[Pages H13562-H13564]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

ATTORNEY-CLIENT PRIVILEGE PROTECTION ACT OF 2007

Mr. SCOTT of Virginia. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 3013) to provide appropriate protection to
attorney-client privileged communications and attorney work product, as
amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 3013

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

[[Page H13563]]

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Attorney-Client Privilege
Protection Act of 2007''.

SEC. 2. FINDINGS AND PURPOSE.

(a) Findings.--Congress finds the following:
(1) Justice is served when all parties to litigation are
represented by experienced diligent counsel.
(2) Protecting attorney-client privileged communications
from compelled disclosure fosters voluntary compliance with
the law.
(3) To serve the purpose of the attorney-client privilege,
attorneys and clients must have a degree of confidence that
they will not be required to disclose privileged
communications.
(4) The ability of an organization to have effective
compliance programs and to conduct comprehensive internal
investigations is enhanced when there is clarity and
consistency regarding the attorney-client privilege.
(5) Prosecutors, investigators, enforcement officials, and
other officers or employees of Government agencies have been
able to, and can continue to, conduct their work while
respecting attorney-client and work product protections and
the rights of individuals, including seeking and discovering
facts crucial to the investigation and prosecution of
organizations.
(6) Despite the existence of these legitimate tools, the
Department of Justice and other agencies have increasingly
employed tactics that undermine the adversarial system of
justice, such as encouraging organizations to waive attorney-
client privilege and work product protections to avoid
indictment or other sanctions.
(7) An indictment can have devastating consequences on an
organization, potentially eliminating the ability of the
organization to survive post-indictment or to dispute the
charges against it at trial.
(8) Waiver demands and other tactics of Government agencies
are encroaching on the constitutional rights and other legal
protections of employees.
(9) The attorney-client privilege, work product doctrine,
and payment of counsel fees shall not be used as devices to
conceal wrongdoing or to cloak advice on evading the law.
(b) Purpose.--It is the purpose of this Act to place on
each agency clear and practical limits designed to preserve
the attorney-client privilege and work product protections
available to an organization and preserve the constitutional
rights and other legal protections available to employees of
such an organization.

SEC. 3. DISCLOSURE OF ATTORNEY-CLIENT PRIVILEGE OR
ADVANCEMENT OF COUNSEL FEES AS ELEMENTS OF
COOPERATION.

(a) In General.--Chapter 201 of title 18, United States
Code, is amended by inserting after section 3013 the
following:

``Sec. 3014. Preservation of fundamental legal protections
and rights in the context of investigations and enforcement
matters regarding organizations

``(a) Definitions.--In this section:
``(1) Attorney-client privilege.--The term `attorney-client
privilege' means the attorney-client privilege as governed by
the principles of the common law, as they may be interpreted
by the courts of the United States in the light of reason and
experience, and the principles of article V of the Federal
Rules of Evidence.
``(2) Attorney work product.--The term `attorney work
product' means materials prepared by or at the direction of
an attorney in anticipation of litigation, particularly any
such materials that contain a mental impression, conclusion,
opinion, or legal theory of that attorney.
``(b) In General.--In any Federal investigation or criminal
or civil enforcement matter, an agent or attorney of the
United States shall not--
``(1) demand, request, or condition treatment on the
disclosure by an organization, or person affiliated with that
organization, of any communication protected by the attorney-
client privilege or any attorney work product;
``(2) condition a civil or criminal charging decision
relating to a organization, or person affiliated with that
organization, on, or use as a factor in determining whether
an organization, or person affiliated with that organization,
is cooperating with the Government--
``(A) any valid assertion of the attorney-client privilege
or privilege for attorney work product;
``(B) the provision of counsel to, or contribution to the
legal defense fees or expenses of, an employee of that
organization;
``(C) the entry into a joint defense, information sharing,
or common interest agreement with an employee of that
organization if the organization determines it has a common
interest in defending against the investigation or
enforcement matter;
``(D) the sharing of information relevant to the
investigation or enforcement matter with an employee of that
organization; or
``(E) a failure to terminate the employment of or otherwise
sanction any employee of that organization because of the
decision by that employee to exercise the constitutional
rights or other legal protections of that employee in
response to a Government request; or
``(3) demand or request that an organization, or person
affiliated with that organization, not take any action
described in paragraph (2).
``(c) Inapplicability.--Nothing in this Act shall prohibit
an agent or attorney of the United States from requesting or
seeking any communication or material that such agent or
attorney reasonably believes is not entitled to protection
under the attorney-client privilege or attorney work product
doctrine.
``(d) Voluntary Disclosures.--Nothing in this Act is
intended to prohibit an organization from making, or an agent
or attorney of the United States from accepting, a voluntary
and unsolicited offer to share the internal investigation
materials of such organization.
``(e) Not To Affect Examination or Inspection Access
Otherwise Permitted.--This Act does not affect any other
federal statute that may authorize, in the course of an
examination or inspection, an agent or attorney of the United
States to require or compel the production of attorney-client
privileged material or attorney work product.
``(f) Charging Decisions Not To Include Decisions To Charge
Under Independent Prohibitions.--It is not conditioning a
charging decision under subsection (b)(2) of this section to
charge an organization or person affiliated with that
organization for conduct described in subparagraphs (B), (C),
or (D) of that subsection under a federal law which makes
that conduct in itself an offense.''.
(b) Conforming Amendment.--The table of sections for
chapter 201 of title 18, United States Code, is amended by
adding at the end the following:

