Say Good-bye to the Attorney-Client Privilege

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"If the government had access to the communications between a client and his lawyer, the lawyer would be nothing but a government agent, like Soviet defense attorneys whose official role was to serve as adjuncts to the prosecution."

~ Paul Craig Roberts & Lawrence M. Stratton The Tyranny of Good Intentions

Once upon a time the US Department of Justice respected the legal rights that make law a shield of the innocent rather than a weapon in the hands of government. No more. What the great English jurist William Blackstone called "the Rights of Englishmen" have been eroded beyond recognition.

The last remaining right — the attorney-client privilege — is under full-scale assault by DOJ prosecutors in the tax shelter case involving the accounting firm, KPMG. The Justice Department has demanded, and the accounting firm has agreed, to waive the attorney-client privilege for communications between lawyers and KPMG employees involved in marketing tax shelters that the IRS has challenged.

The attorney-client privilege was long championed by jurists because they realized that the privilege promoted equality under the law. Convictions can result from a lack of access to legal knowledge as well as from actual wrongdoing. To ensure defendants would avail themselves of legal counsel, their communications with attorneys were made confidential, outside the reach of prosecutors.

In recent years, the DOJ has taken the position that winning its cases is more important than historic rights centuries in the making. Arguing that the innocent have nothing to fear from their attorneys’ disclosures of their confidences, the DOJ has employed various means of subverting the attorney-client privilege.

Sentencing guidelines from the US Sentencing Commission, a commission appointed by the White House, have greatly strengthened the ability of prosecutors to attack the attorney-client privilege. Whether or not a company is indicted and the severity of punishment depends on its "cooperation" with the investigation.

A January 2003 memo written by Deputy Attorney General Larry D. Thompson, currently a fellow at the Brookings Institution in Washington, DC, defines "cooperation" in a way that drives a wedge between a company and its employees. A company that pays its employees’ legal fees is defined as uncooperative.

Faced with the threat of being declared uncooperative, KPMG announced that it would pay its employees legal fees only if they waived the attorney-client privilege and "cooperated" with the investigation. Invariably, "cooperation" requires self-incrimination and negotiation of a guilty plea. By making it impossible for a defendant to defend, the government never has to have a real case.

Americans need to think seriously about the quality of "justice" that is coming from the Justice Department. Prosecutors have defined "cooperation" as aid in convicting oneself or a fellow employee, as waiving all constitutional rights and privileges, as betrayal of fellow employees, and as helping prosecutors create the appearance of guilt even when no crime has been committed.

Among the pending victims in the KPMG case, Jeffrey Eischeid faces 20 years in prison for marketing KPMG tax shelters that experts said were legal.

The IRS has the right to challenge the tax shelters, and the accounting firm has stopped marketing them. But for the DOJ to retroactively declare them illegal illustrates the precarious position of a defendant today. Whatever he has done can be declared illegal after the fact.

The DOJ has also disposed of the legal principle that there can be no crime without intent. Neither Jeffrey Eischeid nor other KPMG employees were knowingly or intentionally selling illegal tax shelters. The products were approved by KPMG’s professional responsibility committee, and the IRS’s challenge does not mean a crime was committed.

However, DOJ prosecutors have become experts at creating the impression that crimes have been committed. By stripping away a defendant’s rights, prosecutors have the power to coerce a guilty plea, crime or no crime.

Conservatives who prattle about Americans living under a rule of law are speaking of a bygone era. The rule of law came to an end during the New Deal when President Franklin Roosevelt turned Congressional statutes into authorization bills for federal bureaucrats to legislate via regulations.

Today there is even less accountability. Appointed officials make criminal law without even an authorization bill from Congress. The Sentencing Commission’s "proposals" become law unless Congress vetoes them. What we are witnessing is the emergence of a fascist legal order in which law and legal procedure are whatever unelected officials decide serves the interest of government.

How else can we explain how the four foundations of our legal system — no retroactive law, no crime without intent, no self-incrimination, and the attorney-client privilege — have been swept aside in the federal case against KPMG?

Dr. Roberts [send him mail] is John M. Olin Fellow at the Institute for Political Economy and Research Fellow at the Independent Institute. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions.

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