DOJ Capitulates on Holder/Thompson/McNulty Memos

What a coincidence. On the same day that the Second Circuit publishes its landmark Stein decision, upholding Judge Kaplan’s dismissal of the KPMG indictments based on DOJ’s interference with the Sixth Amendment right to counsel, Deputy AG Mark Filip (recently installed) announces DOJ’s total repudiation of the Holder/Thompson/McNulty Memos’ infringement on attorney client privilege and work product. The remarks can be found here. As Comrade Lenin would say, this is no accident. DOJ’s long overdue and supine surrender comes in the face of Senator Arlen “Single Bullet” Specter’s proposed federal legislation aimed at ending DOJ’s unconstitutional practices.

Here, from Filip’s remarks, are the highlights of the new policy:

“First, credit for cooperation will not depend on whether a corporation has waived attorney-client privilege or work product protection, or produced materials protected by attorney-client or work-product protections. It will depend on the disclosure of facts. Corporations that timely disclose relevant facts may receive due credit for cooperation, regardless of whether they waive attorney-client privilege or work product protection in the process. Corporations that do not disclose relevant facts typically may not receive such credit, just like any other defendant”

“Second, prior Department policy allowed federal prosecutors to request, under certain conditions, that a corporation disclose non-factual attorney-client privileged communications and work product, such as legal advice. This is what the old guidelines designated “Category II” information, and it lies at the core of the attorney-client privilege and work product protection. The new policy forbids prosecutors from asking for such information, with only two exceptions, both of which are well-recognized in existing law.”

“Third, the new policy instructs prosecutors not to consider whether a corporation has advanced attorneys’ fees to its employees, officers, or directors when evaluating cooperativeness. Under the earlier guidance, the Department reserved the right to consider such payments negatively in deciding whether to assign cooperation credit to a corporation. That is no longer the case. A corporation’s payment of or advancement of attorneys’ fees to its employees will be relevant only in the rare situation where it, combined with other circumstances, would rise to the level of criminal obstruction of justice. This of course will generally not be the case.”

“Fourth, under the new policy, federal prosecutors may not consider whether the corporation has entered into a joint defense agreement in evaluating whether to give the corporation credit for cooperating. There are legitimate reasons why a business would choose to enter, or not enter, that kind of agreement. The government may, of course, ask that a corporation refrain from taking information the government provided it and disclosing that information to third parties. But the mere participation in a joint defense agreement by a corporation will not be taken into account for the purpose of evaluating cooperation.”

“Fifth, prior guidance allowed prosecutors to consider whether a corporation disciplined or terminated employees for the purpose of evaluating cooperation. That is now disallowed. Prosecutors may only consider whether a corporation has disciplined employees that the corporation identifies as culpable, and only for the purpose of evaluating the corporation’s remedial measures or compliance program.”