The Department of Justice is preparing to revamp guidelines for the criminal prosecution of corporations in order to make it harder for local and state level law enforcement to bring actions without DOJ input (call it the Spitzer-neuter).

This move comes based on broad, national, grassroots support amongst average Americans who hate to see corporations having such a hard time. Nah. Just jokin'. It's the corporate lobbyists who've been pushing for it. And civil libertarians, to be fair.

Details from the Washington Post:

The changes, which could require local U.S. attorneys to obtain input from high-level Justice Department officials before seeking corporate indictments, could be unveiled by Deputy Attorney General Paul J. McNulty next month, according to sources briefed on the issue who spoke on condition of anonymity because the deliberations are not yet complete. The administrative revisions also may forbid government lawyers from forcing companies to stop paying attorney fees to employees ensnared in investigations, a move that was declared unconstitutional in June by a federal judge in New York.

Separately, Senate Judiciary Chairman Arlen Specter (R-Pa.) is drafting legislation that would bar prosecutors from forcing companies to waive their attorney-client privilege over internal documents in order to avoid criminal charges, a key part of the current guidelines. Specter, who has received support from Sen. Patrick J. Leahy (D-Vt.), could release the bill as early as Monday.

Debate about the appropriate use of prosecutorial power over business has simmered for years, reigniting in 2002 when the Justice Department charged Arthur Andersen LLP with obstruction of justice, a move that prompted partners and clients to flee and hastened the death of the audit firm...

For business groups, the biggest concern is waiver of the attorney-client privilege to avoid prosecution, a move that puts sensitive documents and e-mail messages -- often involving communication with company lawyers -- into the hands of prosecutors, securities regulators and, ultimately, plaintiff lawyers who can use the waivers to obtain potentially damaging information in costly class-action lawsuits.

The Daily Caveat is not exactly surprised, as this shift in the wind, given all the recent talk about Sarbox rollback and concerns about competitiveness relative to European markets.

Still, you have to wonder when a country becomes more interested in legal protections for its corporations even as due process for its citizens is increasingly eroded. The continuing legacy of Santa Clara County v. The Southern Pacific Railroad, I guess.

Read the rest of the Post article, here.

-- MDT

Labels: Department of Justice, New York AG, pre-trial agreements