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DOJ shifts privilege policy

By: dmc-admin//September 8, 2008//

DOJ shifts privilege policy

By: dmc-admin//September 8, 2008//

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The Department of Justice announced that, effective immediately, it will no longer allow waiver of the attorney-client privilege to be used as a bargaining chip in corporate criminal prosecutions, officially replacing the controversial “McNulty Memo” with a new corporate charging policy.

And while the move was hailed by legal and business organizations as well as lawmakers, many said they still want legislation passed barring all federal agencies from seeking privilege waivers in exchange for prosecution cooperation credits.

“The policy that was released by the Justice Department is probably about as good as anything we could have hoped for,” said Susan Hackett, senior vice president and general counsel for the Association of Corporate Counsel. “We are commending them for recognizing the need for change. But their policy is only one part of the problem here.

Unless we get each one of the other federal agencies to individually reverse their policies too, legislation is still needed.”

Deputy Attorney General Mark R. Filip announced the new policy, which governs how all corporate crimes are investigated, charged, and prosecuted by the DOJ, at a Aug. 28 press conference. Under the new guidelines, credit for corporations’ cooperation will be based only on their disclosure of relevant facts and evidence, Filip said. The consideration of privilege waivers, the company’s advancement of attorneys’ fees to employees, or participation in joint defense agreements for cooperation credits will be prohibited.

Filip said the changes reflect “the long-standing tradition of refining the department’s policy guidance in light of lessons learned from our prosecutions, as well as comments from others in the criminal justice system, the judiciary, and the broader legal community.”

In July, Filip wrote to Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., and committee ranking member Arlen Specter, R-Pa., informing them of the impending policy change, and urging them to hold off on the legislation introduced in the Senate earlier this year by Specter.

The bill, S. 3217, called the Attorney-Client Privilege Protection Act, would ban federal agencies from using a company’s decision to waive the privilege as a factor in determining whether to indict, deciding the severity of charges or helping foster a more favorable plea agreement. The measure also would bar prosecutors from making a corporation submit its attorneys' litigation materials. A companion House measure, H.R. 3013, passed in November.

The legislation was in response to growing criticism of a policy put in place in 2006 by former Deputy Attorney General Paul McNulty allowing DOJ prosecutors to urge companies to waive attorney-client and work-product doctrine in exchange for more favorable prosecution terms.

After the new “Filip Memo” was announced, Specter praised the policy, but said he would push forward with the bill.

“The revised guidelines are a step in the right direction but they leave many problems unresolved so that legislation will still be necessary,” Specter said in a statement issued the same day as the new policy. He added: “The new guidelines expressly encourage corporations to comply with the waiver and disclosure programs of other agencies including the SEC and EPA. Legislation, of course, would bind all federal agencies and could not be changed except by an Act of Congress.”

That sentiment was echoed by American Bar Association President H. Thomas Wells, Jr., who called the attorney-client privilege and work-product doctrine “bedrock legal rights [that] are sacrosanct and must not be dependent on the personal leanings of each new deputy attorney general.”

The Coalition to Preserve the Attorney Client Privilege, a consortium of groups including the ACC, the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Association of Criminal Defense Lawyers and a number of other groups, also urged the bill to be passed despite the new DOJ policy.

“The beauty of legislation is that the whole [issue] can be resolved, and we can have a certain degree of predictability to the process,” Hackett said.

But the late-hour of the congressional term makes the future of the bill, which sits in committee in the Senate, uncertain. And a the new White House administration will also bring new personnel, and possibly new policies at the Justice Department and elsewhere, in January.

Hackett said she is hopeful that the legislation will be passed before the congressional session ends and the administration changes, noting that the Senate bill is co-sponsored by Democratic vice-presidential nominee Sen. Joe Biden, D-Del., and also co-sponsored by Sen. Lindsay Graham, R-S.C., who is a close ally of GOP presidential nominee and Arizona Senator John McCain. “If not, we will sharpen our pencils and get ready to start again for the next session,” she said.

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