Justice reins in controversial privilege policy: guidelines call for more supervision of U.S. prosecutors: skeptical defenders.

Federal prosecutors will face increased supervision when asking corporations to waive attorney-client privilege or release work product, according to new U.S. Justice Department guidelines.

The policy, drafted by acting Deputy Attorney General Robert McCallum Jr., was released without fanfare on Friday.

The move was intended to address concerns raised by white-collar criminal defenders who complain that prosecutors are forcing corporations to act against the interests of executives under investigation.

Thompson Memo

Under the new guidelines, each U.S. attorney's office must draft a process for federal prosecutors to obtain approval from a supervisor before seeking waiver of attorney-client privilege.

Asking corporations to waive their attorney-client privilege--a guideline that Larry Thompson, former deputy attorney general suggested in a now-famous 2003 memo--has become a favored tool for prosecutors during investigations, defense attorneys say.

But white-collar defense attorneys have become increasingly vocal in their criticism of this practice.

Small Step

Several defense attorneys said Tuesday that McCallum's new policy revisions are, at best, a small step.

"It doesn't say anything," said Jeffrey Bornstein, of Kirkpatrick & Lockhart Nicholson Graham and a federal prosecutor in San Francisco until July. "They didn't give any guidance to the U.S. attorney's office. They punted.

"It doesn't say when to seek attorney client privilege or even why you should seek attorney client privilege," Bornstein said.

The two-paragraph memo directs the heads of each U.S. attorney's offices to "establish a written waiver process."

Such processes may vary from office to office, it states, so that each U.S. attorney "retains the prosecutorial discretion necessary, consistent with their circumstances, to seek timely, complete, and accurate information from business organizations."

Spokesman Thom Mrozek said the U.S. attorney's office in Los Angeles was in the process of establishing a review process.

Mrozek declined to elaborate on what the policy might entail or when it will be completed.

A Justice Department spokesman could not be reached for comment.

In August the American Bar Association passed a resolution critical of the practice as laid out in Thompson's memo.

Also, in August, nine former high-ranking Justice Department officials, including former Attorney General Edwin Meese III and former Solicitor General Kenneth Starr, wrote to the U.S. Sentencing Commission criticizing the process.

"Routine demands for waiver of the attorney-client privilege and work product protections ... discourages personnel within companies ... from consulting their lawyers, thereby impeding the lawyers' ability to effectively counsel compliance with the law," the letter read.

The letter went on to say that the practice of forcing corporations to forgo attorney-client privilege ultimately would erode the effectiveness of internal investigations and encourage "excessive" follow-on civil litigation by providing plaintiffs' lawyers with a source of sensitive information.

Nevertheless, several criminal defense lawyers said Tuesday that the revised policy was only paying lip service to complaints.

"This certainly doesn't say the U.S. Attorneys aren't going to ask for waivers anymore," said Terry Bird, a former federal prosecutor who now practices white-collar criminal defense in Los Angeles. He pointed out that the Los Angeles U.S. attorney's office, alone, has 250 prosecutors.

"You could theoretically have 250 approaches," he said.

But he added: "They're going to apply a uniform method to the Thompson memo and that's a step in the right direction."