On August 28, 2008, Deputy Attorney General Mark R. Filip announced the implementation and immediate effectiveness of revisions to the Department of Justice’s corporate charging guidelines. These revisions, set forth in a newly created section of the United States Attorneys’ Manual, are the most recent in a series of modifications to DOJ policy regarding the factors a federal prosecutor may consider in determining whether a corporation is cooperating with the government’s investigation. Under the current and former policies, the value of the corporation’s cooperation is a potential mitigating factor in a federal prosecutor’s decision to charge the corporation or to resolve the case through non-criminal alternatives such as seeking civil or administrative remedies.
As the Manual states, there is a “contention, from a broad array of voices, that the Department’s position on attorney-client privilege and work product protection waivers has promoted an environment in which those protections are being unfairly eroded to the detriment of all.” The broad array of voices include Congress and representatives of the business and legal communities. Responding to this criticism, that prosecutors were conditioning a finding of cooperativeness on waiver of protections like the attorney-client privilege, the DOJ’s new policy narrows the discretion of prosecutors to grant or withhold credit for a corporation’s cooperation.
1. Attorney-Client and Work Product Protections
Principally, the DOJ’s new policy forbids prosecutors from penalizing corporations for refusing to provide factual materials protected by the attorney-client privilege or constituting the work product of attorneys. The DOJ’s revised policy states: “Eligibility for cooperation credit is not predicated upon the waiver of attorney-client privilege or work product protection. Instead, the sort of cooperation that is most valuable to resolving allegations of misconduct is disclosure of the relevant facts concerning such misconduct.” While a prosecutor may still request that privileged or protected factual materials be disclosed under the new policy, he or she may no longer consider the corporation’s refusal in determining cooperativeness.
With regard to non-factual communications relating to the provision of legal advice or attorney work product expressing mental impressions or legal theories, the new policy expressly prohibits prosecutors from “request[ing] the disclosure of such communications as a condition for the corporation’s eligibility to receive cooperation credit.” There are two exceptions to the general prohibition against prosecutors requesting such communications: (1) the prosecutor may request the disclosure of communications upon which a defendant relies to assert an advice-of-counsel defense; and (2) the prosecutor may request privileged or protected communications that are made in furtherance of a crime or fraud.
2. Conduct Obstructing the Government’s Investigation
The DOJ’s new policy also implements revisions to the factors a prosecutor was permitted to consider in determining that a corporation is impeding the government’s investigation under the McNulty Memo. First, “prosecutors should not take into account whether a corporation is advancing or reimbursing attorneys’ fees or providing counsel to employees, officers, or directors under investigation or indictment.” Neither can a prosecutor request that a corporation refrain from paying such fees.
Second, the new policy does not allow prosecutors to consider the existence of a joint defense agreement in determining the value of the corporation’s cooperation, or to request that the corporation refrain from making such agreements. However, the revision does caution corporations from entering into joint defense agreements that might limit their ability to provide information to the government.
Finally, a prosecutor may no longer consider whether the corporation has terminated or disciplined employees as evidence of obstructing the government’s investigation. Even where an employee has been deemed culpable by the corporation, the decision to retain that employee affects only the prosecutor’s evaluation of the corporation’s remedial measures or compliance program, not the quality of the corporation’s cooperation.
The revisions substantially modify several of the factors for determining whether a corporation should receive credit for cooperation, but it is unclear whether these revisions will in practice change the “environment in which [the attorney-client privilege and work product protections] are being unfairly eroded to the detriment of all.” There are also several ambiguities in the new policy, including whether the prosecutor determines the existence of a “legitimate need” before seeking privileged factual materials and what procedures the prosecutor must follow before making such a request. These changes to the United States Attorneys’ Manual still might not mollify critics of the DOJ’s policy or curtail Congressional attempts to enact legislation in this arena.