U.S. Moves to Restrain Prosecutors

The Justice Department placed new restraints on federal prosecutors conducting corporate investigations yesterday, easing tactics adopted in the wake of the Enron collapse.
The changes were outlined in a memorandum written by Paul J. McNulty, the deputy attorney general. Under the revisions, federal prosecutors will no longer have blanket authority to ask routinely that a company under investigation waive the confidentiality of its legal communications or risk being indicted. Instead, they will need written approval for waivers from the deputy attorney general, and can make such requests only rarely.
Another substantial change introduced yesterday prohibits prosecutors from considering, when weighing whether to seek the indictment of a company, whether it is paying the legal fees of an employee caught up in the inquiry.
The revised guidelines follow criticism from legal and business associations and from federal judges, senators and former top Justice Department officials that the tactics used in recent years against companies like the drug maker Bristol-Myers Squibb and the accounting firm KPMG were coercive and unconstitutional.