Prosecutors Barred – Firms Safe From Waiving Legal Privileges: Justice

Announcing a new set of guidelines and policies for federal prosecutors investigating corporate companies, the Justice department on Thursday, barred prosecutors from asking companies to turn over legally protected material or for that matter, waive their attorney- client privileges, among others.

During the Enron era, while on one hand commendable work was done by the Justice Department, in tackling corporate crime, bringing to books many fraudulent companies, executives and procedures; there was also an iota of compulsion on behalf of the prosecuting attorneys, often forcing companies to part with their private, attorney-client communications and other data considered confidential, in order to avoid prosecution.

It is this method of extracting information from the companies and making them cooperate with the government, in order to save themselves from facing charges, which actually led to the new rules being introduced.

The new rules have been introduced as a means to strike a balance between "safeguarding the attorney-client privilege" and "preserving the department's ability to investigate corporate wrongdoing effectively.", as per Deputy Attorney General Mark Filip.

"I don't think it is going to change the number or types of cases we do. We are committed very much to aggressively investigating and prosecuting crimes whether it's by individuals or companies," Filip said.

While the new guidelines are being praised by one and all, the real thing lies in the way these guidelines would finally be applied on ground. With many companies, trade groups and legal organisations strongly against the older guidelines, the new set of policies already have a strong welcome ground to stand on.

However, many groups still doubt the government for the changes made, as they feel, not only are the changes subject to change anytime; there are still many policies and ways through which companies can be compelled by prosecutors. The ABA legal trade group is one of them and it surely has reasons from the past to back this thought.

While, the Justice Department rolled out its new policies, the U.S. Court of Appeals for the Second Circuit has found that prosecutors had wrongly pressured KPMG to hold back the legal fees of 13 of its former executives. These executives had charges of concealing tax from the IRS against them. But when the objectionable act of the prosecutors came to light last year, these charges were dismissed.

With the companies cautiously happy about the new policies and prosecutors, still reviewing them, the Congress for its part, is pondering over the proposed bills, in order to make these guidelines permanent, along with provisions of applying them to other federal agencies as well.