November 16, 2015 / 7:04 PM / in 2 years

U.S. Justice Department turns up the heat on companies to cooperate

WASHINGTON, Nov 16 (Reuters) - The U.S. Department of Justice formally instructed federal prosecutors on Monday to require companies to hand over all relevant facts about individuals who played a role in wrongdoing if the companies wish to receive cooperation credit in criminal investigations.

The changes to the U.S. Attorney’s Manual, outlined by Deputy Attorney General Sally Quillian Yates on Monday, expand upon and codify a new policy first announced by Yates in a memo issued in September. [ID: nL1N11G1J3]

That policy called for placing a greater emphasis on holding individuals more accountable. The memo said that in future investigations, a company would not receive any credit for cooperating in criminal probes unless it disclosed all relevant facts about the people involved in suspected wrongdoing.

“In the past, cooperation credit was a sliding scale of sorts and companies could still receive at least some credit for cooperation, even if they failed to fully disclose all facts about individuals,” Yates said in prepared remarks at an American Bar Association conference on money laundering.

“That’s changed now.”

The policy shift comes at a time when the Justice Department has been facing criticism by consumer advocacy groups and some lawmakers who have accused the department of failing to prosecute bankers for their conduct during the financial crisis.

Since Yates first announced the policy shift, however, some defense attorneys have also raised concerns about what prosecutors may require from companies in order to receive full credit for their assistance with criminal probes.

In particular, there have been questions on whether corporate attorneys might be forced to hand over information that is privileged, such as memos and notes from interviews conducted during internal corporate investigations.

There have also been concerns raised about whether the policy may lead to broader and more costly internal investigations.

Yates sought to address these concerns on Monday, saying the department is not trying to get its hands on attorney work product from internal probes or spark a “years-long, multimillion dollar investigation.”

“There is nothing in the new policy that requires companies to waive attorney-client privilege,” she said. She added, however, that while notes and memos may be privileged, “facts are not,” and that companies must turn over facts they learn through interviews conducted during investigations.

Yates also said Monday the department is making other changes to the handbook concerning civil investigations and updates on how attorneys should communicate during parallel civil and criminal probes. (Reporting by Sarah N. Lynch; Editing by Andrew Hay)

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