Corporate Prosecution Principles Resource Page

About The Corporation Prosecution Principles Resource Page

DOJ Building The Corporation Prosecution Principles Resource Page provides a library of key materials concerning criminal and civil enforcement issues involving corporations and other business organizations.

Given the importance of this issue on attorney-client privilege, work product and related evidence matters, the following tables collect many of the primary federal prosecution guidelines and associated materials concerning the corporation prosecution guidelines. Use the Quick Navigation Links below to locate key materials.

Background

U.S. Department of Justice

Since 1999, the U.S. Department of Justice has established guidelines for prosecuting corporations and other business organizations. These guidelines provide parameters for federal prosecutors and do not create any enforceable rights in parties involved in litigation with the government. The prosecution guidelines which implicate the attorney-client privilege and work product doctrine. The most recent guidelines are now part of the U.S. Attorney Manual. See U.S. Attorney’s Manual §§ 9-28.000 to 9-28.1300 (referring to the Corporation Prosecution Principles).


Judicial Review

The prior guidelines were challenged in United States v. Stein in the Southern District of New York and the Second Circuit. A portion of the prior the guidelines were found to be unconstitutional as applied, as noted below. See Stein Cases.


Congressional Action

In the past few years, Congress has held hearings concerning the application of the U.S. Department of Justice corporate prosecution guidelines (including, as noted below, on March 7, 2006, September 12, 2006, and September 18, 2007). See Congressional Hearings. Legislation has also been introduced to mandate standards “by statutorily prohibiting Federal prosecutors and investigators across the executive branch from requesting waiver of attorney-client privilege and attorney work product protections in corporate investigations.” 154 Cong. Rec. S2331-S2332 (Feb. 13, 2009) (remarks of Senator Specter upon the introduction of S. 445). For more information on the legislation, see the Attorney-Client Privilege Protection Act Blog Posts, and the Attorney-Client Privilege Protection Act Legislative History Page. As highlighted below, Congress has asked the Government Accountability Office to report on issues releated to corporate prosecutions. See GAO Reports and Testimony.


Securities and Exchange Commission

The Securities and Exchange Commission (SEC) has also provided guidance on certain factors to be considered "in determining whether, and how much, to credit self-policing, self-reporting, remediation and cooperation" involving a corporation or organization. These materials are included below. See SEC Guidelines.

Department of Justice Overview

The first Corporation Prosecution Principles were adoped by the Department of Justice in 1999. The principles have been promulgated by four Deputy Attorneys General, and have been informally known by each author, including the Filip Memo, the McNulty Memo, the Thompson Memo, and the Holder Memo. Deputy Attorney General Mark R. Filip added the principles to the U.S. Attorney’s Manual §§ 9-28.000. The history of these guidelines, along with related congressional action about specific DOJ memoranda, are noted below. The guidelines include nine specific factors. See DOJ Corporation Prosecution Principles: Nine Factors.
Date Department Of Justice Memoranda/Guidelines/Letters
June 4, 2009

Remarks of Deputy Attorney General David W. Ogden at the Compliance Week Keynote Address, Washington, D.C.

  • Noting the Department of Justice has taken "significant steps to address issues of attorney-client privilege, advancement of attorney fees, and cooperation credit in criminal cases"
  • Under the August 2008 "Principles for the Federal Prosecution of Business Organizations," the "principles make clear that the attorney-client privilege and attorney work-product protection are essential and long-recognized components of the American legal system, and that federal prosecutors shall not infringe upon these protections in the course of corporate criminal investigations. The revised principles strike the proper balance between the interest in obtaining relevant information while respecting the privilege, by calling for the evaluation of cooperation efforts based on the information provided rather than on a waiver of the privilege."

Aug. 28, 2008

Deputy Attorney General Mark Filip announces revisions to Department of Justice guidelines regarding Principles of Federal Prosecution of Business Organizations (known as the "Filip Memorandum"); see also U.S. Attorney’s Manual §§ 9-28.000 to 9-28.1300 (referring to the Corporation Prosecution Principles).

