Mukasey Had Been Overseer Finalist
Wednesday, January 30, 2008
Attorney General Michael B. Mukasey was in the advanced stages of securing a lucrative corporate monitor assignment last year but withdrew his name after he was nominated to lead the Justice Department, according to lawyers familiar with the previously undisclosed arrangement.
Mukasey, a former New York federal judge, had been a finalist for a part-time position reviewing the operations of a company that settled with government prosecutors by agreeing to hire an independent overseer to make sure it followed the law. The opportunity arose after Mukasey retired from the bench and joined a law firm, which he left in November when the Senate confirmed him for his current job.
"Michael Mukasey was one of a number of individuals under consideration to serve as a monitor for a corporation subject to a deferred prosecution agreement," said Justice Department spokesman Peter Carr. "He was approached while in private practice but was nominated to be attorney general before the selection process was complete."
Scrutiny of the monitor arrangements and complaints about their secrecy have mounted in recent weeks after a deal worth as much as $52 million was awarded to a consulting firm led by former attorney general John D. Ashcroft. The Justice Department launched a policy review last year to determine whether national standards should be imposed to avoid the appearance of impropriety.
Lawmakers and legal experts have sounded alarms about possible political patronage, raising questions about whether prosecutors have steered the sole-source contracts to people with ties to the Bush administration, the Justice Department and the Securities and Exchange Commission.
In the vast majority of cases, monitors operate without a judge's oversight of their work and their bills. The agreements have risen more than sevenfold in recent years as prosecutors have settled corporate fraud cases rather than bringing them to trial, which might destroy the business and cost employees their jobs. Name-brand companies from AOL and Bristol-Myers Squibb and Merrill Lynch have agreed to monitorships to resolve financial scandals. The identity of the company that Mukasey was in line to oversee could not be determined.
In light of the concerns, leaders of the House and Senate Judiciary committees this month directed the Government Accountability Office to review how monitors are selected and paid. Separately, a New Jersey Democrat last week introduced legislation that would require judges to supervise monitors and force administration officials to follow specific guidelines when choosing monitors.
The monitor program will be the subject of questions for Mukasey at a Senate oversight hearing today, a committee spokeswoman said. The House Judiciary panel is lining up witnesses for a stand-alone hearing on the monitor deals next month.
The agreements give monitors authority to interview employees, review business contracts and uncover legal violations. Fees are not made publicly available in most cases, spurring watchdog groups such as the Project on Government Oversight to wonder whether the deals are in the taxpayers' interest.
"The public should know more about these agreements," said Brandon L. Garrett, a law professor at the University of Virginia who has written about the arrangements. "It's kind of amazing that there is a shift going on and we can't tell whether the companies are getting away with murder or whether the prosecutors are overreaching."
At a news conference Friday, Mukasey said he was awaiting the results of a broad staff review of how monitors are chosen and paid but called the deals "perfectly appropriate" and pointed out that "people deserve to get paid, particularly people who have talent and ability and experience."
"There's great value in getting facts out and getting companies running the way they should and not taking every case to trial," he added.
Robert P. LoBue, managing partner of Mukasey's former law firm, Patterson Belknap Webb & Tyler, said late yesterday that he was not aware of any other lawyers there who had won monitor deals in recent years.