Thursday, July 10, 2008

Acceptance of Responsibility Needs to Be Timely - Attorney-Client Privilege

Why is it that immediately before the legislature is about to make a change that will affect DOJ policy, the DOJ steps in to say -  we'll make a change, no need for you Senators to step into this matter.  The problem with this approach is that the cosmetic changes that DOJ then makes usually will not resolve all the issues being considered by the congressional committee.  And more importantly, where was DOJ when everyone was shouting that change was necessary.  DOJ argues that the criminally accused needs to accept responsibility timely.  But their failure to act timely in changing policy -- and then announcing the changes just before the legislature acts -- is disturbing.

The latest scenario involves the attorney-client privilege and the famed McNulty Memo, which in prior lives resembled the Holder Memo, then the Thompson Memo, followed by the McCullum revisions.  The latest is that Deputy Attorney General Mark Filip sent a letter to Senators Leahy and Specter outlining changes that will be made by DOJ.

The letter states that in the last 18 months DOJ has not approved any attorney-client privilege waivers in the corporate arena. If that's the case, then why not just change the law so the problems of the past never happen again?

The letter provides that cooperation will be measured by facts and evidence and not by waivers. But who will provide the oversight to make sure that this actually happens in the U.S. Attorney offices across the country?

And why doesn't the letter speak to Category I waivers?  Will there be no changes here?

And after listing some suggested changes, changes that could probably result in a new Memo, the Filip Memo, the Deputy Attorney General states that "I have come to the conclusion that the above changes to the Principles are preferable to any legislation, however well intentioned and diligently drafted, that would seek to address the same core set of issues."   

But why is it preferable for DOJ to make the changes?  Is it because it will be easier for DOJ?

Somehow I have a feeling that this letter will not pacify advocates for the Attorney Client Privilege Protection Act.

Letter From Deputy Attorney General Mark Filip  -

Download leahy_specter_principles_letter_0.pdf

What Others Are Saying:

Pedro Ruz Gutuerrez, Legal Times, AG Mukasey Hints at Revision of McNulty Memo, Spars With Senators at Hearing

Dan Slater, WSJ Blog, DOJ: No, No, Don’t Worry About It, Senator. We’ll Fix the McNulty Memo

(esp) (blogging from JFK Airport)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2008/07/another-last-mi.html

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Comments

Interesting timing by Deputy Attorney General Mark Filip to tweak Catagory 2 of McNulty Memo when there are three major corporate fraud scandals:

1. Bear Stearns exec being indicted for corporate fraud.

2.Former President of First Bank Mortgage indicted on multiple fraud charges

3. State Attorney Generals in three states, Florida, Illinois, and California are suing Countrywide for corporate fraud.

Posted by: SP Biloxi | Jul 10, 2008 5:29:11 PM

The issue at hand is "third party" A/C privilege. The GC of Corp entities represents the Corp, not the individual employees. The Senate pushing for Karl Rove to testify and then pushing for the DOJ to reduce efforts to sway A/C assertions is a cat chasing its tail mentality.

If the outcome of this becomes the ability to refuse to address evidence under a broader version of the A/C concept; everyone will suffer at the benefit of a few.

The issue at hand is not that A/C privilege was broken, for the Courts can immediately address that issue and slap it down, as they should.

The issue at hand is whether or not "fringe" parties can be induced to stop waiving the privilege either as a defense or to demonstrate, in a good faith manner, that they have come clean.

The spirit of A/C is based upon the premise that one has to tell one's counsel everything, so that he/she can defend accordingly. That is a direct relationship and the prosecuting or opposing counsel cannot subpoena the defense counsel to violate the A/C. Such is sacrosanct.

However, the issue before Congress, the McNulty memo, is A/C privilege being asserted by third party persons. The only change that should occur here is a market or D&O negotiation for senior exec's to have the right to have their own direct, independent counsel.

We are on dangerous ground here and the DOJ is playing right into the hands of the schemers with the Senate/Press biting into the snow job.

The way this is going, once a Chptr 11 is filed, the Exec's will be able to plead the 5th under the new view of A/C.

Totally bogus premise, totally egregious outcomes.

Posted by: Laser Haas | Jul 11, 2008 10:57:51 AM

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