  • Revising the prior Principles of Federal Prosecution of Business Organizations (known as the "Filip Memorandum"), noting “the principal revisions to the Principles concern what measures a business entity must take to qualify for the long-recognized ‘cooperation’ mitigating factor, as well as how payment of attorneys’ fees by a business organization for its officers or employees, or participation in a joint defense or similar agreement, will be considered in the prosecutive analysis. Much of the remainder of the Principles is unchanged.”
  • For the first time, the Corporation Prosecution Principles are included in the United States Attorneys’ Manual. See U.S. Attorney’s Manual §§ 9-28.000 to 9-28.1300.
July 10, 2008

Letter of Senator Arlen Specter to Deputy Attorney General Mark Filip Regarding The Corporate Attorney-Client Privilege

  • Expressing concern about further delays and noting some of the recommended changes were "unsatisfactorily vague"
  • Requesting a copy of a “Filip Memorandum” as soon as possible so that further action would not be delayed
July 10, 2008

Comment Of Senator Patrick Leahy (D-Vt.), Chairman, Senate Judiciary Committee, On Deputy Attorney General Mark Filip’s Letter Regarding The Corporate Attorney-Client Privilege

  • Welcoming the Department's "serious analysis" and effort "to make substantive changes to its policy"
  • Noting his desire to study the suggestions and looking forward to the pending memorandum reflecting the changes
July 9, 2008

Letter of Deputy Attorney General Mark Filip to Senators Patrick J. Leahy and Arlen Specter

Discouraging any legislative action and requested a reasonable period to implement five key changes in department policy:

  • Cooperation will be measured by the extent to which a corporation discloses relevant facts and evidence, not its waiver of privileges.
  • Federal prosecutors will not demand the disclosure of "Category II" information as a condition for cooperation credit.
  • Federal prosecutors will not consider whether the corporation has advanced attorneys’ fees to its employees in evaluating cooperation.
  • Federal prosecutors will not consider whether the corporation has entered into a joint defense agreement in evaluating cooperation.
  • Federal prosecutors will not consider whether the corporation has retained or sanctioned employees in evaluating cooperation.
June 20, 2008

Letter of 33 former U.S. Attorneys to Senate Judiciary Committee Chairman Patrick Leahy in support of reform legislation, S. 186, introduced by Senator Specter on January 4, 2007

"The 2006 McNulty Memorandum, which was heralded as a much-needed fix to the 2003 "Thompson Memorandum", is inadequate for a number of reasons. First, the Memo provides for oversight of privilege waiver requests by the U.S. Attorney or Main Justice. However, a report written by the Honorable E. Norman Veasey, former Chief Justice of the state of Delaware, found that prosecutors in the field are still requesting or demanding privilege waivers without the supervision required by the McNulty Memorandum. Second, the McNulty Memorandum does not cover other federal agencies, including the SEC, HUD, FCC, EPA, and others, all of which have issued policies requiring waiver in exchange for cooperation. Legislation that covers all federal agents and agencies is thus needed to ensure compliance across the board."
March 7, 2008

Memorandum of Acting Deputy Attorney General Craig S. Morford on the Selection and Use of Monitors in Deferred Prosecution Agreements and Non-Prosecution Agreements with Corporations

Sept. 18, 2007

Examining Approaches to Corporate Fraud Prosecutions and the Attorney-Client Privilege Under the McNulty Memorandum, Hearing before the Senate Judiciary Committee, 110th Cong., 1st Sess. (Sept. 18, 2007) (Serial No. J–110–55)

Witnesses:

  • Karin Immergut, United States Attorney, District of Oregon, Department of Justice, and Chair, White Collar Subcommittee for the Attorney General’s Advisory Committee, Portland, Oregon
  • Daniel Richman, Professor, Columbia Law School, New York, New York
  • Michael Seigel, Professor, University of Florida Fredric G. Levin College of Law, Gainesville, Florida
  • Dick Thornburgh, former Attorney General of the United States and Of Counsel, K&L Gates, Washington, D.C.
  • Andrew Weissmann, Partner, Jenner & Block, New York, New York
March 8, 2007

The McNulty Memorandum's Effect on the Right to Counsel in Corporate Investigations, Hearing before the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security, 110th Cong., 1st Sess. (March 8, 2007) (Serial No. 110-24)

Witnesses:

  • Barry M. Sabin, Deputy Assistant Attorney General, U.S. Department of Justice, Washington, DC
  • Andrew Weissmann, Partner, Jenner and Block, New York, NY
  • William M. Sullivan, Jr., Partner, Winston and Strawn, LLP, Washington, DC
  • Karen J. Mathis, President, American Bar Association, Chicago, IL
  • Richard T. White, Senior Vice President, Secretary, and General Counsel, The Auto Club Group, Dearborn, MI
Dec. 12, 2006

