A Change of Heart for the DOJ: Policy Run Amok or Greater Respect for Ethical Norms?

Georgetown Journal of Legal Ethics, The, Summer 2007 by Brody, Katherine R, Tatarowicz, Chris

Frankly, I have a hard time understanding the criticisms from corporations which claim they want to cooperate, and then complain when we ask them to disclose the facts and evidence they have uncovered.

Deputy Attorney General Paul McNulty, September 12, 2006(1)

The modern business world is no stranger to scandal. In the wake of the frauds at Enron and WorldCom, the collapse of Arthur Andersen, and the passage of the Sarbanes-Oxley Act, federal prosecutors are investigating allegations of corporate crime and pursuing convictions with greater vigor than ever.2 And, perhaps unfortunately, they are often successful.3

But at what point do prosecutors go too far in the so-called interests of "justice?" The Justice Department may have received a blunt answer to that question in June 2006, when a federal judge invalidated a long-standing departmental policy as unconstitutional.4 The policy stemmed from the now-infamous 2003 "Thompson Memo." The Thompson Memo encouraged corporations under investigation to disclose privileged materials and to refrain from paying the legal fees of certain employees in the interest of "cooperation" with the Government.5 Basing his decision on the Due Process Clause of the Fifth Amendment and the Right to Counsel Clause of the Sixth Amendment, Judge Lewis Kaplan of the Southern District of New York declared this policy unconstitutional in United States v. Stein.6 Furthermore, in his opinion, he rebuked the individual prosecutors in that case and hinted that their behavior had been unethical.7

This was not the first time the Department of Justice ("DOJ") sparred with the federal courts over an ethical issue. In 1987, the First Circuit held that federal prosecutors were bound to follow a Massachusetts ethics law that was shortly thereafter incorporated as part of the Model Rules of Professional Responsibility ("Model Rules").8 Several years later, the Attorney General disregarded that same rule in Rhode Island.9 In 1988, the Second Circuit held that a departmental policy violated a different Model Rule,10 and shortly thereafter the Attorney General issued a memorandum formally stating that he disagreed with the circuit court's holding.11 The common theme in both of these instances was defiance-despite a ruling to the contrary by a federal court, the DOJ continued to implement certain questionable policies.

However, after the most recent anti-Department ruling in Stein, the DOJ behaved differently. Less than six months after the decision, and despite personally defending the Department's policies in front of the Senate Judiciary Committee,12 Deputy Attorney General Paul McNulty issued a revised version of the Thompson Memo that effectively codified Judge Kaplan's opinion.13 Why McNulty issued this new memo-now known as the "McNulty Memo"-is a matter of debate.14 Political forces at the time certainly played a role in the decision, and one would like to think that ethical considerations played at least a small role as well.15 One thing is clear though-the McNulty Memo will have profound implications for legal ethics, especially in the prosecutorial setting.

This Note examines the Justice Department's decision to implement the McNulty Memo and considers the memo's implications for legal ethics. Part I discusses the Justice Department's history of conflict with the federal courts over ethical rules and guidelines. Part II describes the Thompson Memo and the resulting Stein decision, which represent the latest example of this conflict. Part III introduces the McNulty Memo and shows how it is a departure from that history of conflict. Part IV advances a number of ideas about why the Justice Department was willing to change its existing policy after Stein. Part V considers the ethical implications and perceived shortcomings of the McNulty Memo, and discusses issues that must be addressed before the DOJ can implement an ethical policy on corporate prosecution.

I. A HISTORY OF CONFLICT BETWEEN THE JUSTICE DEPARTMENT AND THE COURTS

The role of the federal prosecutor is to seek justice in the interest of the public, rather than to win at all costs.16 Yet, there is a history of tension and conflict between me courts, individual federal prosecutors, and the DOJ as to what constitutes ethical conduct during a criminal prosecution.17 In an effort to fulfill its duty to seek justice and "prosecute . . . all offenses against the United States,"18 the DOJ has effectuated various policies that the federal courts have rejected and held in violation of legal e�iics.19 On several occasions, the DOJ has sidestepped ethical rules and even directly opposed ethical bounds set by the courts.

A. MODEL RULE 3.8 IN FEDERAL COURT

One conflict between the judiciary and DOJ regarding ethical restraints on federal prosecutors' conduct revolved around early versions of Model Rule 3.8. That rule required judicial approval before a prosecutor could serve a subpoena on an attorney in order to obtain information about that attorney's client.20 This ethical rule aimed to safeguard the attorney-client relationship, confidentiality, and privilege from the potential damage of subpoenas directed at defendants' attorneys.21 When the District Court for Massachusetts adopted a local ethics rule similar to the pre-1995 Model Rule 3.8(f)(2), a U.S. Attorney challenged the rule's applicability to federal prosecutors in United States v. Klubock.22 The Government challenged the rule's application to federal prosecutors23 under the Supremacy Clause and as conflicting with the Federal Rules of Criminal Procedure's provision for the non-discretionary issuance of subpoenas.24 The First Circuit rejected the Government's arguments that the rule conflicted with Federal Rule of Criminal Procedure 17 and that the district court had no authority to adopt local ethics rules, concluding that the rule "was necessary and rational and that the 'principles of right and justice' require its appellate support."25 The First Circuit upheld the district court's decision to enforce the Massachusetts version of Model Rule 3.8(f) in federal prosecutions based on both "the inherent and statutory authority of the courts to control ethical and procedural matters in their forum."26