US considers easing prosecution tactics for corporate cases
WASHINGTON -- The Justice Department is considering scaling back tough policies used to prosecute scandal-plagued corporations, legal tools criticized as unfairly pressuring companies and employees to cooperate in investigations.
The policies, used in criminal investigations of accounting firms Arthur Anderson and KPMG, could be changed as early as next week, according to people familiar with discussions between Bush administration officials and congressional leaders.
No final decisions have been made, department officials said. But the review comes as outgoing Senate Judiciary chairman Arlen Specter, Republican of Pennsylvania, threatens to ease parts of the 2003 crackdown on white collar crimes in legislation he plans to file next week.
Additionally, an odd coalition of critics -- from the US Chamber of Commerce and the American Bar Association to former Attorney General Ed Meese and the American Civil Liberties Union -- are calling for greater protections for those targeted in cases.
At issue is what has become known as the Thompson Memo, written by former Deputy Attorney General Larry Thompson. In the wake of scandals involving Enron Corp. and WorldCom Corp., it sought to coordinate prosecution tactics among the country's 94 US attorneys.
The policy allows prosecutors to show leniency to companies that cooperate with investigators by refusing to pay employees' legal fees and by disclosing confidential discussions between company lawyers and executives targeted by the government. The memo suggests that companies not cooperating could be indicted.
"There's a general understanding that there's going to be a change that would eliminate any reliance on whether a company was paying attorney fees for employees when making the decision to charge or indict a corporation," said Brian Walsh, senior legal research fellow at the Heritage Foundation think tank in Washington. The think tank scheduled a discussion today about the memo, led by Thompson.
Walsh, who has been briefed on some of the department's discussions, said the department may require the attorney general or the top deputy to review and approve any government access to confidential attorney-client discussions. That would take away the discretion from US attorneys in the states.
That, however, "won't do enough to restore the historical protections of the attorney-client relationship," Walsh said.
Few, if any, critics take issue with the Thompson memo's overarching goals. It has helped secure hundreds of corporate fraud convictions since it was written, and is "designed to protect the American investor," a department spokesman said.
