DOJ claims McNulty memo no longer in effect

U.S. Attorney General Michael Mukasey recently told a Senate panel the Justice Department has replaced the controversial “McNulty memorandum” – which outlines federal prosecutors’ ability to encourage corporate defendants to waive the attorney-client privilege in order to cut a better plea deal.
But attorneys representing corporations say they will believe the policy change when they see it – and so far, they say nothing has changed.
At the recent hearing, Pennsylvania Sen. Arlen Specter, the committee’s ranking Republican, questioned Mukasey on the issue of the attorney-client privilege and the document authored by Deputy Attorney General Paul J. McNulty.
“How can you reconcile or justify this sort of conduct by the Department of Justice to prove its cases?” Specter asked Mukasey.
“I don’t justify or reconcile or encourage or condone any coercion of anybody to waive the attorney-client privilege,” Mukasey said. “And I think we’ve made that clear – I hope we’ve made it clear – to our prosecutors.”
Mukasey said he has replaced the McNulty memorandum with a new policy.
“We have put in place another memorandum relating to the question of when it is that information can be sought,” Mukasey testified. “Prosecutors need to basically raise their hands and say, ‘May I?’ They need to approach the department and ask whether there is information they can seek that may be considered privileged.”
Mukasey said during his tenure no prosecutor has requested a waiver of the attorney-client privilege.
“Corporations have been allowed, if they wanted to, to come forward and ask for that as a consideration for avoiding indictment, which they want to do,” Mukasey said. “And to say that they can’t do that is to … deny them the right to be the judge of what’s good for them. I don’t think that’s advisable, either.”
But Susan Hackett, senior vice president and general counsel for the Association of Corporate Counsel in Washington, D.C., said Mukasey’s testimony didn’t convince her of a change in tide at the DOJ.
“I don’t read his statement as suggesting there is new policy in place,” Hackett said. “I read his comments to say they were working on the McNulty memo to try to ensure that before [prosecutors could seek waivers they] had to ask for permission.”
But even if the DOJ has changed its policy, Hackett said she fears the federal prosecutors will likely continue their practice of pushing for privilege waivers – making it harder for corporate counsel to do their jobs.
“Lawyers can’t do their job effectively if they don’t have a relationship of trust with employees who feel when they come to the lawyer the company would protect that confidentiality,” she said.
Hackett took issue with Mukasey’s assertion there have been no privilege waiver requests during his tenure.
“People in my coalition are saying they have happened,” Hackett said. “They have counted [at least] five or six times” the DOJ has had requests for privilege waivers.
She said the problem likely won’t go away until Congress passes legislation barring the use of waivers as bargaining incentives.
In November, the House passed the “Attorney-Client Privilege Protection Act of 2007,” H.R. 3013, banning federal prosecutors from demanding that corporations waive the attorney-client privilege, and preventing them from using the companies’ decision as a factor in determining whether to indict. The measure also would bar prosecutors from making a corporation submit its attorneys’ litigation materials.
A similar bill, S. 186, sponsored by Specter, was introduced in the Senate last year, but has not advanced.