``3014. Preservation of fundamental legal protections and rights in the
context of investigations and enforcement matters
regarding organizations.''.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Scott) and the gentleman from Virginia (Mr. Goodlatte)
each will control 20 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Scott).

General Leave

Mr. SCOTT of Virginia. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days to revise and extend their remarks and
include extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I introduced H.R. 3013, the Attorney-Client Privilege
Protection Act of 2007 on July 12 of this year. At the time, I was
joined by eight original bipartisan cosponsors, including the chairman
of the Judiciary Committee, Mr. Conyers; ranking member of the full
committee, Mr. Smith; Crime Subcommittee ranking member, Mr. Forbes;
and other members, Mr. Coble, Mr. Davis of Alabama, Mr. Lungren, Mr.
Feeney and Mr. Roskam. I would like to take a moment to personally
thank each of them for their support.
The purpose of H.R. 3013 is fairly simple and straightforward. It is
designed to prevent a practice that has regrettably become too common
in many of Federal Government's recent investigations into corporate
wrongdoing. I am specifically referring to the government's use of what
are called ``coercive waivers'' to gain access to privileged
communications that otherwise would remain private and protected under
the constitutional doctrine of attorney-client privilege.

{time} 1515

Coercing waivers of corporate attorney-client privilege has not
always been the practice among Federal prosecutors. Formerly, a company
could produce evidence of its ``cooperation'' with prosecutors by
providing insight into relevant corporate information, as well as by
providing general access to the company's workplace and its employees.
Unfortunately, since that time, memoranda issued by the Department of
Justice suggest that the policy has changed to one which now exposes
corporations to an increased risk of prosecution if they claim this
constitutionally protected privilege.
One of the first such memoranda was issued in 1999. The Holder
memorandum was designed to provide prosecutors with factors to be
considered when determining whether to charge a corporation with
criminal activity, and specifically allowed prosecutors, in gauging the
extent of a corporation's cooperation, to consider the corporation's
willingness to waive attorney-client privilege and work-product
privilege.

[[Page H13564]]

This memorandum was superceded in 2003 by the Thompson memorandum.
This memorandum contained the same language regarding the waiver of
attorney-client privilege and work-product privileges and also
addressed the adverse weight that might be given to a corporation's
participation in a joint defense agreement with its officers or
employees and its agreement to pay legal fees.
Today, the current Department policies relating to corporate
attorney-client privilege and work-product privileges are embodied in
the McNulty memorandum, issued in December of last year. While this new
memorandum does state that the waiver requests should be the exception
rather than the rule, it continues to threaten the viability of
attorney-client privilege in business organizations by allowing
prosecutors to request a waiver of privilege upon the finding of so-
called ``legitimate need.''
I fully recognize the Department may face hurdles when undertaking
investigations and prosecutions of corporate malfeasance. We look at
the victims of Enron's collapse, the nearly 10,000 individuals who lost
their jobs and pensions, their plans for their future, and know how
vital it is for Federal prosecutors to have the tools necessary to
prosecute these crimes and hold accountable wrongdoers who profit at
the expense of ordinary working men and women. However, I also believe
that facilitating and even encouraging such investigations should not
come at the expense of vital constitutionally protected rights.
H.R. 3013 therefore prohibits the demanding of constitutionally
protected materials as a necessary condition of receiving favorable
consideration in decisions relating to prosecution and sentencing. This
bill is supported by diverse groups such as the American Bar
Association, the Chamber of Commerce, the American Civil Liberties
Union, and the Heritage Foundation. That said, Mr. Speaker, I would
like to once again thank the bipartisan members of the committee who
have joined me in supporting this measure.
Mr. Speaker, I reserve the balance of my time.
Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may
consume, and I rise in support of H.R. 3013, the Attorney-Client
Privilege Protection Act of 2007. H.R. 3013 bars Federal prosecutors
from requiring corporations and individuals to waive their attorney-
client privilege as a condition of cooperation or for avoiding criminal
charges. H.R. 3013 would not prohibit a corporation from voluntarily
waiving the attorney-client privilege.
This bill is designed to remedy overreaching by Federal prosecutors.
It protects the attorney-client privilege, which is deeply rooted in
our jurisprudence and the legal profession. The attorney-client
privilege encourages frank and open communication between clients and
their attorneys so that clients can receive effective advice and
counsel.
In the corporate context, as we saw in the case of Arthur Andersen,
the life of a corporation can turn on a prosecutor's discretionary
decision to charge a corporation. That decision can have profound
consequences on our economy, the employees and the community; and it
should not turn on whether or not a company waives its attorney-client
privilege.
Cooperation in the criminal justice system is an important engine of
truth. However, prosecutors should not require privileged waivers as a
routine matter.
Mr. Speaker, I yield back the balance of my time.
Mr. SCOTT of Virginia. Mr. Speaker, I enter into the Record a letter
from the American Bar Association outlining their support for this
legislation.
Mr. Speaker, I would hope that the House would adopt the bill.

