On the Brink of a Brave New World: The Death of Privilege in Corporate Criminal Investigations

By Zornow, David M.; Krakaur, Keith D. | American Criminal Law Review, Spring 2000 | Go to article overview

On the Brink of a Brave New World: The Death of Privilege in Corporate Criminal Investigations


Zornow, David M., Krakaur, Keith D., American Criminal Law Review


I. INTRODUCTION

The sound you hear coming from the corridors of the Department of Justice is a requiem marking the death of privilege in corporate criminal investigations. Once-celebrated goals of our legal system -- the client's rights of confidentiality and freedom from self-incrimination -- are giving way to the government's powerful demands for the swift disclosure of all evidence relevant to its investigations of corporate misconduct. With this change in prosecutorial attitude, the government effectively is deputizing "Corporate America" as an arm of law enforcement at the expense of principles that lie at the core of our adversarial system of justice. As a result, a wedge has been driven between senior management and other employees as corporations rush to meet the requests of federal prosecutors for "cooperation."

In 1993, former United States Attorney General Richard Thornburgh articulated the federal government's evolving view toward white collar criminal defendants:

   You're trying to get every edge you can on those people who are devising
   increasingly more intricate schemes to rip off the public, hiring the best
   lawyers, providing the best defenses. So you're constantly pushing the edge
   of the envelope out to see if you can get an edge for the prosecution.(1)

The willingness of federal prosecutors to demand the production of privileged information from corporations is the latest manifestation in this effort to "push the edge of the envelope." Federal prosecutors are no longer content to build criminal cases by relying on the powerful tools of grants of immunity and grand jury subpoenas for non-privileged evidence. Instead, they now often insist, even at the outset of an investigation, that corporations turn over privileged communications, attorney work product, and incriminating statements from corporate employees as a condition of favorable treatment in the exercise of the prosecutor's considerable discretion. Furthermore, the government now views a corporation's failure to disclose privileged information immediately as a clandestine effort to hide the truth.

The erosion of corporate privileges by forced waivers coincides with a growing focus on corporate culpability in our criminal justice system. While prosecutions of corporations were once the exception rather than the rule, the pursuit of corporate convictions is now a primary goal of the Department of Justice. On June 16, 1999, Deputy Attorney General Eric Holder issued a memorandum, entitled "Federal Prosecution of Corporations," to all federal prosecutors ("Memorandum").(2) The Memorandum emphasizes the "great benefits" that result from the "vigorous enforcement of the criminal laws against corporate wrongdoers ... particularly in the area of white collar crime."(3) These purported benefits include "enabl[ing] the government to address and be a force for positive change of corporate culture, alter corporate behavior, and prevent, discover and punish white collar crime."(4)

Such sentiments have been building steadily since the incorporation of the Organizational Sentencing chapter into the Federal Guidelines in 1991 ("Guidelines").(5) As one United States Attorney observed, the Guidelines clearly prescribe that the best route to corporate compliance with the law is "an enforced partnership between prosecutors and corporations."(6) In the decade since the Guidelines were enacted, this phenomenon of "enforced partnership" has begun to eclipse the idea, expressed by the Supreme Court in Upjohn v. United States,(7) that the best route to corporate compliance with the law is "full and frank communication between attorneys and their [corporate] clients."(8) Corporate privileges are weakening at the very time when, given the increased focus on corporate prosecutions, such entities are in greater need of confidential legal advice than ever before.

The unpredictability that exists at the time privileged communications occur or work product is created, whether in the normal course of business or in the context of defending against a criminal investigation, creates a chilling effect that inhibits a company seeking legal advice. …

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