New DOJ Rules for White Collar Criminal Investigations
By: Gerri L. Elder
The U.S. Justice Department has recently announced new guidelines regarding the investigation of corporate crime cases.
According to a Reuters news report, the new guidelines were released in response to criticism that prosecutors commonly apply too much pressure on companies to cooperate with criminal investigations. There were also concerns that the criminal defense rights of individual defendants were being restricted.
The new rules are binding and went into effect immediately at the Justice Department, according to an announcement by U.S. Deputy Attorney General Mark Filip. Filip is hopeful that the U.S. Securities and Exchange Commission and other government agencies will also adopt the guidelines.
Filip made the announcement at a news conference at the New York Stock Exchange on August 28.
Under the new guidelines, prosecutors are not permitted to ask firms to disclose certain attorney-client privileged information. This policy will serve to protect defendants' criminal defense rights.
Two U.S. Senators and a corporate lawyers' group had called on the Justice Department to make the changes. They now say that the changes are a step in the right direction, but that there is more work to be done.
The Association of Corporate Counsel President Frederick J. Krebs released a statement saying that several other government agencies still employ policies that do not protect the attorney-client privilege.
The new rules also prohibit prosecutors from taking into consideration whether or not a company is picking up the tab for the legal fees of employees, officers or directors who are being investigated for potential white collar crimes. Prosecutors are also no longer allowed to consider whether or not a corporation has made joint defense agreements with other individuals or companies.
Filip's announcement came on the heels of a U.S. Appeals Court ruling in New York that upheld the dismissal of criminal charges against 13 former executives at accounting firm KPMG. The Court ruled that prosecutors had violated the defendants' constitutional rights regarding payment of legal fees.
The government has been widely criticized by business groups, criminal defense lawyers and legislators for threatening companies with indictment in order to coerce cooperation with criminal investigations.
Aggressive demands that companies waive attorney-client privilege or stop paying lawyer's fees for employees were among the most highly-criticized tactics. There is an increasing demand for legislation to stop these actions, rather than just a revision of the guidelines. Some legislators have taken notice and have plans to discuss the issue in the U.S. Senate Judiciary Committee.
Filip said that he does not believe that the new rules will reduce the number of cases prosecuted by the Justice Department.s He says that the department is dedicated to aggressively investigating and prosecuting crimes by both individuals and companies while still respecting people's rights.