One of the hallmarks of a free society is the ongoing endeavor to find an appropriate balance between governmental power and individual liberties. During the last several years, however, in the corporate legal arena this balance has shifted in a way that profoundly impacts individuals caught up in the web of corporate investigations. Since 1990 the number of federal prosecutions of business entities has risen dramatically' as prosecutors have increasingly utilized corporate "cooperation" strategies to conscript business entities into working with the government against the interests of employees. The most far-reaching of these policies are set forth in the Department of Justice's (DOJ) Holder, Thompson and McNulty Memoranda and in the Securities Exchange Commission's (SEC) Seaboard Report. Corporations are often quick to acquiesce in government demands for cooperation based on these policies. As the Arthur Andersen experience illustrates, resistance is not always futile, but it may be fatal.
Part I of this article provides an overview of federal corporate cooperation policies, the principal arguments of their proponents and opponents, and proposals for legislative intervention. Part II discusses recent rulings in the KPMG prosecution and their potential impact, and Part III reviews the implications of the ongoing debate over the scope of corporate criminal liability.
Part IV explores the concomitant responsibility of the legal profession to reexamine the rules of ethics that govern the practice of law for both prosecutors and corporate defense counsel in the corporate cooperation arena. The article concludes by offering some concrete suggestions for change and ideas for future consideration.
Sarah Helene Duggin, The McNulty Memorandum, the KPMG Decision and Corporate Cooperation: Individual Rights and Legal Ethics, 21 GEO. J. LEGAL ETHICS 341 (2008).