Federal Criminal Investigations of Business Entities Under the McNulty Memorandum: How Much Has Really Changed?

Recently, the United States Department of Justice (DOJ) announced revisions to its policy and procedures for conducting criminal investigations of business entities. These changes are set forth in the Principles of Federal Prosecution of Business Organizations, issued by Deputy Attorney General Paul J. McNulty on December 12, 2006 (the McNulty Memorandum). The McNulty Memorandum supersedes and revises guidance contained in the January 2003 Principles of Federal Prosecution of Business Organizations, which was issued by then-Deputy Attorney General Larry D. Thompson (the Thompson Memorandum).

The purpose of both the McNulty Memorandum and the Thompson Memorandum is to provide guidance to prosecutors making the decision whether to bring criminal charges against a business entity. The McNulty Memorandum reaffirms the DOJ’s policy that business organizations should be treated no more or less leniently because of their artificial nature. The McNulty Memorandum also reaffirms the nine factors to be considered by prosecutors when making charging determinations. Specifically, the White Paper outlines the following topics:

• Changes to the Requirement That Prosecutors Consider a Business Organization’s Waiver of Its Attorney–Client Privilege and/or Attorney Work Product Protection
• Changes to the Requirement That a Prosecutor Consider Whether a Business Ceased Indemnifying Its Employees’ Attorneys’ Fees

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