Jenner & Block Partner Katya Jestin on Corporate Monitors

Jenner & Block is one of a handful of corporate defense law firms to create a corporate monitorship practice. 

Katya Jestin
Partner Jenner & Block

The firm says that its lawyers “have successfully served as court or government appointed monitors of numerous global companies and organizations.” Jenner & Block lawyers have edited a book length treatise on the subject – The Guide to Monitorships (Third Edition, 2022).

And just last month, the Justice Department appointed Jenner co-managing partner Katya Jestin to be the corporate monitor in the Glencore case.

“We literally wrote the book,” Jestin told Corporate Crime Reporter in an interview last month. “The Guide to Monitorships (Third Edition). We edited it. We have two chapters in it.”

“I had never been appointed a monitor before, but we have a robust monitorship practice at Jenner. In fact, I think we were the first firm to create a monitorship practice. We are very proud of it. We think it is a differentiator in the market. We have internal policies and procedures that govern the way we approach monitorships. We take the independence of the monitor seriously. We are assiduous about working within the four corners of the resolution document. And it does fit nicely with our Investigations, Compliance, and Defense Practice.” 

“It’s all about helping our clients, or in this case the monitored entity, achieve a sustainable compliance culture.” 

Who is the client of the monitor?

“It’s an independent role. You have a monitored entity on one side and the government on the other. Your mandate is established by the resolution document. There will be the plea agreement and a resolution document that sets forth what the monitor’s role is. We are independent. Our role is governed by the terms of those resolution documents.”

But you are being paid by the monitored entity?


Could you sketch for us the role of a monitor and what your day to day job is when you are working as a monitor?

“It depends on the monitorship, but often it could have an investigative component. You may be tasked with investigating a particular part of the business or a particular subject matter. Often you are asked to assess the efficacy of a compliance program.” 

“The monitor might be tasked to evaluate the compliance program, the remediation steps taken by the company and ensure that it is effective, fit for purpose and sustainable. It’s part of the compliance journey of the monitored entity.” 

“The monitor periodically reports to the Department of Justice on the progress of the monitored entity and works with the entity to help them build something sustainable. That really does affect culture change. And that is what is dictated in the resolution document.”

Are those monitor reports generally made public?

“They are not public in my experience.”

Is the idea of a monitor like that of a probation officer, to make sure the corporation stays on the straight and narrow?

“That sounds more punitive than it should be, at least in the way we approach them. I understand why you draw that analogy. But we really do try to build on the work that the company is engaged in doing.”

“We try to work with the company in a way that is consensus driven so that they can achieve the objective of the resolution and the objective of having a sustainable compliance program that takes them into the future without having issues again.”

“We try to not think of it as a punitive measure. We see it as a constructive measure. If done right, it can be a real positive. It’s obviously a financial burden for a company. And it can tend to be disruptive. We try to be sensitive to those concerns and be as efficient as possible.” 

Does the monitor have offices in the corporate entity?

“We don’t have offices there. But you spend a lot of time with the monitored entity. We conduct interviews, we evaluate the compliance entity.” 

We have interviewed academics in the past who advocate for a corporate probation office within the Justice Department to handle these types of corporate crimes. But it seems as if Lisa Monaco and Justice Department officials are advocating more for monitors. What do you make of a corporate probation office?

“Monitorships, if done correctly, can be very effective. I think of a probation officer as someone who has an oversight role. For an effective monitorship, you try and build on the work that’s been done by the company. You try to devise solutions that make sense within the entity. It’s a different level of expertise and involvement. The monitor is a much more effective solution.”

“The independence of the monitor is critical. You are not advocating for the company before the Department of Justice and you are not advocating for the Department to the company. You are truly independent. Bringing all of the expertise you bring during the course of your career, working with companies to establish effective, solid, sustainable compliance programs and helping the monitored entity achieve whatever they have resolved to achieve as part of their resolution with the Department of Justice.” 

“I think the monitorship model would be more effective than a traditional probation office model.”

Have you seen a shift in monitorship practice under the Biden administration?

“You might see a shift in the frequency of monitors. And you are also seeing more emphasis on diversity. I think I’m the sixth woman since 2012. And other diverse lawyers are being appointed as monitors. It’s a good development.” 

