Results matching “mcnulty”

Around the web, August 16 - PointOfLaw Forum

  • Twenty years of Sentencing Guidelines for corporate compliance. [Paul McNulty]
  • AT&T Mobility sues to stop scheme to misuse arbitration to block merger. [complaint @ Reuters (h/t W.K.); earlier at POL]
  • Presser: Obama likely to stall Supreme Court consideration of healthcare reform constitutionality. [LNL]
  • No honor among trial-lawyers: six class action law firms file copycat lawsuits free-riding off of e-book antitrust conspiracy theory. [Frankel]
  • ABA censures Villanova Law for misleading students about employment prospects, Villanova buries censure on its website. [ABA; related at NLJ]
  • IJ wins Supreme Court battle over Arizona clean elections law, a victory for free speech. [IJ; earlier on POL]
  • That Righthaven business model runs into the wee problem that it is explicitly precluded by law. [Property Intangible; Legal Satyricon; EFF; OL]

  • Jeff Koons drops his litigation claiming exclusive rights to balloon-dog-shaped sculpture. [Artinfo; NYT]

It's taken us a week and thousands of words, but I think John and I have identified our fundamental differences. Our opposing positions are now crystal clear.

Let me start by clarifying a few things I said earlier that John seems to misapprehend. When I said that legal decisions are based on policy considerations and empirical determinations, I was not in any way suggesting that law is something other than a normative pursuit. That's what I meant by "policy considerations" - fashioning law in a manner that furthers a set of normative values. The only difference between John and me on this front is his certainty in the rectitude of particular normative propositions, and my reluctant but realistic acceptance of the view that, as William James said, "truth is what works."

John also appears to misunderstand my statement that "[a]dministrative and criminal penalties are different only by degree." My next sentence makes clear that I meant this only in the context of corporate criminal liability. For individuals, the difference is quite real - a criminal conviction brings with it the possibility of time in prison and a negative social stigma that may never be overcome. This stigma may impact the individual's family life, ability to get a job, mental status, and even whether he gets to vote in public elections. For corporations, however, prison is not an option and the stigma associated with conviction affects only the value of the good will attached to the corporate name. So, in the context of corporate criminal liability, a criminal conviction translates solely into a matter of dollars and cents.

I am not, however, conceding that such liability is unnecessary because it could, in theory, be replaced by a regime of aggressive administrative penalties and fines. I'm an academic, true, but I live in the real world. If we eliminated corporate criminal sanctions in the U.S., they would never be replaced by administrative remedies with real teeth in them because of the revolving door that exists between industry, on the one hand, and regulatory agencies and Congress, on the other. Federal prosecutors are wholly insulated from this symbiotic relationship; when pursuing a conviction they are not thinking about taking a job in the industry under investigation. So, for very pragmatic reasons, I believe that criminal prosecution of corporations is a must in the battle against white collar crime.

John reveals the fundamental difference between our world views when he states, "If we eliminate corporate criminal liability, business crime will not run wild." My reaction is this: What planet is he living on? The history of the past twenty years, starting with the S&L crisis, through the crackdown on healthcare fraud, then into and out of the Enron era, and now with the revelation of the rampant bank and mortgage fraud that nearly led to the ruination of our economy, I don't understand how he can make this argument with a straight face. Even with the existence of corporate criminal liability (which was not aggressively pursued by DOJ until the beginning of this century), white collar crime has run amok. If we've learned anything from the collapse of Bear Sterns et al., it's that market forces will assuredly do nothing to police bad actors with access to other people's money. I agree with the present Administration that more regulation is needed to prevent wrongdoing in the first place, but when that fails, the government needs every legitimate tool at its disposal to catch the wrongdoers and bring them to justice.

I am not advocating the pursuit of corporate criminal liability in every instance. The legal threshold for charging a corporation is quite low--the entity may be indicted for any crime committed by any of its agents whose activity fell within the scope of his employment and was undertaken, at least in part, for the benefit of the company. This means that, in theory, if one cashier at a national retail chain is purposely overcharging customers and putting at least part of the ill-gotten gain into the cash drawer, the national chain could be indicted for theft. This is, of course, ridiculous - and it doesn't happen. Instead, we have a system that relies heavily on prosecutor discretion; DOJ determines when pursuit of corporate liability is warranted.

