New Rules for White-Collar Crime Cases

WASHINGTON — The Justice Department reined in its federal prosecutors Monday with new guidelines restricting their authority over independent monitors hired to oversee white-collar crime settlements.

The guidelines for so-called deferred prosecution settlements came the day before former Attorney General John Ashcroft was set to testify about his work as a monitor in a New Jersey case that has netted his law firm an estimated $27 million.

Sent to the nation's 93 U.S. attorneys and their offices, the guidelines aim to prevent any political or conflict-of-interest appearances in how the monitors are selected.

"These principles are about transparency, uniformity and consistency on the use of monitors," Assistant Attorney General Alice Fisher told reporters in Washington.

Generally, corporations hire monitors as part of the settlement agreement with the government. The monitors watch to make sure the corporations follow the agreement, and the monitors can report back to the government with the results.

Under the new guidelines, which only apply in criminal cases, the Justice Department's second-in-command must sign off on the monitors before they are hired. Additionally, the guidelines bar hiring monitors with current ties to the government or the businesses they would oversee.

The guidelines do not address how — or how much — the monitors are paid, as they are hired by the private corporations, Justice Department officials said. There also are no rules for how long their contracts may last.

Justice officials said the guidelines came largely as the result of an increasing use of deferred prosecution agreements — many involving corporate fraud cases — over the past 15 years.

Last fall, U.S. Attorney Christopher Christie in New Jersey acknowledged recommending that Ashcroft — his former boss — be hired to monitor a settlement between the government and Zimmer Holdings Inc. of Warsaw, Ind.

Zimmer Holdings is one of five makers of medical implants that agreed in September to pay $311 million and hire monitors to settle allegations they paid surgeons to use and promote their knee and hip replacements.

Christie, who has denied any conflict of interest, recommended Ashcroft's firm and four other legal teams to serve as monitors.

Ashcroft struck a deal last month to testify voluntarily in front of a House Judiciary Committee hearing on Tuesday rather than risk being subpoenaed to appear. The panel is examining lucrative contracts he and others received to monitor corporate settlements.

Congress long has questioned whether Justice Department guidelines were needed to govern the deferred prosecution agreements.

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On the Net:

House Judiciary Committee: http://judiciary.house.gov/

Justice Department: http://www.usdoj.gov

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