Revised DOJ Corporate Prosecution Guidelines Issued

With this substitute for the McNulty Memo, questions remain whether Congress will pass reform legislation

As recently posted, Attorney General Mukasey and Deputy Attorney General Mark Filip told the Senate Judiciary Committee in July that modifications were being considered to the Principles of Federal Prosecution of Business Organizations guidelines, known as the McNulty Memorandum in its most recent formulation. On August 28, 2008, Deputy Attorney General Filip released the new DOJ revisions regarding Principles of Federal Prosecution of Business Organizations.

Most of the DOJ standards remain the same. See Remarks of Deputy Attorney General Filip; Press Release. However, there are some changes. First, the guidelines have been incorporated into the U.S. Attorney’s Manual as Sections 9-28.000 to 9-28.1300. Other changes include factors to consider in assessing the value of cooperation by a corporation. The corporation may voluntarily share information protected by the attorney-client privilege or work product doctrine, but prosecutors may not ask for such waivers. Prosecutors may not consider whether a corporation is advancing fees or providing counsel to its employees within the scope of the investigation.

The new guidelines follow a series of Deputy Attorney General Memoranda on the issue of corporate prosecution guidelines, including:

  • Memorandum from Deputy Attorney General Eric H. Holder, Jr. to Heads of Department Components and U.S. Attorneys, Bringing Criminal Charges Against Corporations (June 16, 1999) (“Holder Memo”)
  • Memorandum from Deputy Attorney General Larry Thompson to Heads of Department Components and U.S. Attorneys, Principles of Federal Prosecution of Business Organizations (Jan. 20, 2003) (“Thompson Memo”)
  • Memorandum from Deputy Attorney General Paul J. McNulty to Heads of Department Components and U.S. Attorneys, Principles of Federal Prosecution of Business Organizations (Dec. 12, 2006) (“McNulty Memo”)

Ironically, the new DOJ guidelines were released the same day that the U.S. Court of Appeals for the Second Circuit issued an opinion affirming the dismissal of an indictment against thirteen corporate officers and employees in the KMPG case. The Second Circuit held that “that the government … unjustifiably interfered with defendants’ relationship with counsel and their ability to mount a defense, in violation of the Sixth Amendment, and that the government did not cure the violation.” See United States v. Stein, 541 F.3d 130 (2d Cir. Aug. 28, 2008) (No. 07-3042-cr).

As two recent posts on S. 3217 and on H.R. 3013 demonstrate, pending legislation has separately passed the House of Representatives and Senate concerning the attorney-client privilege and its role in corporate prosecutions. A key question posed by the new DAG Filip guidelines is whether congressional interest in enacting legislation will continue?

Federal Rules of Evidence
PDF