American Bar Association,

Chicago, IL, November 8, 2007.
Re H.R. 3013, the ``Attorney-Client Privilege Protection Act
of 2007.''

Dear Representative: On behalf of the American Bar
Association (``ABA'') and its more than 415,000 members, I
write to express our strong support for H.R. 3013, the
``Attorney-Client Privilege Protection Act of 2007.'' This
bipartisan bill, sponsored by Representatives Bobby Scott,
John Conyers, Lamar Smith, Randy Forbes, and eight other
Members of Congress from both parties, was approved
unanimously by the House Judiciary Committee on August 1 and
will be considered by the full House next week under
suspension of the rules. We urge you to vote in favor of this
important legislation.
H.R. 3013 is a comprehensive reform measure designed to
roll back a number of harmful federal agency policies that
are seriously eroding the attorney-client privilege, the work
product doctrine and the constitutional rights of employees.
Although all of these federal policies raise concerns, the
most problematic is the Department of Justice's policy--set
forth in the 2003 ``Thompson Memorandum'' and 2006 ``McNulty
Memorandum''--that pressures companies and other
organizations to waive their privileges as a condition for
receiving cooperation credit, and hence leniency, during
investigations. In addition, these federal policies contain
separate provisions that violate employees' Sixth Amendment
right to counsel and Fifth Amendment right against self-
incrimination by pressuring companies to not pay their
employees' legal fees during investigations, to fire the
employees for not waiving their rights, or to take other
punitive actions against them long before any guilt has been
established.
Despite the serious concerns raised by congressional
leaders, former Justice Department officials, and the legal
and business communities, the Department of Justice and other
federal agencies have refused to reverse or fundamentally
change their harmful privilege waiver or employee rights
policies. Although the Department reluctantly issued new
cooperation guidelines on December 12, 2006 as part of the
McNulty Memorandum, the new policy falls far short of what is
needed to prevent further erosion of fundamental attorney-
client privilege, work product, and employee legal
protections.
As demonstrated by the report that former Delaware Chief
Justice Norman Veasey recently sent to congressional leaders,
the McNulty Memorandum has not significantly reduced the
incidence of government coerced waiver, and federal
prosecutors continue to routinely demand waiver of the
privilege during investigations despite the new policy. (The
Veasey Report is available at <a href='http://www.abanetorg/poladv/
priorities/privilegewaiver/cjveaseyletter.pdf'>http://www.abanetorg/poladv/
priorities/privilegewaiver/cjveaseyletter.pdf</a>.) As a result,
the Department's new policy continues to seriously weaken the
confidential attorney-client relationship between companies
and their lawyers, which, in turn, impedes the lawyers'
ability to conduct thorough internal investigations and
effectively counsel compliance with the law. This harms
companies, employees and the investing public as well.
In addition, while the McNulty Memorandum bars prosecutors
from requiring companies to not pay their employees' legal
fees in some cases, it continues to allow the practice in
many instances. The new Department policy and other similar
federal policies also continue to deny cooperation credit to
companies that assist employees with their legal defenses or
decline to fire them for exercising their Fifth Amendment
rights. By forcing companies to punish employees long before
any guilt has been shown, these federal policies weaken the
constitutional presumption of innocence and undermine
principles of sound corporate governance.
H.R. 3013 would reverse these harmful policies by
prohibiting federal agencies from pressuring companies or
other organizations to waive their privileges or take certain
unfair punitive actions against their employees as conditions
for receiving cooperation credit during investigations. At
the same time, however, the bill specifically preserves the
ability of prosecutors and other federal officials to obtain
the important, non-privileged factual material they need to
punish wrongdoers and enforce the law. In our view, H.R. 3013
would strike the proper balance between effective law
enforcement and the preservation of essential attorney-client
privilege, work product and employee legal protections, and
we urge you to support the bill during next week's floor
vote.
Thank you for considering the views of the American Bar
Association on this subject, which is of such vital
importance to our system of justice. If you have any
questions regarding the ABA's views or need more information,
please ask your staff to contact Larson Frisby of the ABA
Governmental Affairs Office at (202) 662-1098.
Sincerely,
William H. Neukom,
President.

Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Scott) that the House suspend the rules
and pass the bill, H.R. 3013, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.

____________________