Exploring the experience of a corporate compliance monitorship took center stage as part of a spotlight session at Compliance Week’s National Conference in Washington, D.C.
The topic recently gained prominence following an October announcement from Deputy Attorney General Lisa Monaco, who said to the extent prior Department of Justice (DOJ) guidance suggested “monitorships [were] disfavored,” she was “rescinding that guidance.”
The Olympus monitorship: Getting to know the business
Christine Gordon, chief compliance officer at Olympus Corporation of the Americas, spoke about her company’s experience working with a DOJ-selected independent monitor who was tasked with overseeing Olympus’s compliance with a deferred prosecution agreement (DPA) the business signed with the DOJ in 2016.
The medical device company and a subsidiary agreed to pay $646 million in a global settlement addressing civil and criminal fraud, kickbacks, bribery, and conspiracy charges from the DOJ. The DPA required the business to meet certain reform and compliance requirements over a period of three years.
Gordon emphasized a monitorship depends on preparation. Her business established the roles and responsibilities for the people that would be involved in working with the monitor with an eye toward answering the question: What is your role in making this monitorship a successful one?
The business made sure to have executive leaders ask that question, underscoring the importance of getting the answer to it right.
Kathleen Matsoukas, partner at law firm Barnes & Thornburg, managed the attorney team that assisted the compliance monitor for Olympus, and she agreed with Gordon about the significance of adequate preparation.
“We as a monitor team got there early to get to know the people and business, the processes, the leaders and individual members of business units and each of their roles, and the workplace culture,” Matsoukas said. You need to create a plan beforehand but be flexible enough to know it will need changing.
“To know how the company should have been managing these products, we needed to know how they worked,” she said. “We spoke to and visited suppliers and distributors to get to know the business’s operations.”
Gregory Paw, who served as outside counsel for Olympus and is partner at law firm Freeh Sporkin & Sullivan, noted the importance of establishing the role of the monitor as a nonadversarial one. “Every leader involved in the monitorship had to explain the goal of the monitorship was a shared one: to make the company a better and stronger one,” he said.
David Walk, assistant U.S. attorney in the Criminal Division of the U.S. Attorney’s Office for the District of New Jersey, spoke about the end goal of any monitorship: The company needs to be capable of doing the work by itself.
Knowing and owning your data
Each of the speakers kept going back to the data the company possessed but was not successfully leveraging.
“They had this data, and the problem was they weren’t effectively using it within the compliance department to locate where their vulnerabilities were,” Paw said.
There was a lot of “this is just the way we’ve always done things” sentiment going on that needed to be addressed, he said. A large task for any monitor is to locate data and find out who owns it—or who should—and how to create a better process for managing the information the company is collecting, he said.
Gordon observed some of the people who proved most helpful in the monitorship process found it aided their careers. They learned new skills or were able to showcase ones the business had not known of previously.
A monitorship is an incredible drain of resources for companies, even if one is worth the effort in the long run. It’s important to know this going into it and realize some people are going to feel overburdened. The business needs to have a plan to deal with frustration and even attrition.
The imposition of a monitor does not end or stall dialogue with the DOJ; communication should be ongoing about how the monitorship is progressing and what the DOJ’s expectations are at each stage of the process.
- Chief Compliance Officer
- Christine Gordon
- compliance monitorship
- Compliance Week 2022
- Compliance Week National Conference
- Department of Justice
- Internal Controls
- Olympus Corporation of the Americas
- Regulatory Enforcement
- Risk Management
- Surveys & Benchmarking
- United States