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Bar News - February 3, 2006 Opinions: Attorney-Client Privilege By: Michael S. Greco, President, American Bar Association In the interests of corporate integrity and the investing public, the U.S. Sentencing Commission should reverse its harmful policy of requiring corporate defendants to waive the attorney-client privilege to qualify for leniency under federal sentencing guidelines. The Commission is showing a willingness to consider modifying that policy, by retaining the privilege waiver issue on its final list of priorities for the 2005-2006 amendment cycle. It received encouragement to do so from remarkably diverse political and philosophical sources at a recent Commission informal hearing. The fundamental underpinning for the privilege, when it was established more than 200 years ago, remains the strongest argument for its retention. The ultimate benefit of the privilege is that it helps ensure law-abiding conduct and, in the context of the U.S. Sentencing Commission’s ultimate objective, legal compliance by corporations. Despite news reports that might suggest otherwise, compliance is the goal and the operational norm of by far the overwhelming majority of corporations large and small. The current position of the Commission is contrary to a key goal of sentencing policy — to foster compliance with the law. This is so because the Commission’s sentencing guidelines require corporations to waive their privilege in order to demonstrate thorough cooperation with the government and qualify for a reduced culpability score on which sentences are based. That requirement puts companies, their leaders and their employees on notice that information developed in internal investigations of possible wrongdoing likely will be disclosed to the government. Such anticipated disclosure inhibits corporations from conducting adequate investigations, or from keeping adequate written records when they do investigate. Failure to follow up on suspected problems and to develop effective solutions increases the magnitude of harm to investors and society when actual wrongdoing exists. That harm is felt throughout our economy. Investors lose money when heavy fines are imposed, or worse, when businesses collapse, because company officers, without the privilege, are deterred from seeking the guidance they need to comply with the law. Employees are at risk of losing their jobs when businesses collapse, and may also face dismissal unless they agree to the company’s demands, coerced by the prosecutor, that they waive their own legal rights in order to demonstrate corporate compliance. Erosion of the attorney-client privilege inadvertently creates an incentive to “see no evil, hear no evil and speak no evil.” Preserving the privilege has the opposite effect. The privilege provides a safe haven for corporate leaders who want to conduct business according to the letter of the law by encouraging them to meet with counsel and seek guidance when difficult legal issues arise. The privilege allows employees to share concerns they may have about their conduct or that of others in the chain of command. The American Bar Association strongly urged reversal of the Commission’s well-intentioned but wrong policy in a recent Sentencing Commission hearing, as did the U.S. Chamber of Commerce, the American Civil Liberties Union, the Association of Corporate Counsel, the National Association of Criminal Defense Lawyers and the National Association of Manufacturers. The existence of this unusual but strong alliance itself should be appreciated by the Commission. Although our organizations have different philosophical perspectives on many issues, we share the same concern regarding the absolute imperative of preserving the attorney-client privilege, and opposing its coerced waiver. This is not just a lawyers’ issue. It is an issue that affects every person with a stake in our nation’s economic health, and that is all of us. The Commission’s current openness to discussing this issue is a welcome development and makes this the opportune time to rally to this cause. We urge other organizations and lawyers throughout America to support this crucial effort to help the Sentencing Commission understand that it is in the public’s, and our country’s, interest to preserve the oldest common law privilege we have, one that has served our country long and well. The attorney-client privilege, which protects the people and not lawyers, has been a bedrock of our free society. Its erosion will harm our democracy. |
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