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Washington-A bipartisan group of House lawmakers may soon formally ask the Department of Justice to change its controversial policy on waivers of attorney-client privilege in government investigations, and one of the nation’s top business groups is actively looking for court cases in which to challenge the policy’s legality. The waiver issue is now “a battle with multiple fronts,” said Stephanie Martz, director of the white-collar crime project of the National Association of Criminal Defense Lawyers (NACDL). “It’s all really interesting right now.” During a House Judiciary subcommittee hearing in March, a number of members voiced concern to Assistant Attorney General Robert McCallum about the so-called Thompson Memorandum’s erosion of the attorney-client privilege and work- product protection. Some members on both sides of the aisle, according to congressional sources, are working on a letter asking the department to change its policy. “I think the consensus among the members most engaged in this is they would prefer to ask Justice directly to change the policy before getting into any possible legislative fix,” said one person close to the discussion. In the last two weeks, the president of the American Bar Association (ABA) and the chief executive officer of the U.S. Chamber of Commerce also met separately with Senate Judiciary Committee Chairman Arlen Specter, R-Pa., to request a hearing on the policy and its impact. Specter reportedly expressed concern about the issue and an interest in holding a hearing. During that same period: ABA President Michael Greco sent a letter to Attorney General Alberto Gonzales asking him to modify the policy and suggesting revisions which, Greco said, “would remedy the problem of government-coerced waiver,” and still allow prosecutors to obtain the factual information that they need. The U.S. Sentencing Commission formally sent Congress proposed changes to the Federal Sentencing Guidelines, including an amendment eliminating language that corporations and others said encouraged the Department of Justice (DOJ) to demand privilege waivers as evidence of cooperation with investigations. A federal judiciary rule-making committee took a major step toward barring private parties from using privileged information in civil suits against businesses after those businesses waive the privilege for government investigators. A New York federal judge heard arguments on a related Thompson memo issue: defense claims that federal prosecutors pressured accounting giant KPMG to cut off payment of legal fees for its former employees facing trial for creating fraudulent tax shelters. [See story, Page 5]. Major business groups filed amicus briefs for that hearing. And, top U.S. Chamber of Commerce officials met with DOJ’s McCallum to press again for changes in the waiver policy. “The truth is, with the way these things work, it’s still a long shot that [DOJ] would on its own get to our position,” said Peter Lawson, the chamber’s director of congressional and public affairs. “We told Justice we are ready to go all out on this issue. We plan on committing whatever resources are necessary to make progress-either working through Congress, with Justice or in the courts. We’re going to be actively looking for cases to challenge this. Resources will not be a problem.” Fighting waivers The waiver issue has its genesis in a 1999 memorandum by then-Deputy Attorney General Eric Holder stating that a corporation’s willingness to disclose the complete results of internal investigations, and to waive its attorney-client and work-product privileges, are indicia of cooperation. In 2003, the Holder Memorandum became the Thompson Memorandum (named for then-Deputy Attorney General Larry Thompson), which put greater emphasis on waiver as a condition of cooperation. Business, civil rights and bar groups contend that waiver demands became more coercive and even routine as a result of language added to the Federal Sentencing Guidelines in 2004 authorizing the government to seek waiver as a condition for cooperation credit. In deleting that language in its latest batch of guideline amendments, the commission explained to Congress that in 2004, it expected waivers to be required on a limited basis. But after public hearings last year and this year, the commission said its 2004 language could be “misinterpreted” to encourage waivers. Martz said that the NACDL, the U.S. Chamber of Commerce, the American Civil Liberties Union and other members of the coalition formed to tackle this issue have had informal contacts with DOJ officials in recent weeks, but have seen no movement in its position. Despite that, Martz cautioned that “members of Congress and the coalition need to think hard about if there is a legislative solution, what it would be. Regulation of lawyers is not something Congress gets involved in generally, with the exception of the McDade Act [requiring federal prosecutors to follow local ethics rules]. “A legislative solution is in the cards, but we would like to have a meaningful discussion with DOJ first.” Congress may legislate, but “absolutely should not,” said privilege scholar Paul Rice of American University Washington College of Law. He opposes a legislative fix as well as a draft federal evidence rule that would limit the use of information obtained by waiver in government investigations only to government agencies-a so-called selective waiver. Selective waiver operates in only one federal circuit today, the 8th. The draft evidence rule would be binding on federal and state courts and would require congressional enactment. “Corporations have a solution here. They can just say no,” said Rice. “DOJ puts pressure on private individuals to waive privilege all of the time. Why should they be treated differently from private individuals?”

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