Justice Department Defends Prosecution Guidelines

While acknowledging that “the time may come when revisions are needed,” a senior Justice Department official told the Senate Judiciary Committee that tactics used to obtain cooperation in federal cases of corporate wrongdoing were no different than in other criminal cases.

“We ask cooperating drug dealers, bank robbers and gun-toting felons to waive their Fifth Amendment privilege against self-incrimination all the time—and the vast majority of them do not have access to the high-priced legal talent corporations do,” said Deputy Attorney General Paul J. McNulty.

The Senate committee heard from critics who argue that government prosecutors are often coercive in demanding waivers of attorney-client privilege, thereby harming internal compliance programs. (See “Corporate Corruption Cases: Justice Department Tactics Challenged,” Business Ethics, Summer 2006).

Karen J. Mathis, President of the American Bar Association, said that “because the effectiveness of these internal mechanisms depends in large part on the ability of the individuals with knowledge to speak candidly and confidentially with lawyers, any attempt to require routine waiver of attorney-client and work product protections will seriously undermine systems that are crucial to compliance and have worked well.”

Mr. McNulty of the Justice Department disagreed: “Some attorneys assert privilege like that famous scene of Lucille Ball gobbling chocolates off of a conveyor belt. Everything is swallowed up by the in-house legal department. Memos about routine business activities are claimed as privileged. Accounting or financial records are similarly hidden.”

By James C. Hyatt (JCHyatt@yahoo.com) a New York-based freelance writer formerly with The Wall Street Journal. Published in CRO Magazine, Fall 2006.