The McNULTY MEMO and what does it do? = Tone Down Corporate Fraud Prosecutions

[L. Coyote]

New DOJ Guidelines Tone Down Corporate Fraud Prosecutions
http://www.itbusinessedge.com/item/?ci=22930

Question: What is the McNulty Memo, and what does it do?

Cellini: On Dec. 12, 2006, Paul McNulty, the incumbent Deputy Attorney General, issued a revised memorandum to prosecutors outlining the factors they should consider when deciding to charge corporate entities with wrongdoing. This memorandum replaces the Thompson Memo and will inevitably come to be known as the McNulty Memo.

The McNulty Memo chooses sides in the war between the factor that rewards companies for establishing effective internal compliance programs and the factor that punishes companies for failing to voluntarily disclose adverse information turned up by those very same programs. Specifically, the McNulty Memo dramatically limits the circumstances under which it will require corporations to waive the attorney/client privilege. In other words, the Justice Department has made a choice and has come down on the side of encouraging companies to establish compliance programs (even at the expense of giving up its power to force companies to disclose unfavorable information uncovered by those programs). ....

Of course, corporate entities are abstract entities that cannot be jailed. However, if convicted, they can be fined heavily and barred from doing business with the government. .... As a practical matter, indictment is often tantamount to a death sentence for a corporate entity.......

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Statement of Attorney General Alberto R. Gonzales on the
Resignation of Deputy Attorney General Paul J. Mcnulty
http://www.usdoj.gov/opa/pr/2007/May/07_ag_357.html

"He has also been the principal driver of the Department’s policies and efforts to prevent corporate fraud and stop those who seek to defraud the taxpayers through fraudulent procurement practices...."

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MORE: 30 U.S. attorneys investigate BILKING BILLIONS, Medicare, Medicaid, Military’s Healthcare
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x877011

This thread is spinning off from:
US Attorney Firing: Voter Fraud, Medicare Fraud, WHICH IS IT ???
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x853813#873507

[L. Coyote]

1. McNULTY: Federal prosecutors required to seek approval from senior DoJ officials

DOJ Revises Corporate Fraud Procedures
Jason McLure - Legal Times - December 13, 2006
http://www.law.com/jsp/article.jsp?id=1165917921963


Bending to pressure from Congress, a federal judge and a lobbying campaign by business and legal groups, the Justice Department announced a number of immediate changes to its corporate-fraud charging policies Tuesday.

.......

The changes, announced in a Tuesday speech by Deputy Attorney General Paul McNulty at a legal conference in New York, are a step back from the government's aggressive anti-fraud prosecution tactics outlined in the so-called Thompson memo, named for former Deputy Attorney General Larry Thompson, in 2003.

In the speech, McNulty said the new guidelines were designed to address the "perception, well founded -- or not," that the Justice Department's policies were "chilling attorney-client communications" and hurting the effectiveness of corporate lawyers ...................

For certain types of sensitive attorney-client information, such as the advice a defense attorney gave to the management of a corporation facing a fraud investigation, prosecutors are now required to obtain the approval of the Justice Department's No. 2 official in Washington -- currently McNulty.

For privileged factual material a company has obtained through an internal investigation into an alleged fraud, such as transcripts of interviews with culpable employees, prosecutors will need to obtain the approval of the local U.S. Attorney in their district, who can only sign off on such a request with the approval of the head of the DOJ's Criminal Division in Washington, currently Alice Fisher.

Previously, prosecutors had wide latitude to issue such requests on their own ....

[L. Coyote]

2. USA Firings Timeline: Centralization of authority follows the firings. WHY?

McKay's "chilling effect" may have been intended with the firings, given that just a week later McNulty centralized the corporate fraud prosecution authority.

McNULTY: USAs, Prosecutors MUST seek approval from senior DoJ officials for corporate fraud decisions

ADD TO TIMELINE right after the firings:
Dec. 7, 2006 - Michael Battle, director of the Executive Office for U.S. Attorneys, calls seven U.S. Attorneys to ask for their resignations.
Dec. 13, 2006 - McNulty curbs USAs', Prosecutors' powers, centralizing decisions at highest levels w/ immediate changes to corporate-fraud charging policies

This lends some credence to the possible relationship of Sampson's e-mail to the same issue, corporate fraud.

May 10, 2006 - USA Carol Lam's Litigation: Health and Human Services Seeks to Bar Medicare and Medicade Payments to Nation's #2 Hospital chain.
May 11, 2006 - Kyle Sampson e-mails deputy White House counsel William Kelley, re "the real problem we have right now with Carol Lam ....

Timelines are important forensic tools!