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1 TO WAIVE OR NOT TO WAIVE: A WORD FROM COUNSEL WHO HAS BEEN ON BOTH SIDES Roscoe C. Howard, Jr. Troutman Sanders LLP 401 9 th Street, NW, Suite 1000 Washington,

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Presentation on theme: "1 TO WAIVE OR NOT TO WAIVE: A WORD FROM COUNSEL WHO HAS BEEN ON BOTH SIDES Roscoe C. Howard, Jr. Troutman Sanders LLP 401 9 th Street, NW, Suite 1000 Washington,"— Presentation transcript:

1 1 TO WAIVE OR NOT TO WAIVE: A WORD FROM COUNSEL WHO HAS BEEN ON BOTH SIDES Roscoe C. Howard, Jr. Troutman Sanders LLP th Street, NW, Suite 1000 Washington, DC Phone: – Fax:

2 2 No prohibition against a prosecutor requesting a waiver Govt. has every incentive to make that request Maximum Pressure Hobson’s Choice faced by company’s officers and directors DOJ CORPORATE CRIME POLICIES UNDER THE THOMPSON MEMO

3 3 THOMPSON MEMO EFFECT Routine request of waivers may have interfered with the truth and completeness of a subject’s internal investigation –Interviewees may withhold full information knowing that what they say may be shared with prosecutors

4 4 Issued after 3 yrs of widespread criticism from business community Judiciary Congress Removal of reference in U.S. Sentencing Guidelines MCNULTY MEMO REACTION

5 5 1)A request for waiver will be approved only where there is a legitimate need –There is no alternative source –Information will benefit government’s investigation –Completeness of voluntary disclosure –Evaluation of collateral consequences of corporate waiver MCNULTY MEMO PROVISIONS

6 6 2)The Asst. Attorney General or the Deputy Attorney General must review and issue any approvals 3)The process must be documented 4)Written notice to subject if a waiver request is approved MCNULTY MEMO PROVISIONS–

7 7 WAIVER REQUESTS Should not be routine/only in rare circumstances Most sensitive materials Not available through non-privileged means Must take preliminary investigative steps

8 8 Restrictions may level playing field for corporate defense attorneys Client and counsel can make an informed judgment whether client’s interest is served by waiver, while prosecutor goes through the steps Fewer requests for waivers made MCNULTY MEMO (FALSE) PROMISES

9 9 NOTHING HAS CHANGED McNulty Memo fails to address the government’s “culture of waiver” Government evaluation of cooperation is still linked with waiver of the privilege

10 10 Government reserves the right to penalize companies that decline to produce “factual information” that may or may not be privileged (“Category I”) Government rewards those companies that voluntarily produce information under Category I or attorney-client communications or attorney work product (“Category II”) THE WAIVER LINK

11 11 CATEGORY I v. CATEGORY II Distinctions without a difference –Internal Reports –Reports to Audit Committees –Necessarily have information from both categories In reality, the government doesn’t recognize these categories when asking for waivers

12 12 ADVANCEMENT OF ATTORNEYS’ FEES MAY STILL BE PROBLEMATIC Generally, government cannot use advancement of attorney’s fees to evaluate cooperation The exception is found in footnote 3: “In extremely rare cases, the advancement of attorneys’ fees may be taken into account when the totality of the circumstances show that it was intended to impede a criminal investigation.” –“extremely rare cases” is not defined –Type of evidence to show an intent to impede is unknown

13 13 Retention of employees without sanctions Providing information to employees about the investigation pursuant to a Joint Defense Agreement OTHER FACTORS IN WEIGHING COOPERATION

14 14 EFFECT OF MCNULTY MEMO DOJ is no longer restricting its waiver requests to merely factual information McNulty Memo formalizes procedures for penetrating attorney-client communications and attorney opinion work product –Result - further erosion of these protections

15 15 Part II of Memo states: “[A]n indictment often provides a unique opportunity for deterrence on a massive scale. In addition, a corporate indictment may result in specific deterrence by changing the culture of the indicted corporation and behavior of its employees.” Scary Proposition INIDICTMENT AS DETERRENCE?

16 16 Prosecutors will still call for requests for waivers at the outset of investigations – they will go through the process early Companies facing indictment want the benefit of waiver to appear as cooperative as possible Companies will feel coerced to waive without prosecutor’s explicit request May or may not reduce formal demands for waiver IN PRACTICE

17 17 IMPACT OF THE POLICIES The weakened attorney-client privilege and work product protection may discourage company employees from consulting with company counsel Singleton (S.D. Tex. 2006) – employee charged with obstruction for false statements in internal investigation knowing they were going to federal officials Thus, DOJ’s policies still impede the efficacy of internal compliance programs

18 18 CONSIDERATION Resist the temptation to offer automatically a waiver of privilege Consider whether it is in the best interest of the client that the waiver be delayed or withheld altogether Counsel retains written reports/provides client oral summaries –Reduces governments opportunity to exert pressure to request waiver –Client controls when and how to make written information available to the government

19 19 Age old problem - benefits of voluntary waiver remain –corporations will always consider it and –government will always press for it, whether implicitly or explicitly CONSIDERATION


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