Tuesday, December 12, 2006

Feds Ease Tactics on Corporate Scandals

Tuesday December 12, 2006 4:01 PM


Associated Press Writer

WASHINGTON (AP) - The Justice Department on Tuesday eased its tough legal tactics against scandal-tainted corporations, requiring prosecutors to get approval from Washington before seeking confidential information between firms and their lawyers.

Moreover, the government cannot penalize corporations that pay attorney fees for their employees - which some prosecutors have viewed as a sign of not cooperating with their investigation.

In a New York speech to the Lawyers for Civil Justice, Deputy Attorney General Paul McNulty vowed to ``safeguard every tool prosecutors need to fight fraud and continue our aggressive efforts in rooting out corruption in our financial markets to protect the interests of the investing public.''

Still, McNulty said, the Justice Department ``supports the sanctity of attorney-client privilege. We encourage full and frank communication between corporate employees and their lawyers.''

The shift in the Enron-era policy comes after complaints - led by a coalition of conservative and liberal legal experts alike - that the Justice Department was unfairly pressuring companies and employees to cooperate in investigations.

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