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September 07, 2005
More on the illusory attorney-client privilege
Picking up on the subject of this post from a couple of months ago, this NY Times article notes that corporate targets of criminal investigations can no longer effectively rely on the attorney-client privilege protecting communications between corporate representatives and the company's attorneys.
Frankly, the destruction of the corporate attorney-client privilege is changing the landscape of American business. For example, my standard advice for a prospective chief executive of a publicly-owned company is to negotiate as a part of his employment agreement that the company pay for the executive's personal attorney to advise the executive in regard to his handling of corporate affairs. Similarly, I caution businesspeople considering taking on a board seat with a publicly-owned company not to do so unless the company provides separate counsel for the board. Absent such arrangements, the government's evisceration of the corporate attorney-client privilege has the ironic effect of making business executives and directors less likely to consult corporate counsel before before making critical business decisions because they know that counsel will rat them out in the event of a governmental investigation of the company.
Interestingly, the article notes that some people could care less about the demise of the attorney-client privilege, such as those who conclude first that a crime has occurred and then attempt to manipulate facts to support their conclusion. One of those is John R. Kroger, the Lewis & Clark Law School professor and former Enron Task Force prosecutor, whose law review article -- Enron, Fraud and Securities Reform: An Enron Prosecutor's Perspective -- is an appalling example of a non-expert in structured finance concluding that legitimate structured finance transactions of Enron were criminal and then attempting to manipulate the facts to support his thesis. Taking the same approach to the attorney-client privilege, the article quotes Mr. Kroger:
"It's really in the public's interest to get out on the table whether there's any possibility executives engaged in wrongdoing were really following legal advice or not."
Or, stated another way, the state's interest in criminalizing corporate conduct outweighs the individual's right to consult with an attorney candidly. That such people as Mr. Kroger are teaching this nonsense to future prosecutors at U.S. law schools is an ominous sign for American business interests.
Posted by Tom at September 7, 2005 06:08 AM
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Tom K has depressingly interesting stuff on possible misconduct by the Enron Task Force and the apparent expendability of the attorney-client privilege in white collar crime cases, pointing to this NYT article. My dim view of the increasing criminaliza... [Read More]
Tracked on September 7, 2005 09:18 AM
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