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U.S. Justice Dept. to Ease Legal Tactics Against Corporations

The Justice Department has agreed to ease its tough legal tactics against scandal-tainted corporations, requiring prosecutors to get approval from Washington before seeking confidential information...
December 21, 2006

The Justice Department has agreed to ease its tough legal tactics against scandal-tainted corporations, requiring prosecutors to get approval from Washington before seeking confidential information between firms and their lawyers.  Under the new policy, the government no longer can penalize corporations that pay attorneys' fees for their employees - which some prosecutors have viewed as a sign of not cooperating with their investigation.

In a New York speech to the Lawyers for Civil Justice, Deputy Attorney General Paul McNulty vowed to "safeguard every tool prosecutors need to fight fraud and continue our aggressive efforts in rooting out corruption in our financial markets to protect the interests of the investing public." Still, McNulty said, the Justice Department "supports the sanctity of attorney-client privilege. We encourage full and frank communication between corporate employees and their lawyers."

The shift comes after complaints - led by a coalition of conservative and liberal legal experts alike - that the Justice Department was unfairly pressuring companies and employees to cooperate in investigations. Outgoing Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) tried to increase pressure on the Justice Department to drop what he described as the coercive and unconstitutional tactics used against companies in criminal investigations. Hours before Congress was to leave for the year, Specter filed legislation that would prohibit prosecutors from unduly pressuring companies to cooperate in such cases. Specter was flanked at a news conference last week by former Attorney General Richard Thornburgh and officials from both the U.S. Chamber of Commerce and the American Civil Liberties Union.

Justice Pressured to Ease Corporate Scandal Tactics (Insurance Journal 12/13/06)