your fathers gas station and like to interview. i said sure. he says, his first question, the very first thing he asked me is, what was it like growing up in such a historic place? >> visit guidance books which specialize in civil war history spent my father was a great tester collector. my mother love the civil war but also was there in amber with the women in the west. so i'm sure they came up with guide on books. >> then on american history tv on c-span3 hear about the founding of scottsdale, arizona, state historian marshall trimble. he shares the story of winfield scott, a civil war hero who saw potential and arizona salt river valley. >> he just graduated from seminary school and been assigned to a church when the civil war broke out and lincoln called for volunteers. he really wanted to get into it so he went back to his hometown

in new york, little tiny town committee started recruiting and raising his own company of soldiers. i think he recruited about 333 of his own cousins and his bible study class. he even recruited the town band. >> we will visit the winter home of architect right-click right spirit really example of how to live in the desert southwest. frank loyd wright used as a laboratory to accuse working to great a new kind of architecture for america. >> the c-span cities tour saturday at noon eastern on c-span2's booktv and send afternoon at two on american history tv on c-span3. working with our cable affiliates and visiting cities across the country. >> at a conference on health care law attorneys and federal

officials discussed the justice department's execution of medical fraud cases. this is part of a daylong conference sponsored by the american bar association. it's just over one hour. >> good afternoon, everyone. welcome back from lunch and welcome to our panel impact of djs corporate healthcare, fraud enforcement strategy on providers and defense counsel. i guess of the theme for the program this year is change, for those of us who spend our time representing healthcare companies and individuals in civil and criminal enforcement actionsactions, the change thate been focused on for a while is

the change created by deputy attorney general sally yates, who last september, september 2015, promulgated the individual accountability memo. and that memo is really more evolutionary than revolutionary i think. it's the latest iteration in the governments ongoing efforts to try and shift focus to emphasizing the role of individuals in alleged corporate fraud, and to hold them accountable. we are going to discuss that policy today. we will call it the yates memorandum. deputy attorney general yates has said she doesn't like it to be called that. she would prefer to have a called the individual accountability memorandum but defense attorneys, we like every

opportunity we can to get under the governments skin so we keep calling it the yates memorandum. my name is david douglass, i'm a partner in the washington, d.c. office of shepherd in hampton, where i specialize in representing corporations and individuals have been wrongly accused of fraud. in doing that it's a large my role to protect my clients from people like the gentleman to my right, rick cartooning, but i will let you introduce myself. >> i see how this is starting out. my name is rick partridge in part on the net states attorney for the northern district of new york. i'm in my twenties year with the department of justice, first 13 of which were spent as an ausa doing violent crime cases, some white-collar crime work and all manner of things that we do in our office at the last seven years i've had the privilege of the united states attorney, and during that time have a healthy

new perspective for all the different kinds of challenges that we face in this area. i have also served on the attorney generals advisory committee, and that's been a privilege under both attorney general holder and attorney general lynch, encounter note a good bit about the departments viewpoint on things like individual accountability. nice to be here, thank you. >> good afternoon. my name is leo reichert. general counsel of wellstar welr health system system, integrated delivery system in metropolitan atlanta. we have about 11 hospitals. we have a large medical group, about 1000 providers in the medical group, about 200 and those were locations around the city and run 20,000 team members total. we had the privilege of acquiring the facilities that were subject discussion yesterday which is how we went from five hospitals to 11 hospitals last year and i'm william pericak. i've been with my firm for two

years. i do that i had a 25 year career at doj, including a stint in the fraud sections healthcare fraud unit supervising cases in brooklyn, in houston and in baton rouge and really getting a flavor for and including healthcare fraud matters, which was a more recent trend of the healthcare fraud unit, and getting a flavor of what the department wanted to do with the corporate healthcare fraud context. >> thank you, bill. the basic elements of the yates memo but let me just put into the broader context and tell you why it's important we all understand the substance and applications of the yates memorandum. what we say to clients, particularly and false claims act investigations that every civil false claims act case is also a criminal false claims act case, both because there is a criminal false claims act statute although we don't talk about it much but also because

some of the underlying conduct that can lead to false claims act of liability is criminal. for example, the antikickback statute. and so in many respects however that threat has been more theoretical than real, and many times practitioners are tended to ignore the criminal cases and say the criminal folks are not looking at it. but what the yates memo is designed to do is to require the civil attorneys to cooperate with their criminal counterparts to make sure the department of justice has looked at both civil and criminal liability in every false claims act case and two other plan for resolving individual accountability, the civil or criminal. so the yates memo, at least in the short term and we can talk later about what its long-term implications are, but in the short term what has made the theoretical very real. if you were handling a false claims act case and dealing with

the civil ausa ausa, now is a mr of dhl testing doj policy, there's a criminal ausa will be looking at that case and considering potential criminal liability as well. so there are two important considerations. one, if you're representing the corporation, what does it mean for cooperation credit? and then the second, the our ethical concerns that relate to representing the relationship between the corporation, your client, and its employees who are not your client. so this is something that has changed the way we practice, and it has focus our attention on criminal, or liability. with that let me to start with the basics and ask rick, what is the djs policy with respect to cooperation credit for a company? >> the policy is straightforward and it is this.