This determination is based on a document referenced twice by John: the Holder/Thomson/McNulty/Filip Memorandum (named for the succession of Deputy Attorneys General who authored and revised it), found at Chapter 9-28 of the United States Attorney's Manual. The memo requires prosecutors to consider a number of factors when making the charging decision, including: (1) the pervasiveness of wrongdoing within the corporation, including the complicity in, or the condoning of, the wrongdoing by corporate management; (2) the corporation's history of similar misconduct, including prior criminal, civil, and regulatory enforcement actions against it; (3) the corporation's timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents; (4) the existence and effectiveness of the corporation's pre-existing compliance program; (5) the corporation's remedial actions, including any efforts to implement an effective corporate compliance program or to improve an existing one, to replace responsible management, to discipline or terminate wrongdoers, to pay restitution, and to cooperate with the relevant government agencies; (6) collateral consequences, including whether there is disproportionate harm to shareholders, pension holders, employees, and others not proven personally culpable, as well as impact on the public arising from the prosecution; (7) the adequacy of the prosecution of individuals responsible for the corporation's malfeasance; and (8) the adequacy of remedies such as civil or regulatory enforcement actions.

The existence of these guidelines is evidence that, in the prosecution of corporate crime, DOJ is not a government agency run amok. Rather, the guidelines are carefully calibrated to ensure that charges are brought only when warranted by the magnitude of criminality within the organization and when the harm to innocent third parties does not outweigh the benefits of prosecution. They form the basis not only for decision-making at the level of the individual prosecutor, but at the supervisory level as well. Indeed, in a significant case, defense attorneys may get hearing on whether corporate prosecution is justified from the Deputy Attorney General him- or herself.

Of course, I cannot guarantee that DOJ's prosecutive power will never be abused. That's why we need the constant vigilance of individual defense attorneys, organizations like the National Association of Criminal Defense Lawyers and the National Organization of Corporate Counsel, the press, and the public. But the risk of a rogue prosecutor abusing his authority does not justify crippling the government's ability to fight white collar crime just when it is starting to get a handle on it.

Twice, John has referred to the Arthur Andersen case as a "Exhibit A" of government overreaching. I'm not surprised, because ever since Andersen's indictment on obstruction of justice charges in connection with the Enron debacle led to the accounting firm's dissolution, opponents of entity liability have used it as their rallying call. The protests got even louder when Andersen's conviction was overturned on appeal by the Supreme Court. Critics of DOJ claimed that the entire prosecution was ill-founded and that Andersen was "hanged" without cause.

This is simply not true. First, the collapse of the firm after indictment - obviously causing serious collateral damage to a variety of innocents - was a very unusual event. The best evidence of this is the huge number of corporations that have been criminally charged (or have settled such charges) over the years that have lived on to produce their widgets for another day. Andersen's situation was unique because, as a firm specializing in public accounting, it faced the loss of its ability to conduct public audits upon conviction. As a result, its indictment led clients to believe that the firm no longer had the credibility necessary to do its job - even if it was eventually exonerated - and so they jumped ship. This extreme reaction by a company's clientele is simply not present in the run-of-the-mill corporate case (and it was probably not anticipated by the Andersen prosecutors and defense lawyers who failed to broker a plea deal to avoid it).

In addition, Andersen suffered because it was a multiple recidivist: it had recently settled a number of administrative cases with the government in connection with prior claims of wrong-doing. The Enron debacle was the final straw; it was evidence that the firm had a deeply entrenched culture of misconduct that simply could not be ignored. Finally, the contention that the firm was exonerated on appeal is incorrect. The Supreme Court held that the trial judge's jury instructions on the criminal intent required for conviction were erroneous, and it remanded the case for a new trial. It did not declare the company innocent. Presumably, prosecutors did not retry the case because by that time the firm was more or less defunct.

