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Government power over corporate America no longer benefits the public interest it portended to protect after recent corporate scandals, according to one white-collar defense counsel who was at the center of one of those cases. Reid Weingarten, partner at Steptoe & Johnson of Washington, D.C., is head of the white-collar defense group there and recently represented WorldCom ex-CEO Bernie Ebbers. He told a group of general counsel from the Delaware Valley Wednesday, that the “white-collar defense bar has capitulated and rolled over.” “One of the awful things about the system right now is there is almost a grotesque imbalance of power between government and publicly traded companies when investigations are going on,” Weingarten said. He brought together the theme of the DELVACCA general counsel forum where most of the speakers said the pendulum has swung too far in regard to the willingness of government agencies to investigate and prosecute corporations. Weingarten took it one step further, however, when he said he had deja vu after hearing the previous speakers explain that they all have good intentions and want to solve the problem. He said more needs to be done than a simple declaration of good intent. Weingarten said he wants to see more cases going to trial instead of resulting in a deferred prosecution agreement. He said that companies, in the right case, could trust a jury to find in their favor. Even when prosecutors present weak evidence to a company, it usually chooses to accept a deal, keynote speaker Weingarten said. Judson Starr, chair of Venable’s environmental practice in Washington, D.C, speaking on a panel, said “There are cases that can be fought and resisted but the risk of guessing wrong is worse than ever before.” Weingarten outlined what the right type of case would be, and said that, in part, a company must move quickly to address the problem and have confidence that it had a strong compliance program in place. Former Assistant Attorney General Christopher Wray, a partner with Washington, D.C.’s King & Spalding, speaking on a panel, said a quick and helpful response will prove positive for the corporation when an investigation begins. In speaking about the Justice Department, Wray said, “there’s been a very strong decision that obstruction matters.” Some of the speakers, however, felt there was too much of an emphasis on divulging information to the government. There was a strong focus in the forum on the waiver of attorney-client privilege and how damaging that can be for a company if and when a case moves to a civil trial. “As a matter of public policy, it’s against the Department of Justice’s interest to request every document because it dilutes the quality of work done for public corporations,” Weingarten said. Starr said that “the old-time internal investigation is good policy and serves a public purpose.” Saul & Ewing partner James Becker echoed the sentiments of some of the other speakers when he said that often times corporations are left with little choice of whether to waive attorney-client privilege and accept a deal. He said that the government basically says, “we have the power to remove you from the planet,” so the companies take an agreement rather than be indicted. Becker also said that the bar has been lowered when it comes to the quality of evidence necessary to indict a company. Some of the speakers agreed that there is a general perception among government officials that if a company refuses to waive privilege, it must have committed some type of wrongdoing. Steven Zipperstein, general counsel for Verizon Wireless, also spoke on the panel. He said that the waiver of attorney-client privilege would never be accepted by a judge in a drug case, for example. U.S. Attorney Patrick Meehan said he disagreed with the assumption of wrongdoing. He said the bottom line when initiating an indictment is whether or not there was a case against the company. Cadwalader Wickersham & Taft partner Michael Horowitz said the best way to avoid these issues is to have a compliance program that is instituted at all levels of the company. He said the company should be able to prove that its board of directors and senior-level employees were quickly informed of any possible breaches of compliance. There should also be swift internal responses to any breaches, such as an investigation, termination of an employee or a monetary penalty, Horowitz said. “More and more companies need to think about compliance programs as investments,” he said. “Compliance is a competitive advantage,” Zipperstein said. “The department should promote more internal investigation and early disclosure.” Horowitz added that government agencies are focusing strongly on how integrated the program is into the company culture. He said that if a company institutes a compliance policy only to forget it exists, it is better off not creating one at all. Weingarten said a compliance program could help a company be on top of any possible issues. “You want to know the extent of a problem so you can make judgments before other people can place those judgments on you,” he said.

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