Katrice Bridges Copeland on the Yates Memo and Corporate Crime

In September 2015, the Justice Department issued its now famous Yates memo.

Katrice Bridges Copeland
Professor of Law
Penn State Law School

The idea behind the Yates memo is that in order for a corporation to receive any credit for cooperating with the government and obtain leniency in the form of a deferred prosecution agreement, the corporation must not only conduct an internal investigation and turn over the results, but it must also point the finger at culpable employees – preferably high level executives.

Hasn’t worked out too well in practice.

Katrice Bridges Copeland is a professor of law at Penn State Law School.

She has just penned a law review article titled – The Yates Memo: Looking for Individual Accountability in All the Wrong Places.

In the article, Copeland argues that the Yates Memo “is a misguided attempt to further put law enforcement responsibilities on the backs of corporations rather than the Department of Justice.”

“The Yates Memo jeopardizes the corporation’s ability to conduct effective internal investigations into corporate wrongdoing because it threatens both the corporate attorney-client privilege and the relationship between employers and employees,” Copeland writes. “If the Department of Justice truly wants to find individual accountability, it must stop relying on corporations and conduct its own investigations.”

“If the Department of Justice wants to obtain criminal convictions of high-level executives, there may be a need for new legislation that holds high-level executives accountable for the criminal misdeeds of their subordinates.”

Copeland’s law review article was quoted by U.S. District Court Judge William Young last month when he tossed a corporate criminal guilty plea between the Department of Justice and Aegerion and ordered the case to go to trial.

Judge Young quoted Copeland’s law review article  –  “The notion that the corporation should perform the prosecutor’s function of investigating, identifying, and providing evidence against the wrongdoer within the corporation is ludicrous. . . .   If the government truly wants to achieve individual accountability, it must therefore conduct its own investigations from start to finish, rather than relying upon the corporation’s internal investigation.”

Judge Young also says there is a shocking disparity in the criminal justice system between the treatment of individuals and corporations. He says he’s ashamed he didn’t recognize this glaring inequity until the Aegerion case.

Do you agree with him that corporations are treated more leniently than individuals in the criminal justice system?

“I would say that what has happened in most recent years is that corporations are getting sweetheart deals,” Copeland told Corporate Crime Reporter in an interview last week. “They are getting deferred prosecution agreements in exchange for paying a large fine and agreeing to enact compliance measures. That is definitely a problem. We don’t have any reason to believe that corporations are fundamentally changing their practices as a result of those types of agreements.”

“With respect to individuals, the government has tried to go after individuals. Individuals have fewer protections. Corporations are too big to fail. We have to worry about collateral consequences. What about the shareholders? What about the employees? When we talk about pharmaceuticals, what about the patients who might need this particular drug? When it comes to an individual, those same concerns just are not present.”

Judge William Young says these corporate settlements are not legitimate. That in fact, we should have trials or pleas with probation officers –  not monitors paid for by the company. Do you agree with Judge Young?

“I do agree,” Copeland says. “We have gotten too far away from the adversarial system of justice. When it comes to these corporate investigations, the government is making the defense attorneys their agents.”

“And that just seems completely inappropriate that they are conducting the investigation and then turning everything over to the government. Yes, I do agree that we need more trials. We have a problem with understanding what exactly violates the legal norms. It’s hard to determine that when we don’t have cases that lay that out.”

Do you find that your position and that of Judge Young – take these corporate crime cases to trial –  those are minority positions within the field of corporate crime?

“There are a lot of people in the field who agree with me with respect to the issue of the corporate attorney client privilege. There are not a lot of people in the field who necessarily agree that we need more trials. The second part is where I am and Judge Young are more outliers.”

Instead of a failing Yates memo, Copeland calls for legislation to hold high level executives accountable for corporate crimes.

“If government performs its own investigation, makes deals with individuals to obtain incriminating information about high-level officials, and then has the assistance of legislation which permits it to prosecute high-level executives for the misconduct of their subordinates, it will be much more successful than it would be by simply relying on the investigation of the corporation and the Yates Memo to pressure the corporation to provide information about culpable individuals in order to save itself from prosecution,” Copeland writes.

“The Yates Memo is nothing more than a return to the ‘culture of waiver’ that was reviled by the legal community,” Copeland writes. “Its requirement that corporations identify and provide all relevant information concerning individual wrongdoers within the corporation in the name of cooperation is no different than requiring waiver of the corporate attorney–client privilege to prove cooperation.”

“Not only does the Yates Memo put the corporate attorney – client privilege in grave jeopardy, but it also threatens the  employer – employee relationship. Over the past twenty years, the government has become too reliant on the internal investigations of corporate counsel. If the government wants to hold individuals accountable for corporate wrongdoing, it is time for it to do its own job. It is in the public interest that the government, rather than corporate counsel, perform investigations and make the case that individuals broke the law. With legislation that is loosely modeled on the responsible corporate officer doctrine, the prosecution is much more likely to be successful at holding high-level executives criminally accountable for misconduct within the organization.”

[For the complete q/a format Interview with Katrice Bridges Copeland, see 31 Corporate Crime Reporter 48(12), Monday December 11, 2017, print edition only.]


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