On the other hand, the KPMG case is a legitimate example of government overreaching. In that case, prosecutors investigating illegal tax shelters pressured the accounting firm to cooperate early. As part of its cooperation, KPMG agreed not only to make its employees available to prosecutors for questioning, but also to sanction those employees who refused to comply. An employee's invocation of his Fifth Amendment privilege against self incrimination was considered lack of cooperation. Sanctions included the denial of previously promised attorneys' fees and termination of employment. Eventually, some of these employees were indicted.

Judge Lewis A. Kaplan found that the arrangement between prosecutors and KPMG violated the defendants' Fifth Amendment right to due process and their Sixth Amendment right to counsel of choice. In effect, the government and the firm had teamed up against individual employees in an illegal manner. Under Garrity v. New Jersey, there is no question that the government could not have used direct threats of employment termination to force KPMG employees to incriminate themselves. Accordingly, it should not have enlisted the aid of the company to do its bidding under the guise of cooperation. Chapter 9.28 of the USAM has been re-written to take this decision into account.

John points out, and I agree, that the net effect of corporate criminal liability when it results in cooperation is the deputation of corporate counsel and other corporate agents in the fight against white collar crime. Unlike me, however, he thinks this is a negative development. He alludes to the "untoward effects of placing employers and employees in adversarial roles, and claims that the "trust-enhancing systems of procedural justice" that corporations develop on their own are demonstratively better than the "command and control" compliance systems put in place as part of plea deals. Left alone, he says, firms will not only be "more successful financially" (which I don't doubt), but will also "tend to produce ethical 'corporate cultures.'"

Simply put, I don't buy it. Without doubt, aggressive corporate criminal enforcement, which leads in turn to the prospect of corporate cooperation, potentially pits employee against employee within the same organization. It is likely to make employees more distrustful of each other, of management, and of corporate counsel, and result in the workplace becoming a less pleasant environment in which to function. But is this really a bad thing? By many accounts, the present corporate environment is one in which fraudulent practices and other criminal activities abound. When an individual is caught committing a crime red-handed, his response often is that "everyone else was doing it, too." The "trust" relationships that exist are those in which employee A can count on employee B not to report his wrongdoing. Despite the personal hardships involved, shaking up the complacency of the corporate environment is in the public's best interest. We need to be more vigilant in our fight against white collar crime, not less.

Just when I thought our positions were moving closer together, Mike's last posting greatly widens the gulf. As the week comes to an end, it appears our conversation is more likely to end in discord than harmony.

Mike begins by getting down to fundamental philosophical starting points. He declares himself to be a pragmatist, with the right answer (or the "right" answer, as he expresses it) emerging out of slowing forming and ever changing consensus of opinion. I confess that I am not a pragmatist, either of the traditional James/Deweyian variety or the post-modern Rorty type. In the current idiom, I am not one who believes that it is turtles all the way down.

If I have to assign myself a philosophical label, I would call myself a legal realist of the Felix Cohen stripe. Like Cohen, I eschew the formalism of transcendental nonsense that reifies abstract legal concepts and attempts to deduce legal conclusions from such concepts rather than the actual effects that the decisions have on the world. And like Cohen, I am not an ethical relativist. Cohen wanted to peel away the legal word play and identify the empirical effects of our laws and legal decisions in order to make a proper ethical assessment of it. Like Cohen, I believe that if we allow ourselves to see what we are really doing, we have a better chance of doing the right thing, where there are no quote marks around the word 'right.'

Mike declares that legal decisions are based on policy considerations and empirical determinations. I do not agree. Law is a normative pursuit. It is a prescriptive enterprise. And legal argument, like all normative arguments, must have both a normative and an empirical premise. Getting the empirical or descriptive premise correct is crucially important. That's why it is essential to eliminate the legal transcendental nonsense. But it is not enough. There must be some normative value at work as well to reach a normative conclusion. This is basic Hume.

These philosophical differences may mean that Mike and I are unlikely to agree on fundamental issues. But they do not mean that there cannot be agreement on intermediary points. So let's consider some of the points Mike makes in his last posting.

To begin with, Mike somewhat overstates the position with which I began our dialog. I did begin with the contention that criminal liability is different in kind from civil liability. I did not assert that "a liberal government can under no circumstances impose corporate criminal liability because of the collateral harm it causes to innocent people, which is categorically immoral." I did assert that a liberal government should not employ a form of criminal liability that is intended to threaten the innocent with punishment to force them to help suppress the criminal activities of the their fellow citizens. I assert this because this form of criminal liability is utterly incompatible with the inherent liberal bias built into our criminal law that is designed to protect us against an over-reaching government-something that is always a greater threat than any number of individual criminals.

