CORPORATE CRIME REPORTER
Andrew
Weissmann Calls for Revision of Thompson Memo, Rethinking of Corporate Criminal
Liability
20 Corporate Crime Reporter 36(1), September 11, 2006
Tomorrow’s hearing
before the Senate Judiciary Committee – “The Thompson Memorandum’s
Effect on the Right to Counsel in Corporate Investigations” – was
scheduled to be a predictable affair.
Former Attorney General Edwin Meese will say – as he and other former
Justice Department officials said in a letter
last week – that the Thompson memo is fatally flawed and should be revised
“to state affirmatively that waiver of attorney-client privilege and work
product protections should not be a factor in determining whether an organization
has cooperated with the government in an investigation.”
Similarly, Thomas Donahue, the President of the U.S. Chamber of Commerce, will
say, as he has said before the House Judiciary Committee, that the Thompson
memo needs to be revamped.
And the Justice Department, represented by Paul McNulty – will defend
the Thompson memo to the degree that it can – in the face of the onslaught
by the white collar defense bar and Judge Lewis Kaplan’s two recent rulings
in the KPMG tax shelter prosecutions that the government, by pressuring KPMG
to cut off the payment of legal fees to the individual KPMG defendants, violated
the Fifth Amendment due process clause and the Sixth Amendment right to counsel.
The wild card in the deck was Andrew Weissmann, the former head of the Enron
Task Force, the prosecutor – some say executioner – of Arthur Andersen
– who joined Jenner & Block in New York earlier this year.
Wild card no more.
In his prepared testimony
– a copy of which was obtained by Corporate Crime Reporter –
Weissmann will call for a revision of the Thompson memo and a “rethinking
of corporate criminal liability.”
The Thompson memo “should be revised so that it no longer encourages an
environment where employees risk losing their jobs or legal defense merely for
exercising their constitutional right not to speak to the government,”
Weissmann says.
“In determining whether to indict a company, the Department of Justice should not permit consideration of the company’s treatment of an employee who has asserted her Fifth Amendment right," Weissmann writes. "This factor should simply not come into play in the analysis of whether a corporation has or has not cooperated. Although a company itself can properly fire an employee or cut off legal fees based on whether she cooperates with an investigation, the Department of Justice should not weigh in on this determination – and not because a court may ultimately deem the company’s actions as government conduct. Rather, for policy reasons, the Department of Justice should simply not base its decision to prosecute a company on whether a person has been punished by her employer for asserting a constitutionally guaranteed right.”
But Weissmann goes beyond tinkering with the Thompson memo.
He wants a “rethinking of corporate criminal liability.”
“Although the Thompson Memorandum has recently received significant negative
attention, and is in some ways an easy target, it is not the real source of
the problem,” Weissmann says. “The root cause that renders the Thompson
Memorandum such a sharp weapon is the standard for criminal corporate liability
and the absence of systemic checks to restrict the government’s power
to charge corporations whenever an employee strays. The current standard for
corporate criminal responsibility affords prosecutors enormous – and unduly
disproportionate – leverage and power. In this climate, a corporation
has little choice but to conform its conduct to the Thompson Memorandum factors,
even in the absence of a prosecutor’s overt threats.”
Weissmann wants to change the standard for criminal liability so that it takes
into account “a company’s attempts to deter the criminal conduct
of its employees.”
“Holding the government to the additional burden of establishing that
a company did not implement reasonably effective policies and procedures to
prevent misconduct would both dull the threat inherent in the Thompson Memorandum
as well as help correct the imbalance in power between the government and the
corporation facing possible prosecution for the acts of an errant employee,”
Weissmann says. “A more stringent criminal standard, one that ties criminal
liability to a company’s lack of an effective compliance program, would
have the added benefit of maximizing the chances that criminality will not take
root in the first place – since corporations will be greatly incentivized
to create and monitor a strong and effective compliance program. The objectives
of law-abiding society, the criminal law, and even of the Department of Justice’s
Thompson Memorandum itself, would then be well served.”
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Crime Reporter
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