Justice Issues New Restrictions On Corporate Fraud Monitoring


The Justice Department has imposed new restrictions on government-sanctioned contracts with outside experts to implement and monitor corporate fraud settlements, reports the Washington Post. The issue has come under scrutiny because of a multimillion-dollar contract given to former attorney general John Ashcroft. U.S. attorneys now must get approval from senior Justice Department officials for such agreements, which allow companies to avoid criminal prosecution by making changes in corporate governance under the scrutiny of an outside monitor.

The rules were issued on the eve of Ashcroft’s scheduled testimony today before a House Judiciary subcommittee about his highly lucrative contract, which involves monitoring a settlement between an Indiana medical equipment firm and a federal prosecutor who used to work under him. Corporate monitors have been used more frequently since the 2002 indictment of accounting firm Arthur Andersen LLP, which folded after being convicted of obstructing justice. The Indiana company is expected to pay Ashcroft’s firm $28 million to $52 million for 18 months of work.

Link: http://www.washingtonpost.com/wp-dyn/content/article/2008/03/10/AR2008031002329.html

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