Environmental Crimes Blog

McNulty - What Others Are Doing

On January 4, 2007, Senator Specter introduced the Attorney-Client Privilege Act of 2007 (“Act”), presumably in response to the McNulty Memorandum. The purpose of the Act is “to place on each agency clear and practical limits designed to preserve the attorney-client privilege and work product protections available to an organization and preserve the constitutional rights and other

What Others Are Saying

Cynical views that the McNulty Memorandum will not bring about any substantial change are prevalent, but certainly not universal. According to a former Assistant United States Attorney who spent twelve years with the Los Angeles United States Attorneys Office prosecuting white collar and securities fraud cases, the McNulty Memorandum “is likely to

The McNulty Memorandum – What It Does Not Do – Cont.

The impact of the McNulty Memorandum is difficult to gauge in the short term. The McNulty Memorandum provides that it was never the intention of the Department to discourage “full and candid communications between corporate employees and legal counsel.” McNulty Memorandum, at Intro. On the other hand, the DOJ appears to categorize

The McNulty Memorandum – What It Does Not Do – Cont.

The McNulty Memorandum categorizes information into Category I and Category II materials.  Despite the characterization of Category I materials as “purely factual information” related to the alleged misconduct, this may not really be the case.  For example, interview memoranda are typically core work product as they reflect the mental impressions and judgment of counsel.  The threat of disclosure of this type of exempt work product information has an adverse effect on the proper functioning of our judicial system.  It will have a potential chilling effect on witnesses and on lawyers conducting internal investigations as counsel may not explore certain areas or at least not a deeply.  Alternatively, counsel may not reduce to writing particularly sensitive material for fear it may ultimately be disclosed to the government.  Even if counsel does detail the sensitive information, counsel may be tempted do so in more cryptic, handwritten notes, rather than a typed interview memorandum.  All of these will impede a corporation’s ability to do a candid and complete internal investigation.

As a comfort, the McNulty Memorandum directs that “Category II information should only be sought in rare circumstances.”  McNulty Memorandum, at 10.  Category II information is at the heart of the attorney-client privilege and the attorney work-product exemption.  Disclosure of Category II information will undoubtedly chill communications between an attorney and the client.  It can also serve as a huge disincentive for the corporation to engage in its own investigative fact-finding mission.  Nonetheless, the McNulty Memorandum provides an exception that could threaten to swallow the rule.  Companies that “voluntarily” waive privilege are not subject to the approval process.  Voluntary waivers are favored by the DOJ.  Could informal signals from a prosecutor induce a “voluntary” waiver without the initiation of the formal approval process? 

More later.

As always, feel free to give me a call or e-mail me at walter.james@jamespllc.com

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The McNulty Memorandum – Approval Process

As to the new approval process, to the extent that there really is an approval process (as opposed to a rubber stamp), it appears on the face of the McNulty Memorandum that prosecutors can easily satisfy the requirements for obtaining Category 1 information.  As a practical matter, obtaining the United States Attorney’s approval may not be a meaningful protection for a corporation because United States Attorneys inevitably back their Assistants.  Further, the McNulty Memorandum only requires the United States Attorney to “consult” with the Assistant Attorney General of the Division.  What does that mean?  It does not appear on the face of the McNulty Memorandum that this offers corporations any meaningful protection.

More later.

As always, feel free to give me a call or e-mail me at walter.james@jamespllc.com

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The McNulty Memorandum - What It Does Not Do - Cont

While the McNulty Memorandum provides that prosecutors “generally should not take into account” whether the corporation is advancing legal fees to its employees or agents under investigation and that complying with state law and contractual obligations “cannot be considered failure to cooperate” such consideration is still permitted. McNulty Memorandum, at 11. The McNulty Memorandum does permit

The McNulty Memorandum - What It Does Not Do

The McNulty Memorandum is only a statement of DOJ policy. It does not afford the protection of statutory law (like Senator Specter’s bill, the Attorney-Client Privilege Protection Act of 2006) or decisional law (like United States v. Stein, 435 F. Supp. 2d 330, 336 (S.D.N.Y. 2006)). The McNulty Memorandum is not enforceable at law, and there is no real remedy should prosecutors choose