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Washington -� During a Senate Judiciary Committee hearing on September 12, a top U.S. Department of Justice official acknowledged that the so-called Thompson Memo on the attorney-client privilege in corporate investigations has ignited complaints across the legal and business landscapes, but he vigorously defended the current policy as a sound one. “I’ve got the [Senate Judiciary] chairman and ranking chairman upset; former department attorneys general and other officials complaining. Everyone is complaining,” said Deputy Attorney General Paul McNulty. “But I believe the perception of how this works is different from the reality. “I really don’t see this as the kind of coercive practice that is being described by groups.” Senate Judiciary Chairman Arlen Specter, R-Pa., and ranking minority leader Patrick Leahy, D-Vt., both former prosecutors, questioned McNulty and a panel of critics of the Thompson Memo on how that memorandum�the department’s internal policy guideline on charging corporations�affects the Sixth Amendment right to counsel in corporate investigations. The Thompson Memo tells a prosecutor to consider nine factors in determining whether to charge a corporation for criminal wrongdoing. One of those factors is whether the corporation has cooperated in the investigation. In assessing cooperation, the memo says, one consideration is whether the corporation waived attorney-client and work-product protections. A �culture of waiver’ A coalition of business and legal organizations, including the U.S. Chamber of Commerce, American Bar Association, Association of Corporate Counsel and National Association of Criminal Defense Lawyers, contends that the memo has created a “culture of waiver” in which federal prosecutors now routinely demand waiver of attorney-client and work-product protections even where there are less intrusive means of getting information. “It’s just one part of one factor,” insisted McNulty. “It’s not an investigative issue; it’s a charging issue. If [the corporation] has cooperated, which they almost always do, that’s when the issue�do you have an internal investigation report�comes up. The text of the memo itself says this is one factor to be considered. We’re giving [prosecutors] the option to consider it.” But Specter countered, “As I read this policy, I think it is coercive and may even rise to the level of being a bludgeon. I would ask you to reconsider the policy.” Former Reagan Attorney General Edwin Meese III told the senators that the Thompson memo should be amended to eliminate any reference to waiver of attorney-client privilege and work-product protections in a charging decision. “In the same manner and same context, all references in the memorandum to a company’s payment of its employee’s legal fees should be eliminated,” he said. Meese also recommended that the department’s written policies should explicitly state that requests for waiver will only be approved in exceptional circumstances. These requests should be approved only at the national level, and the department should publish its procedures on waivers, as well as collect and publish statistics on how often waivers are requested, how often businesses agree to such requests and how often businesses waive even without a request from prosecutors. Enron prosecutor speaks Former Enron Corp. prosecutor Andrew Weissmann, now a partner at Chicago’s Jenner & Block, also urged the committee to consider revising the standard for indictment of a corporation for the acts of its employees. He suggested a more stringent criminal standard tying the acts of the employee more closely to the corporation than is currently used. Specter said that his committee has the several options before it: making a recommendation for changes in the Thompson memo to the Justice Department; waiting for the outcome of litigation over the waiver/attorney fees issue in the 2d U.S. Circuit Court of Appeals in the KPMG prosecution, or enacting legislation to address concerns with the department’s policy. He asked Meese what would be his preference. “I would hope this hearing would have a salutary effect on the department, including, perhaps, a recommendation from the committee,” said Meese. “I would hope legislation would be a last resort.”

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