Washington, DC, Nov. 14, 2007 – The U.S. House of Representatives took an immensely important step yesterday by approving H.R. 3013, the Attorney-Client Privilege Protection Act of 2007.  

The bipartisan bill, introduced by Rep. Bobby Scott (D-VA) and cosponsored by 11 other members from both parties, would roll back the harmful federal government policies that erode fundamental attorney-client privilege, work product, and employee legal protections.  The American Bar Association applauds Rep. Scott, Rep. Randy Forbes (R-VA) and the rest of the bipartisan leadership that advanced this legislation in the House, and urges the Senate to act swiftly on its own similar measure, S. 186, sponsored by Sen. Arlen Specter (R-PA).

The legislation strikes the proper balance between the legitimate needs of federal prosecutors and regulators and the constitutional and fundamental legal rights of individuals and organizations.  Confidential communications protected by the privilege are essential to enable lawyers to counsel their clients about how to comply with the law, to investigate potential problems when concerns arise and to guide clients in rectifying mistakes or misconduct they may find.

Protecting confidential attorney-client communications from government-compelled disclosure fosters voluntary compliance with the law.  Government tactics that coerce disclosure, on the other hand, undermine this benefit and our adversarial system of justice, and can threaten the very survival of organizations, including even the largest, most robust corporations.  In addition, government policies that pressure companies to refuse to provide employees with legal assistance while investigations are pending or to fire them for asserting their Fifth Amendment rights weaken the constitutional presumption of innocence and undermine principles of sound corporate governance.  The ripple effect harms employees, investors and all of society. 

Media Contact: Nancy Cowger Slonim, 312/988-6132,




The following article ran yesterday on The Blog of Legal Times, and beneath it is one from Daily Deal:

DOJ Critics Praise House Bill on Attorney-Client Rights

Department of Justice officials are none too happy now that the House has passed a bill that limits federal prosecutors’ ability to seek material covered by a corporation’s attorney-client privilege.

H.R. 3013 cleared the House yesterday while its companion bill in the Senate, S. 186: Attorney-Client Privilege Protection Act of 2007, is in the Senate Judiciary Committee awaiting mark-up. The Senate committee last held a hearing on the bill on Sept. 18.

Peter Carr, the Justice Department’s deputy director for public affairs, says the legislation is unnecessary because DOJ guidelines already limit government requests for privileged work. Other DOJ officials also wrote to lawmakers that the bill will hamper cases where privilege waivers could speed up investigations and will undermine other federal agencies’ efforts.

“The bill…imposes a flat prohibition on government requests for information in corporate white-collar cases simply because the corporation asserts that the information is protected by the attorney-client privilege or the work product doctrine,” Carr says. “In December 2006, the Department implemented the McNulty Memorandum which establishes a rigorous approval process for requests of waivers of attorney-client privilege for cooperating corporations.”

Critics of the McNulty memo, which revised previous DOJ directives on the subject, welcome the bill’s passage. The Association of Corporate Counsel says “prosecutors are not above the law or the Constitution,” and it will now focus its efforts on lobbying the Senate.

“Current DOJ and enforcement agency policies and practices continue to erode the attorney-client privilege and place untenable pressure on companies and employees to waive basic constitutional rights guaranteed to every person targeted in government investigations,” says a statement by the Coalition to Preserve the Attorney-Client Privilege.

The American Bar Association also chimes in: “The legislation strikes the proper balance between the legitimate needs of federal prosecutors and regulators and the constitutional and fundamental legal rights of individuals and organizations.”


House to protect confidentiality Daily Deal/The Deal November 15, 2007 Thursday


Copyright 2007 The Deal, L.L.C.
Daily Deal/The Deal

November 15, 2007 Thursday


LENGTH: 711 words

HEADLINE: House to protect confidentiality

BYLINE: by Bill McConnell in Washington


The bill shores up the attorney-client privilege during corporate fraud investigations.


The House of Representatives passed legislation Tuesday, Nov. 13, aimed at shoring up the rights of companies and their employees to preserve the confidentiality of communications with their lawyers during corporate fraud investigations.

The Attorney-Client Privilege Protection Act of 2007 passed on a voice vote and would prohibit federal prosecutors from pressuring organizations to waive their attorney-client privilege or to turn over notes and other work products to investigators.

Rep. Bobby Scott, D-Va., is the bill’s sponsor. Sen. Arlen Specter, R-Pa., has sponsored companion legislation in the Senate.

Prosecutors would be barred from pressuring organizations not to pay their employees’ legal fees during investigations, to fire employees for not waiving their rights or to take other punitive actions before an individual’s guilt has been established.

The legislation is the result of complaints from businesses, along with legal and civil liberties groups, that federal prosecutors over the past four years have bullied companies and employees into waiving their Fifth Amendment right to confidential communications with their lawyers. Prosecutors obtain the waivers by threatening to use their authority to file criminal charges against companies and as a result embroil them into expensive legal tangles for years, supporters of the legislation say.

The dispute originated after a 2003 memo from then-U.S. Deputy Attorney General Larry Thompson spelled out procedures for federal prosecutors investigating suspected financial crimes. In response to the Enron Corp.   scandal, Thompson told prosecutors to put more weight on companies’ cooperation with government investigators when deciding whether to bring charges.

Thompson wrote that the assessment of a company’s level of cooperation should include its willingness to waive the attorney-client privilege and provide corporate documents pertaining to the investigation. Companies were also being judged on their willingness to restrict payment of legal fees of employees under investigation. Companies also would get points for firing employees who refuse to waive their individual Fifth Amendment rights.

In response to a rising outcry, Thompson’s successor, Paul McNulty, in December 2006 unveiled two major changes to the guidance. First, payment of employees’ legal fees no longer was to be considered when judging a company’s cooperation level. Second, local prosecutors were barred from asking companies to waive confidentiality rights without first seeking approval from a deputy attorney general in Washington.

Even with McNulty’s changes, critics said the policies gave prosecutors too much power to demand that companies waive their constitutional rights. For companies under investigation, being viewed as cooperative and closing an inquiry as soon as possible is imperative. A lingering investigation can cripple a company’s ability to conduct business and retain employees and could even be a death sentence.

For example, Chicago accounting firm Arthur Andersen LLP lost much of its business in 2001 due to a Department of Justice probe of the firm’s work for Enron.   The firm was later found guilty of obstructing justice by shredding documents relating to the Enron   fiasco in June 2002. Three years later, the Supreme Court threw out the firm’s conviction on the single charge — too late for Arthur Andersen, though.

The government’s tactics suffered another blow in June 2006, when Judge Lewis Kaplan of the Southern District of New York ruled that federal prosecutors wrongly pressured accounting firm KPMG LLP not to pay legal fees of former partners charged with creating an illegal tax shelter. Kaplan also dismissed indictments against 13 individual defendants.

The Coalition to Preserve the Attorney-Client Privilege praised the House Tuesday for voting “to stop Justice Department abuses of power and force federal prosecutors to simply follow rules that will no longer place untenable pressure on companies and employees to waive basic constitutional rights guaranteed to every person targeted in government investigations.”

Coalition members include the American Civil Liberties Union, the American Bar Association, the Association of Corporate Counsel and other business organizations.


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