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The attorney-client privilege has been under attack in this country for some time. Now, with the help from the American Bar Association and your own King County Bar Association, along with a unique mixture of others (including the ACLU, the Wall Street Journal editorial page, the U.S. Chamber of Commerce, the National Association of Criminal Defense Lawyers, and numerous state and local bars, among others), effective influence is being directed to cause the Department of Justice to stop pressuring corporations to “cooperate” by waiving the privilege.
The U.S. Department of Justice, as initially outlined in 1999 and later reaffirmed in the famous 2003 “Thompson Memorandum”, counts a company’s willingness to waive its attorney-client communication privilege as “cooperation” when it decides whether to charge it with a federal crime. In practice, the Department through its prosecutorial staff, would pressure corporations with threats of indictment unless the privileged was waived. Then Deputy Attorney General Paul J. McNulty defended the waivers as an efficient way to obtain information: “There are many ways for government investigators to get the facts in a corporate fraud investigation….[s]ome ways are faster and more productive than others. One of the most productive ways to get the facts is for a cooperating corporation to tell the government what it knows.”
Overreaction to Corporate Fraud Claims Led to Coercive Undermining of the Privilege
Recognizing that the continued pressure to waive the attorney-client privilege and work product doctrine would have a serious undermining effect upon a basic constitutional right, Senator Arlen Specter (R-Pa.) held hearings before the Senate Judiciary Committee last fall, explaining “the right to counsel is just very, very fundamental.” He worried that under the DOJ’s approach, if companies don’t surrender their rights, they are more likely to be indicted and that an indictment can kill a business. “I think it is coercive,” he adds. “It may even rise to the level of being a bludgeon.”
Consistent with testimony that Karen Mathis, President of the ABA, presented to Specter’s committee in September, 2006, the KCBA joined with other groups to express their serious concern regarding the Department’s policies that permit the pressuring of companies and other organizations to waive the fundamental protections of the privilege and work product doctrine. In a letter dated November 27, 2006 addressed to John McKay, then U.S. Attorney for the Western District of Washington, the KCBA urged the DOJ to adopt the Model U.S. Attorney Policy prepared by the ABA Task Force on the Attorney-Client Privilege. A copy of the letter may be found at KCBA.org/scriptcontent/KCBA/aboutkcba/pdf/mckay-ltr.pdf. The Model Policy would limit the kinds of information that prosecutors could request from companies as a sign of cooperation, to non-privileged information while striking a balance with effective law enforcement.
McNulty Memorandum Viewed as Continuing to Permit Erosion of Rights
In December, Deputy A.G. Paul McNulty, before he resigned in the wake of the U.S. Attorney resignation scandal, acknowledged hearing from many in the corporate legal community that the Department’s practices “may be discouraging full and candid communications between corporate employees and legal counsel.” He issued new guidelines which prohibited prosecutors from viewing a corporation’s refusal to waive “negatively” and to require approval at the highest level within the Department before a waiver request could be made in writing. The 2006 “McNulty Memorandum” is currently in force within the Department. A variation on that view was recently expressed by Debra Wong Yang, former U.S. Attorney for C.D. California: “There is a benefit to the public good that would be served by permitting limited waivers, in a criminal investigation -- not a complete abandonment of the privilege necessarily, but to permit for waiver to some extent."
The ABA and other groups were quick to point out that the “McNulty Memorandum” policies fell far short of what was needed, since they did not stop young or aggressive prosecutors from indirectly or inferentially pressuring for a waiver. Instead, it merely required high-level Departmental approval before a formal demand for a waiver could be made. In addition, the DOJ continues to give companies credit if they “voluntarily” waive the privilege without being formally asked. These polices are consistent with what 900 corporate counsels, in responding to a 2006 survey, believe has led to a “culture of waiver” within the agencies including the DOJ, the SEC and others. (http://www.acca.com/Surverys/attyclient2.pdf)
Legislation Introduced to “Protect the Privilege”
In January 2007, Sen. Specter introduced Senate Bill S. 186 “[t]o provide appropriate protection to attorney-client privileged communications and attorney work product.” The legislation would bar the Justice Department and other federal agencies from pressuring companies to waive their privileges or take unfair punitive actions against their employees as conditions for receiving cooperation credit. In April, ABA Day in Washington was attended by several members of the Washington State bar who are representatives for KCBA or WSBA to the ABA House of Delegates. Visits with Washington State Congressmen Inslee, Baird, Smith and McDermott offered a further opportunity to specifically urge support for legislative protection. Unfortunately, neither Senators Murray nor Cantwell were available to speak to members of the Washington delegation at any time during ABA Day.
Sen. Patrick J. Leahy is now Chairman of the Senate Judiciary Committee, and in a letter dated June 4, 2007, ABA President Mathis urged immediate support for legislation like S. 186 which would “strike the proper balance between effective law enforcement and the preservation of essential attorney-client privilege, work product and employee legal protections”. She concluded by urging all members of the bar to join in urging immediate support of a law which would end the attack upon the privilege by all federal agencies: “The time to call your Senators and Representatives is now!”
For more information on this topic, you are directed to the extensive website of the ABA devoted to ABA Privilege Waiver Materials: http://www.abanet.org/poladv/priorities/privilegewaiver/acprivilege.html
Peter Ehrlichman is a partner in the Seattle Trial Group of the international law firm DORSEY & WHITNEY LLP, with offices in 15 states and 4 nations. He serves as the King County Bar Association’s representative to the ABA House of Delegates, as well as a trustee of the King County Bar Foundation. He recently appeared as master of ceremonies of the KCBF’s annual fundraising breakfast which raised over $300,000 for minority law student scholarships and pro bono support.
