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Washington—An unusual coalition of business, civil rights and bar organizations scored a significant victory this week when the U.S. Sentencing Commission voted unanimously to delete language in the sentencing guidelines that encouraged government prosecutors to require waivers of the attorney-client privilege and work-product protections in order for corporations to qualify for leniency in sentencing. In April 2004, the commission sent Congress a number of amendments to Chapter 8 of the guidelines relating to “organizations,” a term that includes corporations, partnerships, unions, nonprofit groups, governments and other entities. The commission also included a change to the Section 8C2.5 commentary, which urges the government to require organizations to waive their protections to demonstrate cooperation with the government, and thus to qualify for a more lenient sentence. Those amendments became effective in November 2004. Looking to May 1 The vote to delete that commentary language came during a full meeting of the commission, which is preparing to send proposed amendments to the guidelines to Congress under a May 1 deadline. Those amendments would take effect on Nov. 1 unless Congress acts affirmatively to modify or reject them. Formal language on the waiver deletion was not adopted during the meeting, but will be made public shortly, according to the commission. “We don’t know what the commentary will subsequently say about why the language was deleted and that is going to be pretty important,” said Stephanie Martz, director of the white-collar crime project at the National Association of Criminal Defense Lawyers, a member of the sentencing coalition. “But our entire coalition is really, really pleased.” The coalition, which also includes the American Bar Association, the U.S. Chamber of Commerce and others has led an intense effort to gather data on the impact of the commentary language and has presented that information to the commission and Congress. Once the waiver language was incorporated into the guidelines commentary, the coalition said, the Department of Justice and other enforcement agencies contended it provided congressional ratification of the Justice Department’s policy of routinely asking that privilege be waived. The groups say the waiver language discourages personnel within organizations from consulting with their lawyers, and that in turn impedes the lawyers’ ability to counsel compliance with the law. They also assert that it makes detection of corporate misconduct more difficult by undermining internal compliance programs. And, they say, it unfairly harms employees who can cooperate and risk that their statements made to their organization’s lawyers will be turned over to the government, or who can decline to cooperate and take the chance of being fired. But the Justice Department, as recently as last month, told a congressional subcommittee that there is no routine demand for waiver of the attorney-client privilege as a condition to showing cooperation with an enforcement investigation. The Justice Department unsuccessfully urged the commission not to revisit the waiver language in the commentary at its meeting on proposed amendments. Deleting or amending the language as sought by the coalition groups would be “counterproductive to legitimate and important law enforcement efforts,” said Michael Elston, senior counsel to the assistant attorney general.

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