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) (known as the "McNulty Memorandum")

Sept. 12, 2006

The Thompson Memorandum’s Effect on the Right to Counsel in Corporate Investigations, Hearing before the Senate Judiciary Committee, 109th Cong., 2d Sess. (Sept. 12, 2006) (Serial No. J–109–108)

Witnesses:

  • Thomas J. Donohue, President and Chief Executive Officer, U.S. Chamber of Commerce, Washington, D.C.
  • Karen J. Mathis, President, American Bar Association, Chicago, Illinois
  • Paul J. McNulty, Deputy Attorney General, Department of Justice, Washington, D.C.
  • Edwin Meese, III, former Attorney General, Ronald Reagan Distinguished Fellow in Public Policy, and Chairman, Center for Legal and Judicial Studies, The Heritage Foundation, Washington, D.C.
  • Mark B. Sheppard, Partner, Sprague & Sprague, Philadelphia, Pennsylvania
  • Andrew Weissmann, Partner, Jenner & Block, LLP, New York, New York
Sept. 5, 2006

Letter from Former Attorneys General, Deputy Attorneys General, and Solicitor Generals to Attorney General Alberto Gonzalez (Sept. 5, 2006)

"[W]e believe that the "Thompson Memorandum" is seriously flawed and undermines, rather than enhances, compliance with the law and the many other societal benefits that arise from the confidential attorney-client relationship. Therefore, we urge the Department to revise its policy to state affirmatively that waiver of attorney-client privilege and work-product protections should not be a factor in determining whether an organization has cooperated with the government in an investigation."
March 7, 2006

White Collar Enforcement: Attorney-Client Privilege And Corporate Waivers, Hearing before the House Judiciary Subcommittee On Crime, Terrorism, and Homeland Security, 109th Cong., 2d Sess. (March 7, 2006) (Serial No. 109–112)

Witnesses:

  • Robert D. McCallum, Jr., Associate Attorney General, U.S. Department of Justice
  • Honorable Dick Thornburgh, Kirkpatrick & Lockhart Nicholson Graham LLP
  • Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce
  • William M. Sullivan, Jr., Litigation Partner, Winston & Strawn, LLP
Oct. 21, 2005

Memorandum from Acting Deputy Attorney General Robert D. McCallum, Jr. entitled Waiver of Corporate Attorney-Client and Work Product Protections (Oct. 21, 2005) (known as the "McCallum Memorandum"); see also Statement Of Robert D. Mccallum, Jr., Before The House Judiciary Subcommittee (March 7, 2006) (discussing written waiver review process requirement)

  • Memorandum directing United States Attorneys "to establish a written waiver review process"
Jan. 20, 2003

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) (known as the "Thompson Memorandum")

June 16, 1999

Initial DOJ Corporation Prosecution Guidelines

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) (known as the "Holder Memorandum")

  • Setting forth nine factors to be considered in deciding whether to charge a corporation or other business organization:
  • "In conducting an investigation, determining whether to bring charges, and negotiating plea agreements, prosecutors should consider the following factors in reaching a decision as to the proper treatment of a corporate target:

    1. The nature and seriousness of the offense, including the risk of harm to the public, and applicable policies and priorities, if any, governing the prosecution of corporations for particular categories of crime;
    2. The pervasiveness of wrongdoing within the corporation, including the complicity in, or condonation of, the wrongdoing by corporate management;
    3. The corporation's history of similar conduct, including prior criminal, civil, and regulatory enforcement actions against it;
    4. The corporation's timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents, including, if necessary, the waiver of the corporate attorney-client and work product privileges;
    5. The existence and adequacy of the corporation's compliance program;
    6. The corporation's remedial actions, including any efforts to implement an effective corporate compliance program or to improve an existing one, to replace responsible management, to discipline or terminate wrongdoers, to pay restitution, and to cooperate with the relevant government agencies;
    7. Collateral consequences, including disproportionate harm to shareholders and employees not proven personally culpable;
    8. The adequacy of non-criminal remedies, such as civil or regulatory enforcement actions.