Mike seems a bit put out by my use of the Soviet, Maoist, and Nazi regimes in my examples. I apologize for this. But I cite those examples not because there is any equivalence between the evil of these regimes and our employment of corporate criminal liability, but because those are the regimes that employed the same principles of collective punishment and "rehabilitation" that are inherent in corporate criminal liability. I'd be glad to use the Inquisition in my examples more frequently, but the church did not employ such principles. The Inquisitors simply used torture. I use the examples to point out what makes a liberal regime different from a totalitarian one. In a liberal regime, citizens accept a less efficient police apparatus in return for a larger sphere for their personal liberty.

Mike accuses me of formalism again for insisting on the distinction between criminal and administrative sanctions. He then makes an odd argument claiming that there is no essential difference between them because "administrative and criminal penalties are different only by degree. If administrative penalties are high enough, they will produce the same result as a criminal conviction: a loss by the company of a considerable amount of money." The reason why I call this argument odd is because earlier in our exchange, Mike was at pains to distinguish criminal from civil and administrative penalties on the ground that only criminal penalties carry sufficient moral stigma to effectively deter criminal conduct. Remember his point about businesses simply regarding non-criminal sanctions as a cost of doing business? Now, either criminal penalties are or are not different in kind from administrative sanctions. If they are different because of the moral stigma associated with them, then we have something to talk about. If they are not different, then criminal sanctions are unnecessary and Mike has conceded the point about corporate criminal liability.

Having said this, let me concede that I believe Mike has a good substantive point is showing that administrative and corporate criminal sanctions are similar in effect. In opening our discussion on Monday, I distinguished between criminal liability on the one hand and civil liability and administrative sanction on the other. I did this because our assigned topic was the extent to which corporate criminal liability was justified and I wanted to keep the focus on that. However, if asked to address the more general topic, I would be willing to argue that market forces and civil liability are sufficient deterrents to fraudulent business practices, and hence, that administrative sanctions can be dispensed with along with corporate criminal liability. Further, I would argue that this would be a good thing for precisely the reason Mike points out-absent the moral stigma, such sanctions still function as a form of collective punishment. However, for those readers who do not accept this, and believe that administrative sanctions are necessary, Mike's last posting provides an argument demonstrating that corporate criminal liability is unnecessary.

Finally, Mike passes on to a more fundamental moral question, "is it ever moral to harm innocents to achieve a great public good?" Mike's answer is sometimes. I agree with him. He provides examples of cases such as war and the need to avert a nuclear disaster which illustrate this. Notice, however, how extreme these examples are. The question we are examining is whether the need to combat business crime is similar enough to these cases to justify harming the innocent. I am tempted to say that he answer must be: obviously not. Mike asks: "Can we justify harming some innocents for the greater good of protecting the public from the havoc that would be wreaked by unchecked criminal behavior in the powerful corporate sector?" But this is a non sequitur. For there is no threat of havoc being wreaked by unchecked criminal behavior in the powerful corporate sector. If we eliminate corporate criminal liability, business crime will not run wild. Prosecutors can still go after the culpable individuals directly. Corporations as collective entities will still be subject to the financial sanctions of both the market and civil liability judgments, and if you favor that sort of thing, administrative sanctions. If we eliminate corporate criminal liability we lose only one tool in the fight against business criminality, the illegitimate tool of collective punishment.

