Ah, another battle over attorney-client privilege.
The issue faded somewhat following the Justice Department’s re-issuance, roughly a year ago, of corporate charging guidelines. The Filip memo, named for former Deputy Attorney General Mark Filip and etched in the U.S. Attorney’s Manual, bars federal prosecutors from evaluating a corporation’s cooperation based on a waiver of attorney-client privilege.
When the guidelines were issued last August, corporations cheered. Corks popped. Confetti fell. But the privilege issue has re-emerged in a big way — in the New York attorney general’s probe into Bank of America’s takover of Merrill Lynch.
On Tuesday, New York Attorney General Andrew Cuomo’s office fired off this letter to BofA’s lawyer, Cleary Gottlieb’s Lewis Liman, accusing the bank of hiding behind the privilege to avoid answering questions about $3.6 billion in bonuses to executives at Merrill Lynch and discussions officials had with in-house and outside lawyers about Merrill’s “cascading” losses.
Then the office got really prickly:
The law is clear that Bank of America and its officers cannot assert an advice of counsel defense for their decisions, and at the same time persist in refusing to disclose the substance of the conversations with counsel. Accordingly, we request that Bank of America reconsider its decision to prevent this Office from adequately probing these crucial issues. We provide you with this final opportunity to reconsider. Otherwise, we will proceed with our charging decisions without giving credit to the advice of counsel defenses that Bank of America has not permitted us to test.
Liman responded in kind. In a Sept. 8 letter obtained by Main Justice, the bank’s lawyer denied using an advice of counsel defense, calling the basic premise of Cuomo’s letter “simply wrong.”
Bank of America has not put at issue the subject matter of any advice of counsel. Nor has Bank of America offered reliance on legal advice as a justification for its disclosures. Bank of America’s position has been clear and consistent throughout: the Proxy Statement and related disclosures complied with all applicable laws, rules and regulations.
When asked, BofA and Merrill employees under subpoena said that they had relied on counsel’s advice, but that’s different from using the attorney-client privilege as a shield, Liman wrote.
Bank of America has not asserted reliance on counsel as a defense to an adjudicating authority. Witnesses under subpoena answered a question that they were required to answer by your Office. Neither Bank of America nor the witnesses chose that question to be asked. Your Office chose to ask it. Once the question was asked, the witnesses and Bank of America were required to answer it truthfully. The answer to that question was not privileged. No one has sought to take unfair advantage of the assertion of the privilege by hiding information from your Office or anyone else.
The lawyer also accused prosecutors of repeatedly declining to meet with BofA’s counsel to hear the bank’s side of the story — “including why there is no basis for seeking to invade the attorney-client privilege here.” And he noted that the bank’s lawyers have cooperated in the investigation consistent with the Filip memo, SEC policy, and New York State bar.
“These policies uniformly admonish against seeking waiver of the attorney-client privilege in an investigation in all but the most extreme circumstances,” he wrote.