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Goldman Sachs Legal Chief Knocks Biden DOJ on White Collar Shift

March 4, 2022, 10:09 PM

Goldman Sachs’ general counsel raised concerns about the Justice Department’s approach to corporate crime, particularly a recent shift in appointing more independent monitors after criminal settlements.

Kathryn Ruemmler, who was promoted to chief legal officer at the financial giant last year, said Friday she’s told Deputy Attorney General Lisa Monaco she disagrees with her on the effectiveness of imposing third-party monitors as part of corporate resolutions.

“I just don’t think it’s a space that the department really should be in,” Ruemmler said at the American Bar Association’s white collar crime conference in San Francisco.

Monaco, who another conference panelist described as a good friend of Ruemmler’s, announced last fall that DOJ prosecutors would have more freedom to require the imposition of monitorships to police compliance by corporate wrongdoers. Businesses dislike monitorships, which they must pay for and can cost tens of millions of dollars over several years.

“I have long been of the view that monitors should really be reserved for the quite unusual case, that they should not be the norm, that they should be only required in very very rare circumstances,” said Ruemmler, who served as White House counsel to former President Barack Obama.

DOJ is “at its best when it’s investigating and prosecuting crimes,” added Ruemmler, who was also principal associate deputy attorney general under Obama. “That’s what they should be doing. And when you start getting into monitors, the department starts to feel and I think look a bit more like a regulator.”

The department attached monitors to a pair of year-end settlements last year, after their application plunged in the Trump era.

The Goldman executive said she is also skeptical about how DOJ’s commitment to prosecuting more individuals involved in white-collar crime would be implemented. Ruemmler, who as a DOJ prosecutor played a lead role in charging Enron executives in the 2000s, said Attorney General Merrick Garland’s commitment to prioritize holding individuals accountable is “important” and a “pretty noncontroversial” longstanding priority.

Yet she advised that the Biden DOJ must be careful “that in the zeal to focus on individuals you don’t start bringing cases where there’s a real question about whether or not someone has really engaged in criminal wrongdoing.”

“Sometimes what I worry about when there are kind of broad policy speeches from departmental leadership is how that gets filtered out into the rest of the department with prosecutors with less experience,” Ruemmler added.

To contact the reporter on this story: Ben Penn in San Francisco at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Seth Stern at sstern@bloomberglaw.com; John Crawley at jcrawley@bloomberglaw.com