In announcing the deferred prosecution agreement reached with HSBC, the then US Attorney for the Eastern District of New York, Loretta Lynch, noted that the ‘historic agreement’ imposed ‘the largest penalty in any [Bank Secrecy Act] prosecution to date, [making] it clear that all corporate citizens, no matter how large, must be held accountable for their actions.’ That was 2012. The bank paid a then-record penalty of over $1.9 billion.

But the bank's compliance was so lacking that prosecutors insisted on an especially lengthy five year period of corporate compliance monitoring. The federal judge at the time insisted that those monitoring reports be made public, in summary form. As the reports came in, there was cause for real concern.

HSBC has reported in its Annual Report that while the monitor found that the bank had made ‘progress’ in compliance, he also ‘expressed significant concerns about the pace of that progress, instances of potential financial crimes and systems and controls deficiencies.’ All of that is public information. What the monitor specifically concluded is not – yet - public.

The federal judge ordered that the thousand page report be made public earlier this year, as a judicial document, after a member of the public wrote to the court. I recently filed an amicus brief agreeing with the judge’s analysis and highlighting the public interest in corporate monitorships generally. I felt the need to do this because the bank appealed the judge’s order to disclose the monitor‘s report. More troubling, the Department of Justice (DoJ) joined the bank’s side in the appeal.

Why would the Government do that? The DOJ said that it could compromise the working relationship between monitors and companies. The monitor saw no such risk. 

Keeping implementation of corporate deals in the dark itself harms the process immeasurably. There has been so much criticism of lenient deals with corporations, and banks in particular. The federal judge in the HSBC case was besieged with heavy public criticism of the deal. Moreover, a growing number of banks have been prosecuted and have entered deals multiple times. Clearly, compliance is problematic. This makes the efforts of monitors, whether successful or not, all the more crucial to the public interest.

I noted in the amicus brief that in a wide range of equally complex and sensitive areas, the DoJ has led the way in establishing independent monitoring to reform institutions, and it has typically insisted that the reports of such monitors be made public. For years the quarterly reports of the independent monitor of the Los Angeles Police Department have been made public. It is standard for monitor reports to be public when a company pleads guilty.

The HSBC’s monitor reports would be redacted under the judge’s order - no trade secrets or sensitive personnel information would (or should) be aired. Monitors do hard and admirable work. They do not work for a company or for the government. They serve the public interest. 

Hopefully, when the appellate judges hear the matter they will agree. But, as a matter of policy, the DoJ should insist that these reports be made public. We can celebrate and learn from successful corporate compliance efforts. And we can watch all the more closely if a monitor raises alarm bells. All sides would benefit from such an approach: prosecutors, industry, judges, and, most crucially, the public.

Brandon L. Garrett is the Justice Thurgood Marshall Distinguished Professor of Law at the University of Virginia School of Law.