Federal Prosecutors Pressuring Companies

Encouraged by recent amendments to the Organizational Sentencing Guidelines (see article on p. 3), federal prosecutors are pressuring target companies to turn on their employees in ways that were unthinkable a few years ago. The measures being extracted as elements of “cooperation” necessary to reduce corporate charges and/or fines and other penalties or, possibly, to avoid prosecution altogether include: 1) waiving the company's attorney-client privilege and work-product protection and giving prosecutors memoranda and notes of interviews with employees; 2) denying employees advancement of attorneys' fees unless they cooperate in a manner that satisfies prosecutors (ie, submit to interviews intended to lock in their version of events, provide leads to further evidence against themselves and others, and reveal any potential defenses they might assert at trial); 3) at the prosecutors' request, removing employees from their jobs and sources of income, with the consequence that it becomes impossible or more difficult for them to pay for their own counsel; and 4) either denying employees access to corporate documents produced to prosecutors or granting only limited access and reporting to prosecutors on the documents provided to employees. Thus, target companies have become active extensions of the government for purposes of coercing their employees into jeopardizing any opportunity they have to mount a successful defense against possible criminal charges.