The attorney-client privilege has been under attack in this country for some time. Now, with the help of the American Bar Association and the King County Bar Association, a unique coalition — 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 — is effectively urging the Department of Justice to stop pressuring corporations to “cooperate” by waiving the privilege.
The DOJ, 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, saying, “There are many ways for government investigators to get the facts in a corporate fraud investigation. … Some 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.”
A variation on that view was recently expressed by Debra Wong Yang, former U.S. attorney for the Central District of California. “There is a benefit to the public good,” Yang said, “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.”
Overreaction to Corporate Fraud
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, Sen. 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 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 ABA President Karen Mathis presented to Specter’s committee in September 2006, the KCBA joined with other groups to express serious concern regarding the Department’s policies. In a November 27, 2006 letter 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. 1The Model Policy would limit prosecutors to requesting non-privileged information from companies as a sign of cooperation, while striking a balance with effective law enforcement.
McNulty Memorandum
In December, before he resigned in the wake of the U.S. attorney resignation scandal, McNulty 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 that 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.
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 policies are consistent with what 900 corporate counsels, in responding to a 2006 survey, believe has led to a “culture of waiver” within federal agencies, including the DOJ, the SEC and others.2
Legislation to “Protect the Privilege”
In January, 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 DOJ 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, several members of the Washington bar, who are representatives for the KCBA or WSBA to the ABA House of Delegates, attended “ABA Day in Washington.” Visits with Washington Reps. Jay Inslee, Brian Baird, Adam Smith and Jim McDermott offered a further opportunity to specifically urge support for legislative protection. Unfortunately, Sens. Patty Murray and Mary Cantwell were not available to speak to members of the Washington delegation.
In a June 4 letter to Sen. Patrick J. Leahy, now chairman of the Senate Judiciary Committee, ABA President Mathis urged immediate support for legislation like S. 186 that 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 to 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, visit the ABA’s extensive Web site devoted to 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 four 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 more than $300,000 for minority law student scholarships and pro bono support.
1 A copy of the letter may be found at the KCBA Web site at http://www.kcba.org/scriptcontent/KCBA/aboutkcba/privilege.cfm
2 See http://www.acca.com/Surveys/attyclient2.pdf.