You said that Jenner & Block is one of the few big law firms that has a dedicated monitorship practice. Does the Justice Department look for previous experience when they choose monitors?

“It’s more that they look for the expertise required for the case at hand. They are looking for a deep bench and extensive experience in ethics and compliance programs – that may be an important skill set when they choose a monitor. They are more interested in what the bench looks like at the firm than necessarily whether they have done monitorships before.”

“Our monitorship practice has an established approach. Our approach distinguishes us from other law firms. The Department can read about our approach in the book we edited.” 

Many corporate criminal defense attorneys are former prosecutors. How does the practice differ from being a prosecutor?

“Prosecutors have almost unbounded power. One thing that becomes clear when you leave the Justice Department is the imbalance of power. The power of a grand jury subpoena, the power of prosecutorial discretion is significant. Part of our role as defense lawyers is navigating that uneven power structure and making sure that there is fairness in the system – whether it’s on behalf of a company or on behalf of an individual. The power dynamic is truly uneven.” 

But the corporate defendant has vastly greater resources at its disposal –  including these massive corporate criminal defense law firms –  than does the Justice Department Criminal Division. 

“Having the power of the grand jury subpoena – I can’t think of anything that is equivalent on the defense side. And because of that imbalance of power, companies often make the decision to cooperate with the government and not fight their case in court. That is a manifestation of the power dynamic being so uneven.” 

“Let’s say the company believes that the government’s view of the facts is inaccurate. It has to decide whether to challenge the government in court.  What do they think about first? The company thinks about Arthur Andersen. It thinks about the existential risk that it’s bringing to the company, its shareholders, its employees. The collateral consequences of demanding your day in court is a manifestation of the power imbalance.”

“Often the correct strategy is to cooperate and answer the government’s request for whatever they are looking for in their investigation.”

“The resource question you raise is kind of a red herring. At the end of the day, the prosecutors can issue a grand subpoena and the prosecutors can indict. There is just nothing that compares to that power.”

The reality is that we are seeing fewer and fewer criminal prosecutions of major American corporations. And maybe that’s because of the power dynamic. And very few trials.

“Yes, it is because of the risk of collateral consequences that companies cooperate. Companies cooperate their way out of being indicted. They might feel motivated to test the facts in court and have a neutral arbiter make a decision. But they don’t feel like they can do so.”

Putting aside the power dynamic, isn’t digging into a case and finding out the facts of the case – isn’t that role similar for both defense attorneys and prosecutors?

“In terms of developing the facts, yes. And our clients appreciate this. We investigate and present an unvarnished version of the facts to our clients. Having unvarnished information is critical to making smart strategic decisions.”

“In that way, it is similar. We are looking for the facts in our investigation. And we provide those facts in an unshaded way to our clients so that we can make smart strategic decisions.”

Which of your investigations end up never seeing the light of day?

“Really successful ones. Even in the case where there is government involvement. If your client gets a grand jury subpoena, and you decide to cooperate, and you successfully cooperate to the point of a declination, where there is no resolution whatsoever – that may never see the light of day. Obviously, if you are a public company, you might have to make some disclosures. But if you are not a public company, there is no obligation to disclose.”

“And the most successful outcome is a declination. That’s where the government picks up its ball and goes home and says – thank you very much.” 

“Also, internal investigations, culture investigations, risk investigations – those may never see the light of day. Sometimes they do because often there are press reports and civil litigation that swirls around culture issues.

But the most successful investigations remain sub rosa.”

Is that an explanation for this discrepancy we were talking about at the beginning of the interview? There seems to be a lot of investigations but not as many reported cases. Might that be a factor?

“Yes. There might be fewer reported outcomes. It could be there have been more declinations. It could be the investigations are now ongoing and the resolutions may start to trickle out. It’s hard to know. There is no set time frame. These things could go on forever.”

The Justice Department seems to be signaling to corporations – if you cooperate from the beginning, we’ll be as lenient as possible with you. Is that your experience with the Biden Justice Department?

“More declinations might result. But the new policy provides that if you do come in and cooperate appropriately, it provides a structure where the fines will be reduced. But that would come with a deferred or non prosecution agreement.”

[For the complete q/a format Interview with Katya Jestin, see 37 Corporate Crime Reporter 31(12), July 31, 2023, print edition only.]

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