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Judicial Review

In 2006, U.S. District Court Judge Lewis Kaplin, of the Southern District of New York, issued a series of decisions which resulted in the dismissal of an indictment involving former KPMG employees involving allegedly abusive tax shelters based on application of the "Thompson Memorandum" to the facts of the case. The Second Circuit affirmed the dismissal on appeal.
DateCases
June 26, 2006United States v. Stein, 435 F. Supp.2d 330, 382 (S.D.N.Y 2006) ("Stein I") ("The Court declares that so much of the Thompson Memorandum and the activities of the USAO as threatened to take into account, in deciding whether to indict KPMG, whether KPMG would advance attorneys’ fees to present or former employees in the event they were indicted for activities undertaken in the course of their employment interfered with the rights of such employees to a fair trial and to the effective assistance of counsel and therefore violated the Fifth and Sixth Amendments to the Constitution.")
July 25, 2006

United States v. Stein, 440 F. Supp.2d 315, 334-35, 338 (S.D.N.Y 2006) ("Stein II") ("The Thompson Memorandum, moreover, made it clear that a company's failure to ensure that its employees disclose whatever they knew, regardless of their individual rights and concerns, might weigh in favor of indicting the company. The USAO knew that KPMG would apply additional pressure, beyond the threatened cut-off of legal fees, to "uncooperative" employees. Indeed, it reported them to KPMG in circumstances in which there was no conceivable reason for doing so except to facilitate the firing threats that ensued."; suppressing statements obtained under the Thompson Memorandum)

July 16, 2007

United States v. Stein, 495 F. Supp. 2d 390, 427-28 (S.D.N.Y. 2007) ("Stein IV") (dismissing indictment based on constitutional violations; "The Department of Justice, in promulgating the aspects of the Thompson Memorandum here at issue, and the USAO in the respects discussed above and in Stein I, deliberately or callously prevented many of these defendants from obtaining funds for their defense that they lawfully would have had absent the government's interference. They thereby foreclosed these defendants from presenting the defenses they wished to present and, in some cases, even deprived them of counsel of their choice. This is intolerable in a society that holds itself out to the world as a paragon of justice. The responsibility for the dismissal of this indictment as to thirteen defendants lies with the government.")

Aug. 28, 2008

United States v. Stein , 541 F.3d 130, 135 & n.1 (2d Cir. 2008) ("Stein V") (Circuit "hold[ing] that the government thus 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. Because no other remedy will return defendants to the status quo ante, we affirm the dismissal of the indictment as to all thirteen defendants.")

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Securities and Exchange Commission

The Securities and Exchange Commission has issued guidance related to civil enforcement issues. In January 2010, the SEC announced a new initiative to encourage individuals and companies to cooperate and assist in investigations.
DateSecurities and Exchange Commission Guidelines
Jan. 13, 2010

SEC Initiative to Encourage Individuals and Companies to Cooperate and Assist in Investigations

Jan. 13, 2010

Updated "Red Book," Enforcement Manual, Securities and Exchange Commission, Division of Enforcement

Oct. 23, 2001

"Seaboard Report," officially entitled, "Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934 and Commission Statement on the Relationship of Cooperation to Agency Enforcement Decisions," Exchange Act Release No. 44969

Setting forth thirteen factors to be considered "in determining whether, and how much, to credit self-policing, self-reporting, remediation and cooperation" involving a corporation or organization:

    1. What is the nature of the misconduct involved?
    2. How did the misconduct arise?
    3. Where in the organization did the misconduct
    4. How long did the misconduct last?
    5. How much harm has the misconduct inflicted upon investors and other corporate constituencies?
    6. How was the misconduct detected and who uncovered it?
    7. How long after discovery of the misconduct did it take to implement an effective response?
    8. What steps did the company take upon learning of the misconduct?
    9. What processes did the company follow to resolve many of these issues and ferret out necessary information?
    10. Did the company commit to learn the truth, fully and expeditiously?
    11. Did the company promptly make available to our staff the results of its review and provide sufficient documentation reflecting its response to the situation?
    12. What assurances are there that the conduct is unlikely to recur?
    13. Is the company the same company in which the misconduct occurred, or has it changed through a merger or bankruptcy reorganization?