In stating that "In fighting white collar crime, the stakes are less significant, but so is the harm to the innocents," Mike greatly underestimates the harm of corporate criminal liability. And here I am not referring merely to examples like the losses suffered by the innocent partners at Arthur Andersen. As I think we previously established, obtaining convictions against corporations is not what corporate criminal liability is really about. It is about coercing corporate cooperation with law enforcement efforts. And the harm this does is great. It is too late in our exchange for me to go into detail about the untoward effects of placing employers and employees in adversarial roles. But if you want an inkling of what it is like, consider the lives that were ruined (and the Constitutional rights that were violated) by KPMG's behavior in attempting to "cooperate" with federal prosecutors sufficiently to be granted a DPA. Government-approved compliance programs are not ethics programs, and what the government considers cooperation is not consistent with what is called organizational procedural justice. There is presently over thirty years of organizational behavior research that demonstrates systems of command and control sanctions such as those DOJ mandates to avoid corporate indictment are less effective at reducing wrongdoing within business organizations than the trust-enhancing systems of procedural justice that DOJ considers evidence of an uncooperative corporation. And the reason for this is that the command and control systems tend to destroy the trust and alignment of interests and values between employee and firm that not only make businesses more successful financially, but also tend to produce ethical "corporate cultures."

Mike wants to discuss the circumstances under which an alleged corporate criminal should be pursued. The Holder/Thompson/McNulty/Filip Memorandum identifies the tactics DOJ will use in such a pursuit. That is enough for me to identify those circumstances with the null set.

OK, this is getting interesting. From my perspective, real progress is being made. We now have agreement that corporations are not agents and that "[i]n reality a 'corporation' is a group of people who are organized in a certain way." (Although having cited legal realist Felix Cohen's brilliant attack on the legal formalism that gave rise to the reification of the "corporation" to make this point, I find it odd to be accused of being formalistic in my thinking.) We are also in agreement as to what it means to criminally punish a corporation. As Mike says, "If we decide to punish the corporation for wrongdoing, we're not punishing some ethereal being; rather, we're punishing in a collective fashion the people associated with the corporation." Thus, we are also in agreement that the essential question is whether this form of collective punishment is justified. Mike argues that it is. I will continue to argue that it is not. In fact, collective criminal punishment is never justified (unless all individuals are in fact culpable, but then it is unnecessary).

Mike's argument that collective corporate punishment is justified by its deterrent value is revealing. He begins by arguing that the financial penalties associated with civil liability and administrative sanctions provide insufficient deterrence because corporations treat them as a costs of doing business. But note that the penalties imposed on corporations convicted of criminal violations are financial penalties as well. By Mike's own hypothesis then, these must also be inadequate (especially since they are frequently considerably less than the amounts that corporations must pay out in civil judgments). As Mike's argument makes clear, the deterrent effect of collective corporate punishment is entirely due to the moral stigma that comes along with a criminal conviction. The essence of this form of deterrence is now made clear. It consists of stigmatizing a group of people to prevent individuals within that group from engaging in wrongdoing.

Mike wants to cite the statistics on DPA's support his claim that this form of punishment is an effective deterrent. There is no need to do so. There is no doubt that it is an effective deterrent. It's just not a morally legitimate form of deterrence.

Mike claims that in the absence of this form of collective punishment corrupt upper managers will try to create situations in which they encourage criminal activity in subordinates while insulating themselves from personal liability. I'm sure that this is true. Of course, this is not limited to corporate criminals. Criminals always try to accomplish their objectives in a way that makes it least likely that they will go to jail. No one said that prosecutors have easy jobs. It is very difficult to effectively enforce the law within the confines of a system that is designed to be highly protective of the innocent. You know, it's that presumption of innocence, proof beyond reasonable doubt, unanimous jury, right against self-incrimination, attorney-client privilege, Blackstonian "it is better that ten guilty persons escape than that one innocent suffer" thing.

But the difficulty for prosecutors is intentionally built into the system. We want it to be difficult for the government to punish citizens. Our criminal law is based on the normative judgment that an unchecked government is a greater threat to liberty and individual well-being than are individual criminals. The last thing we want to do is to achieve law enforcement efficiency at the expense of the civil libertarian protections of the criminal justice system.

Collective punishment undoubtedly is an effective deterrent. But it is not the type of deterrence that justifies criminal punishment in a liberal legal regime. In a liberal legal regime, deterrence refers to inflicting punishment on a wrongdoer to discourage others from committing similar offenses. It does not refer to threatening to punish the innocent to pressure them into suppressing the criminal activity of their fellow citizens.

