DOJ: ‘No, No, Don’t Worry About It, Senator. We’ll Fix the McNulty Memo.’

[WSJ_law_blog]

At long last, there might be some movement on the McNulty Memo front. Michael Mukasey, the DOJ’s fearless leader, pow-wowed yesterday on the topic with the Senate Judiciary Committee at a so-called oversight hearing.

Here’s the backstory: Three weeks ago, 33 former U.S. attorneys sent a letter to Vermont Senator Patrick Leahy, the chair of the judiciary committee, urging him to hold a vote on the Attorney Client Privilege Protection Act of 2007, which, they claim, would put an end to the DOJ’s “widespread practices and policies that pressure businesses to waive the attorney-client privilege in return for avoiding a harsher charging decision.” Under the 2006 McNulty Memo, they argue, prosecutors can demand that a business waive the privilege in regard to communications between company counsel and employees in return for leniency for the company. (See, e.g., KPMG)

In an apparent attempt to forestall legislation, Mukasey offered this olive branch: He said that the McNulty Memo, which is used by prosecutors to help determine when companies are deemed to be cooperating with an investigation, is likely to be replaced by a new set of guidelines for the handling of attorney-client privilege in corporate fraud investigations. Here’s a report on the hearing from the Legal Times.

Mukasey told the committee that that Deputy AG Mark Filip (Paul McNulty’s successor) is drafting a letter to Arlen Specter — the ranking minority member who’s sponsoring the attorney-client privilege legislation — addressing “real significant proposed changes” to the McNulty Memorandum. “There’s no such as thing as a memo that achieves perfection. … There are adjustments in the McNulty memo that can and will be made,” Mukasey said. “In particular, we will no longer measure cooperation by waiver of the attorney-client privilege.”

In Fillip’s letter, which the WSJ reports arrived at Specter’s office after the hearing, he told the senators that the revisions, to be issued in the next several weeks, are restrictions preventing prosecutors from asking companies under investigation to disclose certain attorney-client privileged information. And in evaluating a company’s cooperation, prosecutors wouldn’t be allowed to consider whether a company is paying legal fees of employees under investigation, or whether a company has entered into joint defense agreements with employees. “I have come to the conclusion that the above changes to the Principles are preferable to any legislation, however well-intentioned and diligently drafted, that would seek to address the same core set of issues,” wrote Fillip.

Photo: Associated Press