Jeff Kaplan's Archive

In January, to the surprise of many, the Sentencing Commission issued draft proposed revisions to the Sentencing Guidelines provisions on C&E programs. Some of the proposals have been the source of confusion within the C&E community, such as a section that would require managers to “be aware of the organization’s document retention policies and conform any such policy to meet the goals of an effective [C&E] program…” This is perplexing because there is no similar awareness requirement for areas of greater risk for most companies – such as fraud, corruption and antitrust; one can only hope that before the final proposals are sent to Congress in May that this provision – which could skew risk mitigation in many companies – will be dropped.

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The year that just ended was a momentous one for the compliance and ethics (C&E) field. It was marked, among other things, by the imposition of the largest criminal fine in U.S. history (in the Pfizer fraud-and-abuse prosecution), as well as the largest penalties ever imposed in cases involving OSHA, FERC and OFAC related violations. And, by all accounts, there is more – perhaps much more – to come.

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A threshold question which often arises in conducting C&E program assessments is whether to proceed under the attorney-client privilege. There is clearly a benefit to a privileged assessment, given the litigation risks posed by the type of self-critical information which an assessment often generates.

Perhaps more importantly, when employees fear that comments made in assessment interviews might be used by their companies’ adversaries they are less likely to be candid in providing information about the C&E program. And that, in turn, can lead to a less meaningful assessment. (Based on similar considerations. while not a matter of attorney-client privilege, interviewees should be assured that the identity of sources of information obtained in the assessment will not be shared even within the company.)

However, the mere involvement of attorneys in an assessment will not, by itself establish the privilege.

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