ABA Takes Aim at Thompson Memorandum, Again

Continuing to criticize what it sees as federal prosecutors’ overzealous tactics in fighting corporate fraud, the American Bar Association issued a formal policy statement yesterday objecting to the Justice Department’s policy of urging companies under criminal investigation to cut off the payment of legal fees to its employees. This is the second time in a year the ABA has issued a policy statement taking direct aim at the DOJ’s Thompson Memorandum.
It’s a happy coincidence for the ABA that this latest policy recommendation comes on the heels of last month’s stinging ruling by Judge Lewis Kaplan that prosecutors can’t pressure companies to stop paying legal bills for indicted employees. U.S. District Court Judge Lewis Kaplan ruled in the KPMG accounting fraud case that the feds violated the constitutional due process rights of indicted employees by pressuring their employers to refuse to pay their legal costs.