for a cooperating company to get credit, as a threshold matter, it needs to provide all relevant facts relating to the individuals responsible for misconduct, all relevant facts. it's a threshold analysis, is not a sliding scale analysis. there is no partial credit given for cooperation that fails to meet the threshold. all relevant facts. so what does that mean, all relevant facts? it doesn't mean theories, legal theories or conclusions. it means facts, what happened, who did what, who promoted the conduct, how and when did it occur, who is responsible for approving it, what documents show and described how it happened and how the events unfolded. so those are some of the basic things that we are looking for when we say that. we are trying to get to the truth of what happened we are not looking for help or somebody

necessarily to be served up. we want to understand the facts pick sometimes they can be some question or confusion about what we are looking for. i think the deputy attorney general has said and others you should contact the prosecutors if you have questions. you should engage in dialogue with us. i know my folks talk rotini with defense counsel. we are as open as we can be. sometimes we can't let everything out for strategic reasons but we tried to develop a dialogue so we can help let you know what we are looking for. and the final point i will say is i don't think this is a new concept as you alluded to. we have always been interested in what individuals are doing, who is responsible individual. corporations act to their employees, to their executors. we all understand that. but it can be difficult sometimes to untangle the different levels of a corporate structure. there can be thousands or millions of documents involved in the corporations pics

sometimes operations are overseas, can be very difficult to obtain witness testimony or information. these are all special challenges in these white-collar cases. and so that is really i think the purpose behind it all. >> we talked about cooperation credit for years. what we are talking about is criminal prosecutions of organizations and what does that mean for credit under the sentencing guidelines. but as the slide presents the question, is of the yates memo limited to criminal investigation? >> it is not. it applies to civil investigations as well. our assistant attorney general, excuse me, associate attorney general gave a speech recently and made clear that this cooperation policy applies as a threshold matter in civil cases as well. we use cooperation for determination of whether we should go forward with what charges we should bring, how to determine penalties and damages.

this is a factor that we utilize, laid out clearly in u.s. attorneys manual that are important in our analysis. so they apply on both sides of the equation. >> in a criminal case, in a civil case should i come to you and make my same pitch for getting some kind of reduction in the civil damages and penalties by virtue of my outstanding cooperation? >> absolutely. i think that's clear, and to think we have a record in her office certainly of crediting cooperation and a lowering damage calculations in situations where we have clear cooperation by the company that we are looking at. >> so then the question that naturally leads to is, what are the policies and strategies that doj is pursuing that creates this tension between companies and employees? i will direct that one to build.

>> thank you, david. i think the most important one for this group to be focused on is that doj is applying traditional investigative techniques, traditional law enforcement investigative techniques to healthcare fraud, whether the civil or criminal, they are applying techniques such as wiring up cooperators and sentiment into talk to hospital administrators using search warrants, using other investigative techniques, such as bugs and offices, cameras, gps trackers, gps trackers, all kinds of techniques. traditionally associate with organized crime cases. the section is now taught, and i know that because i taught it when i was there about four years ago, different and festive techniques to use in these investigations. to give you a couple of recent examples, in the riverside hospital case which was a case out of houston, texas, i supervise that case back in the

day and in that case the cooperator, that was a a data-driven case anything cured some other speeches about how is doj finding these leads. it's relator is and it data-driven analyses. in that case it was data-driven and the cooperator was identified, somebody who headed drug problem and the person was enlisted to cooperate to wear aa body wire to go in and have conversations with a hospital administrator which led to incriminating tape recordings. a hospital administered was subsequently arrested and agreed to cooperate, plead guilty and cooperate on the strength of a very strong incriminating tape recording. as rick will tell you from the good old days of doing drug cases, they used to call them dry conspiracy cases in drug cases. a historical conspiracy was a very tough case to prosecute, what fbi, dea, all the

government agencies wanted to do was go out and do wiretaps, recordings, gets people in the act and that same thought process is now being transferred to corporate healthcare fraud cases. the other example is the tenet hospital case which i was not personally involved in my did start under during my time. in that case the agent went out with i think with the fraud section trial attorney and in the early morning sort of wake-up confrontation, knocked on the door of the suspected kickback recipient, confronted her, and she confessed and agreed to cooperate. similarly, they confronted a hospital administrator, it is all the card without the knowledge of the hospital, counsel for the hospital. this all occurred in the background without anyone realizing what was going on. it's this type of proactive investigation that is occurring in both civil and criminal healthcare fraud investigations.

