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WASHINGTON � With bills now introduced in both the House and Senate, a wide-ranging coalition of business, bar and civil rights groups sees possible success by year’s end for a new law barring federal prosecutors from requiring waiver of attorney-client and work-product protections in corporate investigations. Bolstering its political campaign is a new survey by the Association of Corporate Counsel (ACC) that found that more than 90% of 458 in-house counsel responding believe that the attorney-client privilege in the context of government investigations is either nonexistent or severely damaged. That is an increase from the organization’s 2005 survey, when 74% of respondents shared those sentiments. Skepticism by in-house counsel comes despite the recent policy changes in the use of privilege waivers announced by the U.S. Department of Justice (DOJ) in the so-called McNulty Memorandum, named after Deputy Attorney General Paul McNulty. “If you ask inside or outside counsel if they give any different advice now that we have the McNulty Memo, they would say no,” said Stephanie Martz, director of the white-collar crime project of the National Association of Criminal Defense Lawyers, which assisted in the survey. “The incentives [for waiver] are still there; the demerits [for nonwaiver] are still there,” Martz added. In the pipe On July 12, Representative Robert “Bobby” Scott, D-Va., chairman of the House Judiciary Committee’s subcommittee on crime, terrorism, and homeland security, introduced H.R. 3013, the Attorney-Client Privilege Protection Act of 2007. The legislation mirrors a Senate bill introduced earlier this year by Senator Arlen Specter, R-Pa., and Senate Judiciary Committee Chairman Patrick Leahy, D-Vt. Key to the coalition’s optimism about final legislative action this year is the strong bipartisan and high-level support for the House legislation, drafted after hearings on the issue in March. Scott’s co-sponsors include House Judiciary Committee Chairman John Conyers, D-Mich., as well as the ranking Republican member of the full committee, Representative Lamar Smith, R-Texas, and the ranking Republican subcommittee member, Representative J. Randy Forbes, R-Va. After the March hearing, “The members did believe there is a problem with respect to the way DOJ carries out its investigations and felt even though the McNulty memo made changes, it didn’t go quite far enough,” said a committee staffer. Scott’s bill would prohibit all federal enforcement agencies from, among other things: • Requesting, demanding, rewarding or penalizing in any way an entity’s decision with regard to the waiver of its attorney-client privilege. • Demanding that an entity refuse to pay its employees’ attorney fees. • Demanding that an entity refrain from entering into joint-defense agreements with its own employees, even when the business and its employees share a common interest. The subcommittee hopes to mark up the bill before the House’s August recess, said a committee staffer. It would go next to the full Judiciary Committee. Limited use � so far But a DOJ spokesman said that the McNulty memo “makes clear that attorney-client communications should only be sought in rare cases; that is, that legal advice, mental impressions and conclusions and legal determinations by counsel are protected.” Since the memo was issued in December 2006, he added, prosecutors have submitted “only a handful” of waiver requests for factual information and no waiver requests for attorney-client communications. “These statistics do not support the claim of widespread abuse or a need for legislative action,” the spokesman said. On the Senate side, there has been no action on the Specter bill, primarily because the Senate Judiciary Committee has been engrossed in its investigations of the U.S. attorney firings and warrant-less domestic wiretapping. “Hopefully one house or the other will take the lead and move rapidly,” said W. Stephen Cannon of Washington’s Constantine Cannon, who is advising the ACC on the issue. Cannon said that the combination of House sponsorship � plus the dismissal of charges against 13 defendants in the KPMG tax-shelter prosecution because of prosecutorial misconduct on the privilege issue � “puts a little flesh on the bones of what the fundamental issue is.”

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