The Fifth Amendment, Vicarious Liability, and the Attorney-Client Privilege

The policy statement discusses at great length why a waiver may be necessary. For instance, it states that “a corporation's cooperation may be critical in identifying the culprits and locating relevant evidence.” It further points out, “[i]n some circumstances, therefore, granting a corporation immunity or amnesty or pretrial diversion may be considered in the course of the government's investigation.” Importantly, while the Memo states that waiver of the privilege is not required, it may be necessary in “appropriate circumstances.”

Unbelievably, there is no guidance on what those appropriate circumstances might be, and it is left to the discretion of local decision-makers as to how to proceed. Indeed, the description of how waivers can be helpful would arguably apply in every federal investigation: “[s]uch waivers permit the government to obtain statements of possible witnesses, subjects, and targets, without having to negotiate individual cooperation or immunity agreements. In addition, they are often critical in enabling the government to evaluate the completeness of a corporation's voluntary disclosure and cooperation.” Such language can easily be interpreted to mean that there is no case in which seeking a waiver is not appropriate. At minimum, federal prosecutors are being given the message that “it never hurts to ask.” While it is clear that corporations are not to be treated any more or less harshly than individual targets, the DOJ's current policy pronouncement impacts them in different ways. A corporation, in a legal sense, is more vulnerable than a “two-legged” defendant for at least two important reasons: 1) An organization has no Fifth Amendment privilege against self-incrimination; and, 2) An organization is vicariously liable for the actions of its agents. The attorney-client privilege is one of the few areas in which an organization has comparable rights with individual targets.