Consider Mike's own example of the advantages of corporate criminal liability for effective deterrence. Retain each step in his argument and description of how the punishment would work, but change its setting from the corporate business environment to, let's say, the threat posed by potential Japanese saboteurs during World War II, communist infiltration of the government during the 1950's, or Islamic terrorism today. There are many situations in which we can more effectively deter criminal activity by punishing entire groups or threatening group punishment to pressure innocent group members into suppressing the activities of others within the group. We just should not. I'm sure we could greatly deter teenage crime by threatening to punish the parents of all teenage offenders, who after all have more control over their children's behavior than shareholders have over corporate employees.

Threatening to employ the moral stigma of criminal conviction to damage the reputation of corporations, the job security of managers, and the financial well-being of investors, many if not most of whom may be innocent (think Arthur Andersen here), in order to more effectively deter individual criminal activity within the corporation is no different than threatening to employ the moral stigma of criminal conviction to damage the reputation, job security, and financial well-being of members of the communist party in order to more effectively deter subversive activity by individual communists. This form of deterrence is effective. It's just not justified.

What about rehabilitation? I have encountered arguments like the one Mike produces before. I have personally appeared on several panels with current or former prosecutors who argued that corporate criminal liability can be justified on rehabilitative grounds because fear of corporate prosecution can make business people behave better. And Mike is entirely correct that fear of prosecution can influence corporations to change their corporate culture and institute (government approved) compliance programs (which by the way are not "ethics" programs, see my book, Trapped: When Acting Ethically is Against the Law). The threat of collective corporate punishment can indeed cause corporate management to become deputy prosecutorial agents and to attempt to have a corporate culture that discourages individual criminal activity.

But this is not rehabilitation. Rehabilitation refers to imposing treatment on a wrongdoer designed to reform his or her character to ensure better behavior in the future. One cannot rehabilitate the innocent. Threatening those who have not engaged in wrongful conduct with punishment in order to make them "behave better" is not rehabilitation. It is coercing them to act in the way the coercive agent believes they should. "Rehabilitating" the innocent is simply depriving them of their liberty. This form of rehabilitation was familiar in the Soviet Union and Mao's China in which those whose conduct was unacceptable to the government were sent to psychiatric hospitals and "re-education" camps. Threatening collective punishment to cause corporate executives create what the government considers to be a positive corporate culture is not a form of rehabilitation that can be countenanced in a liberal system of justice.

In my opinion, restitution is a non sequitur. Restitution is not a purpose of punishment. Restitution is what the civil liability system is for. Corporate criminal liability merely interferes with this. For example, Arthur Andersen had negotiated a $750 million settlement with Enron's shareholders which fell through when the firm was destroyed by the federal criminal indictment.

Finally, retribution. On this point, there is nothing to answer. Mike states, and I agree, that "When crime is committed by a set of individuals within the corporate structure, some members of each constituency are deserving of the 'hurt' that corporate criminal liability imposes on them - and, admittedly, some are not." Mike continues by identifying situations in which shareholders may be personally implicated in criminal activity-"the major shareholders in a corporation are also its officers, who may very well have participated in the crime." The purpose of retribution is indeed served by imposing individual punishment on all such shareholders and any other individual associated with the corporation who is personally culpable.

But the rest of what Mike has to say is that to the extent that corporate criminal liability punishes those who are not personally culpable, the punishment will not be too severe; will consist only in financial losses, not prison time; may involve a fair redistribution of wealth; and may even be economically efficient. This is all very interesting, but it has nothing to do with retribution. Retribution refers to the process of requiting evil with evil in which harm is imposed on a wrongdoer in recompense for or in dissipation of the harm that he or she has done. Explaining why imposing punishment on those who have not done wrong is not so bad cannot justify the punishment on retributivist grounds.

Mike ends by admitting that in holding corporations criminally liable, some innocent people are harmed. He argues that the benefits to be gained are worth this cost. I disagree, and I have Blackstone on my side. It is never a good bargain to purchase law enforcement efficiency at the cost of empowering law enforcement agents to take shortcuts around the civil libertarian aspects built into our system of criminal law. As supporting evidence, I offer Department of Justice policy governing the indictment of corporations contained in the Holder/Thompson/McNulty/Filip Memorandum.

