From The New York Times:
WASHINGTON — When the top federal prosecutor in New Jersey needed to find an outside lawyer to monitor a large corporation willing to settle criminal charges out of court last fall, he turned to former Attorney General John Ashcroft, his onetime boss. With no public notice and no bidding, the company awarded Mr. Ashcroft an 18-month contract worth $28 million to $52 million.
The contract between Mr. Ashcroft’s consulting firm, the Ashcroft Group, and Zimmer Holdings, a medical supply company in Indiana, has also drawn the attention of Congressional investigators.
The New Jersey prosecutor, United States Attorney Christopher J. Christie, directed similar monitoring contracts last year to two other former Justice Department colleagues from the Bush administration, as well as to a former Republican state attorney general in New Jersey.
A spokesman for Mr. Ashcroft said that the Ashcroft Group had not lobbied for the contract but was pleased by the referral.
In the Bush administration, federal prosecutors have increasingly relied on out-of-court settlements with large corporations in criminal investigations that in the past might have resulted in indictments and trials. The settlements often call for outside lawyers to be retained by the companies to monitor the agreements. The contracts call for the lawyers to monitor the company’s compliance with the settlements through financial audits and other types of internal investigations.
A new study by two Texas lawyers, Lawrence D. Finder and Ryan D. McConnell, found that the number of so-called deferred-prosecution or nonprosecution agreements between the department and large companies grew to 35 last year from 5 in 2003.
Often, the names of corporate monitors are not made public. The internal inquiry started after Zimmer Holdings revealed in filings with the Securities and Exchange Commission in late October that it had hired Mr. Ashcroft’s consulting firm, based in Washington, to monitor its settlement of criminal charges based on accusations of kickbacks to doctors involving the company’s knee and hip implants.
The firm said Mr. Christie had directed it to hire Mr. Ashcroft. Mr. Christie has acknowledged that he chose Mr. Ashcroft for the assignment.
Mr. Christie directed similar contracts in settlements with other medical-supply companies to two other former Justice Department colleagues — David N. Kelley, the former United States attorney in Manhattan, and Debra Wong Yang, his counterpart in Los Angeles — and to David Samson, the former Republican attorney general in New Jersey.
Under the settlements with the Justice Department, the companies negotiate the fees with the monitors themselves, a situation legal scholars say has the potential for abuse because companies might be overly generous to encourage leniency.
Department officials said that there were few internal guidelines for hiring independent monitors and that Mr. Christie was not required to seek approval from the Justice Department to name Mr. Ashcroft and the others and had not done so.
In its filing with the Securities and Exchange Commission, Zimmer said it had agreed to pay the Ashcroft firm a monthly fee of $750,000, and to reimburse it for expenses that were expected to total $150,000 to $250,000 a month.