with records related to the selection process.

The Reporters Committee for Freedom of the Press filed a lawsuit on behalf of Tokar in December 2016 after the Department of Justice refused to provide records in response to a Freedom of Information (FOIA) request seeking records and information related to the Department’s selection process for corporate compliance monitors in FCPA cases.

In 2008, the Department launched an internal inquiry into its selection process after then-U.S. Attorney Chris Christie approved a contract reportedly worth between $28 million and $52 million for his former boss and former U.S. Attorney General John Ashcroft to serve as the compliance monitor for a corporation that had settled with the Department.

Six weeks after filing the FOIA lawsuit, the Department provided Tokar with a chart that contained the redacted names of monitor candidates who were nominated but not selected.

The Department claimed the redactions were justified under exemptions for information that would constitute an invasion of privacy.

In his decision, Judge Contreras held that the Department had improperly applied these redactions to the information Tokar requested.

The Judge held that while the corporate monitor candidates have some right to privacy, the public’s interest in understanding how the corporate monitor selection process works outweighs that privacy interest.

“The companies choose three candidates that the Justice Department can pick from,” Tokar told Corporate Crime Reporter in an interview last week. “When you tell people outside the white collar world, they are astounded. A monitor is supposed to be someone looking over a corporation insuring they are meeting the requirements laid out in a corporate settlement agreement. It raises some questions about how aggressive a monitor is going to be if it is the corporation choosing the candidate pool in the first place.”

“The company gets to choose three monitor candidates. And the Department chooses who is going to be the monitor. If the Department of Justice decides that all three of the candidates are just unqualified, or even if one of them is unqualified, they can go back to the corporation and say – we want other candidates.”

Do we know how many FCPA monitors there have been?

“There is no public list. The Department of Justice will release the names of individuals selected to serve as monitors, if you FOIA them. But there is not a public list. And they don’t make it particularly easy for journalists or anyone in the public to get that information. Global Investigations Review over time has submitted FOIAs for that information. And we have a list that is available for our subscribers.”

“There have been something like 45 FCPA monitors selected over time. When you ask the Department for this information, they will tell you who was selected lead monitor. In any situation where a monitor is appointed, often times that monitor will have their own lawyer, who is essentially another lead monitor on the case. And then they will have a team of associates or partners who will help them do the work.”

“FOIA will help you get some insight into who the figurehead of the monitorship is.”

For just FCPA, there are about 100 deferred and non prosecution FCPA agreements. Out of those, 45 had monitors. You want to see the lawyers nominated for all 45 cases that had monitors?

“We filed this FOIA for only fifteen FCPA monitor cases,” Tokar said. “It was the fifteen most recent monitor cases. We were trying not to be overly ambitious.”

“Before this case went to litigation, I was trying to figure out why the Justice Department didn’t want to release this information. And one reason is that if a lawyer is nominated to be monitor and doesn’t get it, that could be professionally embarrassing to them.”

On the other hand, they all want to be known as lawyers that made the first cut.

“Yes. You can make an equally strong counterargument that any lawyer whose name is being put forward as a final three candidate – that can be a reputation booster.”

Shouldn’t the Justice Department be choosing the monitor independently and not basing it off the recommendation of the corporate criminal?

“And there is another question there – do these monitors work? Is it just another punitive measure? Obviously, corporations don’t want them. It costs a lot of money. They don’t want to cede control to someone outside of their organization.”

“From a criminal justice standpoint, what is the value of having them? Scholars have looked at it and raised some questions about it. There is no doubt that allowing corporations to pick the monitor candidate pool has a huge impact on the stance that candidate will take if they are picked to monitor the company.” “There are other government agencies that pick monitors in a different way. You could study how they monitor differently. Some agencies just put a job posting up on a web site. And they select a monitor that way with varying degrees of input from the corporation.”

If you get the names from the FOIA, what is it going to show other than – these are candidates who are corporation friendly lawyers who work in the field?

“In the Chris Christie case, that monitorship was valued at upwards of $50 million. These monitorships are incredibly lucrative. Prosecutors have a tendency to kick these monitorships to former prosecutors. There is a cronyism allegation that keeps coming up.”

“I don’t know why the Department of Justice decided to allow the companies to pick the monitor candidates, but it could be that they were trying to distance themselves from that allegation.”

“If we look at our data for FCPA monitorships, you still see a ton of former prosecutors getting picked. And if you ask the Department of Justice questions about that, they say – we are not picking the candidates. The companies are doing this.”

“If you want to continue to evaluate this question, you have to know what pool of candidates the Department of Justice is looking at.”

“And it’s not just the fact that there are so many former prosecutors. There are only three women FCPA monitors out of the 45. And only three people of color – all men – out of 45. Diversity within the white collar bar is not great – but it is way worse when it comes to FCPA monitors.”

“Corporate counsel are looking within their professional networks to find monitor candidates. And you are getting the same people selected. The Department of Justice tries not to select the same people over and over again. But the FCPA bar in DC is pretty small. It’s not a huge community of people.”

Are there repeat monitors?

“There have been monitors who have been selected twice. A couple of law firms have had three over time. Gibson Dunn & Crutcher has had three. Miller & Chevalier has had three.”

“Miller & Chevalier got two in a short amount of time. That raised some angst in the bar. Lawyers want these gigs. If they see a law firm getting two in a short amount of time, it leads to a lot of complaining.”

Did the companies object to the names being handed over to you?

“Yes. The companies were able to submit their objections to the Department. It’s not necessarily the companies that are objecting – it’s the law firms that represented them in that matter.”

How do we know the Justice Department went to the companies and asked the companies to weigh in?

“The Department told me that. I submitted a FOIA for those objection letters. And I got them. Letters from the law firms saying – we don’t want this information released. In some cases, they cite the privacy exemption.”

“One company counsel called me up and said – I got this letter from the Department of Justice. Clarify to me what you are looking for. If you are just looking for the names of these candidates, I will just give them to you. I don’t want to have to go through all of this other documentation and decide what is a trade secret and what is not.”

Did the lawyer give you the names of the monitor candidates?

“Yes. Then the Department told me that all of the other companies had objected to the release of this information. But when we FOIAd for the objection letters, we found it wasn’t all of them. But the majority did object.”

[For the complete q/a format Interview with Dylan Tokar, see 32 Corporate Crime Reporter 16(12), Monday April 16, 2018, print edition only.]