Senator Patrick Leahy of Vermont has introduced a new expansion of federal criminal law in S. 386, the Fraud Enforcement Recovery Act, which has already drawn a letter of opposition (PDF) signed by -- note well the interesting breadth of opposition -- both the National Association of Criminal Defense Lawyers and the Heritage Foundation. An excerpt:

Among the over 4,450 criminal offenses already in federal law, Congress has already enacted all of the tools prosecutors need (and far more) to prosecute any criminal activity associated with the subprime market or the current financial crisis. In fact, analysis of the federal criminal code demonstrates that the federal government is sufficiently armed to prosecute any criminal conduct that has a federal nexus and may be related to the market crisis.

Relatedly, we've created a new post category, "Criminal Law and Prosecution", to reflect the site's longstanding interest in this area. We've begun to populate it with a selection of the site's extensive past coverage of episodes like the Justice Department's Thompson and McNulty memos, the Conrad Black, Enron Task Force and backdating prosecutions, the inappropriate use of criminal prosecution as a way of accomplishing essentially regulatory objectives, extraterritorial application of U.S. criminal law to overseas transactions, and many like topics.

White-collar attorney privilege waivers - PointOfLaw Forum

Through the so-called McNulty memo (earlier coverage), the Department of Justice has made a show of responding to criticism about its arm-twisting of corporate defendants to waive attorney-client privilege in white-collar crime investigations. According to a report to a Senate committee by former Delaware chief justice E. Norman Veasey, however, that effort falls short.

The Conrad Black Saga Part III - PointOfLaw Forum

Whether it is a conference on the subject of regulatory crimes, or blog I read on the subject, the message is the same: regulatory prosecutions are out of hand. Many times the dialogue starts like this �I used to prosecute these types of cases; in fact, I was on the taskforce that prosecuted the defendants in [Enron/WorldCom/Adelphia/insert your favorite corporation here], but I feel that it has gotten out of hand!� If the speaker is a legislator regardless of party the message is the same �American businesses need room to breathe and the climate is not conducive for this!� The question I feel like asking these speakers is �then why did you prosecute them?�, �why did you ask for that awful sentence?�, or �why don�t you change the law?�.

It is almost as if we have become trapped in this bizarre system that everyone seems to accept is flawed, unjust, and in need of change; and yet, the system seems to get worse. Who would have envisaged just a few years ago the Thompson/McNulty memo would be in force? It is almost as if each successive administration feels the need to outdo its predecessor. Like the human sacrifices of earlier so called civilizations that were meant to appease the gods and ensure continued prosperity that kept getting more and more gruesome over time, we as a society (more on we are in a bit) almost revel in how much we can extract out of the leaders of our industry. Unfortunately, if true, the parallels are ominous: the ancient civilizations came to a screeching halt. And why not ours?

DOJ's McNulty memo - PointOfLaw Forum

Won't actually make a huge difference in government arm-twisting of corporate defendants, predict Lawrence Finder (Haynes & Boone) and Ryan D. McConnell (AUSA, Middle District of La.) in a Corporate Counsel piece. Earlier: here, here and here.

McNulty memo under scrutiny - PointOfLaw Forum

The so-called McNulty Memo on white-collar prosecution, issued last month by the U.S. Department of Justice, was initially hailed by many as a welcome retreat from the overreaching principles embodied in the earlier, much-criticized Thompson Memo. However, per a report by Pamela MacLean in the NLJ, the new policy is not actually as big a concession as all that, and leaves many of the critics of the Thompson Memo far from satisfied. "We're thrilled the Department of Justice has taken this step forward after two years of begging. But this proposal is no solution. It not only doesn't go far enough, it still misses the point. They still think DOJ gets to decide whether corporate counsel they are prosecuting have a right to counsel or not," says Susan Hackett of the Association of Corporate Counsel.

The government relents on the Thompson memo - PointOfLaw Forum

As discussed here, the "McNulty memo" is a step in the right direction on prosecutorial practices that short-circuit criminal defenses, but possibly not far enough.

Thompson memo superseded - PointOfLaw Forum

Decades from now, everyone is going to wonder what this Thompson memo everyone in the early 21st century was talking about, but, Ashby Jones reports, a narrower McNulty memo is now in place.