Sunday, April 16, 2006

Judge Allows Hearing on Government's Use of Thompson Memo in KPMG Case

At the end of last week, US District Court Judge Lewis Kaplan issued an Order (Download Order.pdf) responding to defendant's motion arguing that the government was improperly interfering with defendant's right to counsel through use of the Thompson Memo. The government's response proved to be insufficient for the court, as it should be. The court stated:

"Assuming arguendo that the government's account of the discussions with KPMG is accurate, and the Court has no reason to suppose that it is not, the government's presentation may not be a sufficient response to the defendants' position.  It ignores, among other things, the defendants' allegations that (1) the Thompson memorandum, insofar as it deals with advancement of defense costs as a factor relevant to whether a prospective corporate defendant will be prosecuted, is an improper interference with the defendants' rights to obtain counsel of their choice and to mount a defense consistent with their means, and (2) KPMG's decision not to advance defense costs was influenced by the Thompson memorandum and KPMG's desire to avoid prosecution.  Moreover, the government's declaration concedes that the lead prosecutor in this case inquired in February 2004 about KPMG's obligations and plans with respect to payment of legal fees of partners and employees.  Against the background of the Thompson memorandum, the inquiry itself arguably was a signal to KPMG as to actions that would promote its chances of avoiding prosecution."

The court's Order permits discovery on this issue and has set a hearing for consideration of the defendants' motion. Perhaps the most important part of this Order is its recognition of the importance of a defendant's right to counsel.  With the government blatantly asking corporations in deferred prosecution agreements to waive the attorney client privilege and now asking a corporation if they will be paying employees attorney fees, the government is crossing an important line in our adversarial system. 

(esp)

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» Criminalizing the right to counsel from Houston's Clear Thinkers
This earlier post examined the Justice Department's policy under the controversial Thompson Memo to threaten to go Arthur Andersen on companies that fulfill an obligation to pay defense counsel for current or former employees who are under criminal inv... [Read More]

Tracked on Apr 17, 2006 5:16:23 AM

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