[Congressional Record Volume 153, Number 175 (Tuesday, November 13, 2007)]
[House]
[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 http://www.abanetorg/poladv/
priorities/privilegewaiver/cjveaseyletter.pdf.) 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.

                          ____________________