Friday, May 5, 2006
Yesterday morning also had a wonderful presentation by Peter Goldberger who spoke about mail and wire fraud. The materials (a joint effort of myself and Peter G) can be obtained from NACDL.
In the afternoon Stephanie Martz, who serves as the NACDL White Collar Crime Director was kind enough to guest blog for us with the following-
The afternoon session began with a panel discussion on managing your client’s exposure pre-indictment. The participants (moderator Dave Angeli of Stoehl Reeves in Portland; Blair Brown and Melinda Sarafa, both of Zuckerman Spaeder; and Bob Morvillo and Gary Naftalis from NYC, super-lawyers and international men of mystery) began by playing the roles of lawyers for an audit committee, a CEO, and a CFO, but the general theme, expressed best by Blair Brown, was that the only major decision that an audit committee/company has to make these days is "whether to grab your knees when you’re bending over or your ankles." The leit motif was that just the presence of the Thompson Memo, regardless of whether its factors are specifically mentioned by prosecutors, is enough for company leaders to "appreciate" the stakes of choosing not to follow the letter of the Memo.
Some specific take-home lessons:
- It really is in the interest of the corporation to keep everyone in the same tent, given that if any individual employees are guilty, so is the corporation. Gary Naftalis: "Maybe I’ve been a defense lawyer too long, but I have to slow things down and get the facts. I’m not a prosecutor building a case. I have to share information with employees and do whatever I need to do to get the facts that I need."
- This, of course, runs up against the Thompson Memo. But you can hope for a reasonable prosecutor.
- On document retention/destruction once the first news of a problem hits the papers: a good faith effort to suspend a regular company document retention policy vis-a-vis the relevant material ought to suffice, even under the new(ish) 1519.
- On managing witness interviews: Obviously, you have to take notes. But now you need to worry about the kind of roadmap that you are giving the prosecutors once the inevitable waiver moment arrives. Sometimes, it is wise to advise your board not to produce a written internal investigation report at all.
Second session: Whether, when and how to proffer. The panel was led by former NACDL President Larry Goldman, and the panel participants were Rusty Wing from NYC; Bill Mateja of Fish & Richardson (and formerly counsel to DAGs Larry Thompson and James Comey); Ross Garber, of Shipman Goodwin LLP in Connecticut; and Jan Nielson Little of Keker Van Nest in San Francisco. Larry stepped everyone through a hypothetical with various employees of a company in different positions with potentially different degrees of culpability. One of the big problems is when the prosecutors give you a tiny window of time in which to decide whether your client is going to come in and proffer; you have to try to get more time, and Ross and Jan both observed that in reality, the cooperation offer isn’t actually going to expire.
One of the big problems is the state of the law with regard to how proffers can be used in trial. The Second Circuit has held that even raising a defense in opening argument that is remotely contrary to a proffer opens the door to its use in court. There is virtually no way to make these bullet proof. Therefore, maybe your client ought not proffer unless s/he is clearly innocent or guilty as sin. If you think you are going to trial, think hard about proffering.
Interesting question: Why bother with a proffer agreement if they don’t protect your client in any meaningful way? When your client then takes the stand, you can bring out that s/he went into the government and told her story without any protection at all. Excellent proof of consciousness if innocence.