Justice Dept. Must Reveal Names of Unselected Corporate Compliance Monitors

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U.S. Justice Department headquarters in Washington. Credit: Mike Scarcella / NLJ [/caption] The U.S. Justice Department cannot continue to withhold the names of would-be compliance monitors who were ultimately not selected to oversee 15 corporate entities that reached deferred prosecution agreements, a Washington federal trial judge said. The ruling from U.S. District Judge Rudolph Contreras came in a pending public-records suit that challenged the authority of the government to keep secret the names of monitor candidates—and their associated law or consulting firms—that the defendant companies proposed to the Justice Department. The records request focused on deferred prosecution agreements under the Foreign Corrupt Practices Act that involved, among other companies, Daimler AG, Alcatel-Lucent S.A., Avon Products Inc. and BAE Systems. Deferred prosecution agreements often require a company, at its own cost, to hire a monitor to make sure the terms of the deal are being followed. Compliance monitor contracts can run in the tens of millions of dollars. The monitor selection process, Contreras noted, is often "cloaked in secrecy." Releasing the names of proposed—but unselected—monitors will give the public some measure to assess the fairness of the process, lawyers for the plaintiff, journalist Dylan Tokar, argued in court papers. "Particularly in cases involving violations of anti-corruption laws, the public has a strong interest in knowing exactly who is involved in the corporate compliance monitor selection process, including both who is nominated for these positions and who is evaluating those candidates," Tokar's lawyers at the Reporters Committee for Freedom of the Press—executive director Bruce Brown and staff attorney Jennifer Nelson—said in a court filing. "Without knowing who is responsible for DOJ’s enforcement of the FCPA, the public has little hope of holding the government accountable for that task." William Miller, a spokesman for the U.S. attorney's office in Washington, declined to comment on the ruling. The government, which has not turned over the information, could decide to the challenge the order on appeal.

Rudolph Contreras. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL

The Justice Department resisted disclosing the compliance candidate names, arguing that the release of unselected candidates would unfairly invade privacy rights. "Harm and embarrassment" would follow those snubbed monitors, according to the government. Contreras was not swayed. "The court concludes that while DOJ has demonstrated that these individuals have more than a de minimis privacy interest in their anonymity, the public interest in learning these individuals’ identities outweighs that privacy interest, and therefore, the individuals’ names and firms must be released," Contreras said in his March 29 ruling. The privacy interests at stake, Contreras said, "are those of high-level professionals who were nominated, but not ultimately selected, to participate in a lucrative contract." Indeed, Tokar's attorneys noted that compliance monitors are often former prosecutors, "distinguished" in their careers as having advised companies on internal investigations and enforcement matters. "Being nominated for multiple high-profile monitorships is likely to advance their careers and reputations, even when they are not ultimately selected for a position," the Reporters Committee lawyers wrote. "Revealing their names simply does not implicate the same issues presented by the disclosure of information about unsuccessful job applicants who may have an interest in preventing their current employers from learning that they wanted to leave their jobs and had sought employment elsewhere." Contreras said "the public interest in disclosure of the information outweighs the weak privacy interests at issue." The court ruling is posted in full below: [falcon-embed src="embed_1"] Read more: Ex-Prosecutor Bart Schwartz Named Monitor for International Shipping Company Big Law Firms Reveal Rates in Pitches for Herbalife Monitor FTC and Herbalife Snub Big Law for Consulting Firm As Compliance Monitor The Compliance Monitor Dilemma Court Urged to Reject 'Blanket Sealing' of Monitor's Report in HSBC Case