Federal Erosion of Business Civil Liberties: Part 5

In the prior blogs on this topic I have hopefully persuaded you that this is a matter of considerable concern. Although the first reaction of many might have been less than sympathetic, it is clear that business is being faced with the potential for criminal prosecution that does not have the protection of the public good as its objective. Prosecuting authorities fabricate evidence and use it to intimidate the innocent in order to pursue their own agendas.

The exponentially expanding potential liability is growing faster than even the most arduous counsel can master, and the doing so in such an vague and confusing manner that determining a course of conduct to avoid liability is challenging at best, totally impossible at worse.

Civil remedies had been largely ineffective in discouraging abusive conduct and the federal courts, beyond acknowledging improper conduct, have done little to exercise their authority to sanction those who are guilty of even the most egregious conduct.

You might ask what more can happen. The answer is there is more—the development of governmental and judicial policies whose objective is to deprive business the effective representation of counsel. Beginning in 1999 the DOJ began the attack permitting business the right to effective representation of counsel using enforcement policy that encouraged the waiver of the attorney-client and work product privilege. Waiver of these privileges became a gauge of cooperation. Such a policy places a wedge between in-house counsel and their client who can never be sure whether waiver of the privilege will expose them to having their in-house counsel become an instrument that is adverse to their interests, causing company employees to be suspicious of in-house counsel and less than candid in their conversation.

The courts have also been a part of this problem by expanding the Crime –Fraud exception in a manner that threatened the exposure of counsel’s conversations with his clients in an environment where advice of counsel had become critically important. I had the privilege of writing the Introduction to a WLF monograph on the topic written by the Honorable Richard Thornburgh, “Attorney-Client Privilege and ‘Crime-Fraud’ Exception: The Erosion of Business Privacy”, Sept 1999.

What can you do? First, get the WLF monograph available from WLF, at www.wlf.org. It is far more comprehensive than my brief blogs and has detailed recommendations for change. Second, support WLF’s efforts. Third, support ACC’s efforts; it has also been in the fore front of the efforts to confront this challenge.

Protecting business rights is as important as protecting individual rights. When prosecuting authorities and the judiciary lose sight of the proper role of criminal enforcement with respect to business activities, it is only the naïve who believe that individuals will be immune from similar conduct.

Federal Erosion of Business Civil Liberties

The extent to which the Federal government has criminalized conduct is extra-ordinary. By 1900 there were 165 federal criminal laws. That number had increased to around 2000 by 1970. In 1998 the number had grown to 3,300 and by 2004 to more than 4000.

This is only part of the problem. The Code of Federal Regulations contains many regulations that can be criminally enforced. Estimates are that there are as many as 300,000 criminally enforceable regulations.

So for those of you out there who considered yourself a civil lawyer and only watched Perry Mason for entertainment, think again. You may be closer to being a criminal lawyer than you think.

But you respond, we always gave advice on matters that could result in criminal prosecution—violating various securities rules for example. How about those other 290,000 and 3500 regulations and statutes that posses the potential for criminal sanctions, do you know what they are? More importantly, would you even recognize them if you saw them? Chances are you are thinking no is the answer to both questions.

Perhaps what is even more of a concern, even if you happened to be aware of the potential for a criminal sanction could you confidently give advice to avoid a violation?
We will address that in the next in this series.

-Larry Salibra
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