Monitoring is a common tactic used to constrain the behavior of organizational actors. Agency theory research on monitoring focuses at the institutional level on factors such as incentives, contracts, or self-interest, largely directed at those with high power. At the same time, significant monitoring is clearly directed at low-power workers, whose performance and compliance behaviors may be rigidly controlled; arguably, the degree to which monitoring is directed at low-power more than at high-power actors is disproportionate. In this paper, we examine a psychological predictor of decisions about whom to monitor: Specifically, we contend that people’s judgments of someone’s ethicality and thereby trustworthiness are predicted by the target’s power; and these inferences on the basis of power affect decisions about whom to monitor. As a consequence, institutions may excuse powerful actors from the monitoring requirements that should constrain any ethical lapses. That is, an overly credulous view of the powerful or misdirected suspicion toward the powerless may create conditions that enable abuses by the powerful. We examine these predictions in a series of 5 studies (3 experiments and 2 field studies). Our findings challenge the notion that people subscribe to a “power corrupts” view in evaluating powerholders, and our research highlights how the very mechanism organizations put in place to constrain powerholders’ behaviors (i.e., monitoring) may, because of psychological biases in power-based inferences, be directed away from the intended targets.