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Congressional Hearings

Congress has held the following hearings to examine the impact of the corporate prosecution principles.
Date Congressional Hearings
Sept. 18, 2007

Examining Approaches to Corporate Fraud Prosecutions and the Attorney-Client Privilege Under the McNulty Memorandum, Hearing before the Senate Judiciary Committee, 110th Cong., 1st Sess. (Sept. 18, 2007) (Serial No. J–110–55)

Witnesses:

  • Karin Immergut, United States Attorney, District of Oregon, Department of Justice, and Chair, White Collar Subcommittee for the Attorney General’s Advisory Committee, Portland, Oregon
  • Daniel Richman, Professor, Columbia Law School, New York, New York
  • Michael Seigel, Professor, University of Florida Fredric G. Levin College of Law, Gainesville, Florida
  • Dick Thornburgh, former Attorney General of the United States and Of Counsel, K&L Gates, Washington, D.C.
  • Andrew Weissmann, Partner, Jenner & Block, New York, New York
March 8, 2007

The McNulty Memorandum's Effect on the Right to Counsel in Corporate Investigations, Hearing before the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security, 110th Cong., 1st Sess. (March 8, 2007) (Serial No. 110-24)

Witnesses:

  • Barry M. Sabin, Deputy Assistant Attorney General, U.S. Department of Justice, Washington, DC
  • Andrew Weissmann, Partner, Jenner and Block, New York, NY
  • William M. Sullivan, Jr., Partner, Winston and Strawn, LLP, Washington, DC
  • Karen J. Mathis, President, American Bar Association, Chicago, IL
  • Richard T. White, Senior Vice President, Secretary, and General Counsel, The Auto Club Group, Dearborn, MI
Sept. 12, 2006

The Thompson Memorandum’s Effect on the Right to Counsel in Corporate Investigations, Hearing before the Senate Judiciary Committee, 109th Cong., 2d Sess. (Sept. 12, 2006) (Serial No. J–109–108)

Witnesses:

  • Thomas J. Donohue, President and Chief Executive Officer, U.S. Chamber of Commerce, Washington, D.C.
  • Karen J. Mathis, President, American Bar Association, Chicago, Illinois
  • Paul J. McNulty, Deputy Attorney General, Department of Justice, Washington, D.C.
  • Edwin Meese, III, former Attorney General, Ronald Reagan Distinguished Fellow in Public Policy, and Chairman, Center for Legal and Judicial Studies, The Heritage Foundation, Washington, D.C.
  • Mark B. Sheppard, Partner, Sprague & Sprague, Philadelphia, Pennsylvania
  • Andrew Weissmann, Partner, Jenner & Block, LLP, New York, New York
March 7, 2006

White Collar Enforcement: Attorney-Client Privilege And Corporate Waivers, Hearing before the House Judiciary Subcommittee On Crime, Terrorism, and Homeland Security, 109th Cong., 2d Sess. (March 7, 2006) (Serial No. 109–112)

Witnesses:

  • Robert D. McCallum, Jr., Associate Attorney General, U.S. Department of Justice
  • Honorable Dick Thornburgh, Kirkpatrick & Lockhart Nicholson Graham LLP
  • Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce
  • William M. Sullivan, Jr., Litigation Partner, Winston & Strawn, LLP

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Government Accountability Office

The Government Accountability Office, considered "the investigative arm of Congress", has released the following reports and testimony on corporation prosecution issues.
DateGovernment Accountability Office Reports and Testimony
Dec. 18, 2009

GAO Report: Corporate Crime: DOJ Has Taken Steps to Better Track Its Use of Deferred and Non-Prosecution Agreements, but Should Evaluate Effectiveness

House Judiciary Committee Press Release: Judiciary Chairmen Release GAO Report on Criminal Corporate Settlement Agreements

Nov. 19, 2009

GAO Testimony: Corporate Crime: Prosecutors Adhered to Guidance in Selecting Monitors for Deferred Prosecution and Non-Prosecution Agreements, but DOJ Could Better Communicate Its Role in Resolving Conflicts, Testimony Before the House Judiciary Subcommittee on Commercial and Administrative Law

June 25, 2009

GAO Testimony: Corporate Crime: Preliminary Observations on DOJ’s Use and Oversight of Deferred Prosecution and Non-Prosecution Agreements, Testimony Before the House Judiciary Subcommittee on Commercial and Administrative Law

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Federal Rules of Evidence
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