Upping the Stakes (Criminally) of the Internal Investigation

This post follows up on the Computer Associates (CA) issue mentioned in a prior post.  There, I
mentioned that one of the counts in the Indictment against CA management claimed that it was obstruction of justice to lie to a private attorney conducting an internal investigation if he “knew, and in fact intended, that the [private lawyer] would present these false [statements] to the United States Attorney’s Office, the SEC and the FBI so as to obstruct and impeded the Government Investigations.”  In such cases, the witness is effectively lying to the government.

At an ABA Annual Meeting session jointly sponsored by the Criminal Justice and Corporate
Compliance Committees of the Business Law Section, a panel discussed (among other things)
what the government’s CA obstruction theory means for lawyers conducting internal
investigations.  One panelist suggested that it creates a problem for lawyers given the Supreme
Court’s prior attorney-client privilege decision in Upjohn Co. v. United States.  There, the
Court held that the privilege covers interviews with lower level employees conducted during an
internal investigation, but only if (among other things) the “the employees themselves were
sufficiently aware that they were being questioned in order that the corporation could obtain legal
advice” and the company “clearly indicated the legal implications of the investigation.”  So, to
preserve the privilege, Upjohn requires lawyers conducting an internal investigation to explain
WHY the investigation is being conducted.  This might include mention of an existing or
anticipated government investigation.  Further, the ethics rules (see ABA Model Rule 1.13(f)) require the lawyer to explain that her client is the organization (and not the employee being interviewed), and that the organization controls any attorney-client privilege.  And the organization could waive the privilege and give the employee’s statement to others, including the government.

The bottom line is that a proper internal investigation will likely leave the witness aware that her
statement may end up in the government’s hands.  Under the government’s CA theory, this means
that a proper internal investigation exposes the witnesses to potential obstruction of justice
charges FOR LYING TO THE PRIVATE LAWYER CONDUCTING THE INTERNAL
INVESTIGATION.  This raised three questions: First, will the government carry the CA theory
this far, or was the CA case itself an extreme case?  Second, if the government carries the CA
theory that far, would that be an unjustified extension of the obstruction of justice statute?  And
third, does a lawyer conducting an internal investigation have a duty to inform her the witness of
obstruction of justice liability for false statements during the interview?  If the answer to question
three is “yes,” one can expect less cooperation with internal investigations.