Corporate-Wrongdoing Rules Eased, Yay!

Remember how Sen. Specter wanted those corporate-wrongdoing rules eased last week? Yesterday, his wish came true. In the wake of the 2003 Worldcom scandals, federal prosecutors received new powers in the form of guidelines written by then deputy attorney general, Larry D. Thompson.

However, under the new rules enacted Tuesday, federal prosecutors…


    “…[W]ill no longer have blanket authority to ask routinely that a company under investigation waive the confidentiality of its legal communications or risk being indicted. Instead, they will need written approval for waivers from the deputy attorney general, and can make such requests only rarely.”

Fine and good. Attorney-Client privilege is sacrosanct and its protection should not be penalized.


    Are prohibited, “…from considering, when weighing whether to seek the indictment of a company, whether it is paying the legal fees of an employee caught up in the inquiry.”

Ambivalent. On the one hand, it’s noble for an innocent company to stand behind its employees. On the other, it’s clear that a guilty company could be leverage its resources to unduly protect its interests. Perhaps too the company-paid lawyers would defend in a way that favored the company over the employee. Not to mention a strong parallel with a little thing called “hush money.”

In the wake of recent and rampant corporate improprieties, do corporations really need protection?

In limited instances, like particular overreaches by the Thompson memorandum, yes, if we want to preserve what we’re prosecuting in the first place: Justice. — BEN POPKEN

U.S. Moves to Restrain Prosecutors [NYT]

Previously: Senator Wants Corporate-Wrongdoing Rules Eased

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.