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An Oct. 21 memorandum from the Department of Justice (DOJ) purports to announce a new policy respecting oversight of individual federal prosecutors when seeking a corporation’s waiver of the attorney-client privilege and/or its work-product protection. This new directive is seriously flawed, providing no standards, no real guidance and no meaningful oversight. In short, it will accomplish little, if anything, with respect to improving the controversial DOJ practice that serves to coerce waiver of both privileges. In January 2003, then-Deputy Attorney General Larry D. Thompson set forth a policy statement for federal prosecutors respecting when it is appropriate to file criminal charges against corporations and other business organizations. See Principles of Federal Prosecution of Business Organizations (Jan. 20, 2003). Set forth in the Thompson Memorandum are nine criteria to govern such prosecutorial decisions: the nature and seriousness of the offense; the pervasiveness of wrongdoing within the corporation; the corporation’s policy of similar conduct; the corporation’s timely and voluntary disclosures of wrongdoing “and its willingness to cooperate in the investigation of its agents, including, if necessary, the waiver of corporate attorney-client and work-product protection”; the existence and adequacy of the corporation’s compliance program; the corporation’s remedial actions; collateral consequences including disproportionate harm to shareholders; the adequacy of the prosecution of individuals responsible for the corporation’s malfeasance; and the adequacy of civil remedies or regulatory enforcement actions. Many federal prosecutors have interpreted the policy as justification to seek, and in many cases virtually demand, that a corporation use its resources not only to conduct a thorough investigation of alleged wrongdoing, but to turn over the fruits of such investigation to the government. It is routine today for federal prosecutors to demand witness statements, attorneys’ impression of witnesses and core attorney-client privileged communications and attorney work product. In reality today, a corporation that does not waive these valuable privilege rights effectively is considered a noncooperator. Indeed, some prosecutors even go so far as to set limits on what corporate counsel can say to individual corporate officers, or to the attorneys representing them, indicating or implying that any information sharing would be considered uncooperative behavior. It is striking that this new guidance was disseminated only in the aftermath of a pointed American Bar Association resolution in early August of this year, stating, among other things, that it “opposes the routine practice by government officials of seeking to obtain a waiver of the attorney-client privilege or work-product doctrine through the grant or denial of any benefit or advantage.” Besides providing no guidance as to when, and under what circumstances, waivers should be sought, the new directive is flawed because all such decisions are left to individual U.S. attorneys with no specified oversight by Washington. No substantive guidance The new policy, if it can even be called that, will have little, if any, effect in eliminating the now virtually routine request for waivers of attorney-client and attorney work-product privilege. Given that the new memorandum contains no substantive guidance, each district is now to develop its own waiver policies and implement these policies as it sees fit. This balkanized policy is unlikely to stem the serious problem with the current practices. There is no indication, moreover, that it will change the present practice of requiring corporations to conduct their own exhaustive internal investigations and then promptly disclose all details of those efforts, allowing the government access to information that legions of legal authorities over the years have recognized to be protected inviolately. On a positive side, perhaps corporate defense counsel might at least have some chance for incremental cooperation while districts are formulating their new obligatory written procedures. That is, it may be possible to protect attorney-client communications or work-product from routine immediate disclosure at least at the outset of a governmental criminal inquiry. Also, the new policy could lead to increased supervisory oversight, reining in unreasonable requests by overly aggressive prosecutors. Perhaps, though, the most significant impact of the new memorandum may be to seek to silence critics who have complained about the truly offensive waiver requests, and the absence of any real departmental oversight. Undoubtedly DOJ will now refer these critics to each district, leaving it to individual U.S. attorneys on a case-by-case basis to deal with that criticism. Clearly, though, this is hardly a satisfactory response when critically important core rights that underpin our legal process are at stake. Stephen W. Grafman and Jeffrey L. Bornstein are partners in the Washington and San Francisco offices, respectively, of Kirkpatrick & Lockhart Nicholson Graham. Both are former assistant U.S. attorneys.

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