>> so leo, when bill comes to you in the case and says i've got good news and bad news. i've lobbied rick and he is down to double damages judgment i'm sure he would be down to one point five, one point five damages, minimum number number of penalties. this is well within what we expected. it's a good disposition for the company, but he wants you to serve up some of our key people. talk about what that means to you as general counsel and the challenges that presents. >> that's not a good day to have that happen. we have an organization, i shared the yates memo with the leadership team when it came out as an example of what's going on. everybody knows about it, but certainly the leadership team is aware of it.

so what's the concern? the concern is there going to be less inclined to want to cooperate with the investigation. other leaders in the organization, employees may want to lawyer up early in an investigation. and may or may not be something that in another case prior to this coming out they would've had that focus on, now knowing there's a focus on the sort of individual accountability and executives and organizations are being charged, they could be less forthcoming. if they go out and select their own counsel or want to select their own counsel, that can obviously be a problem. if it's not somebody who's expense in this area, it's not that we don't want people who need counsel to have appropriate counsel but these cases are unique and you want somebody who's going to protect the rights, their rights. but my duty is to represent zealously my client. i want someone is going to cooperate with us, consider joint defense and so forth. the other area, some discussion

and conversation about the upjohn warnings where i have to make clear and it would make clear if he is representing us that while we're talking to an individual, and employ, we represent the organization. we have to be real clear about that. we represent the organization and often individually which leads to a question of whether they should get their own lawyer. >> i should've mentioned at the outset, we invite questions from the audience throughout the presentation, although unlike me, you all will have to make up your own questions. i wanted to ask rick just, what is your sense from your work on u.s. attorneys committee of whether different offices are in their approach to these issues come if you have any general observation? >> i think it's fair to say when i started, use my office as an example of it were not doing a lot of affirmative healthcare fraud work. a lot of the small offices were

not really equipped in their civil divisions to do more than defensive work. during my tenure i've actually doubled the size of my civil division and hired some affirmative civil enforcement lawyers who have expertise in this area. i would say i'm not alone. i think there's been a lot of districts. i'm talking about districts other than the districts with which we are most familiar that it engaged in this work for a lengthy period of time, boston, massachusetts, philadelphia, south florida, southern district on eastern district of new york. those are obviously hot spots with lots of resources. i think there's been a redirection of resources and an emphasis as well on something the individual accountability memo requires now, and that is to have our lawyers in the civil division and criminal divisions work in parallel, work in tandem with each other. that's something that we do now as a matter of routine, as a

matter of course. i think it is made our work better. our lawyers are working well together. they can bring the tools and techniques from each side of the house to bear on an investigation and they can really drill down more quickly on the facts and get to a quick resolution. at the end of the day fats in the interest of justice and in the interest of our department and in the interest of certainly people who are affected spirit i think it may be interest in the department but i'm not so sure in the department of justice. that's a cocktail. >> i see how this is going. >> it's interesting, if you dig around in the archives, maybe 10 or 15 years ago back when massachusetts would really sort of pioneering aggressive prosecution under the false claims act, and mike was one of the first, you can actually find an article he wrote in the u.s. attorneys bulletin. i have a newsletter here.

where he was saying, i don't know why, that he was saying in their office back then, civil and criminal work hand in hand. he gave examples about how well it worked and he was surprised then more use attorneys offices were not doing it. and in particular he was commenting a civil lawyer says well, i'm going to send a subpoena. criminal lawyer says i'm going to send an agent with a search warrant. so it's taken a while but it seems like doj has adopted that approach or going in that direction. >> it really helps us get at some difficult proof challenges in white-collar cases. it is not always easy to prove intent the on a reasonable doubt. when we have both sides of the house involved in a case, again, u.s. attorney, my supervisor staff, we can help make assessments that it think really a more detailed -- tailored to the facts of this case. sometimes white-collar cases can languish as criminal lawyers tried to develop the evidence

that is challenging to get in aa corporate setting for the reasons i described. i think this is a good development. i think we are seeing it kind of the use much more frequently across the country. >> bill, a question, should a lawyer who represents the company also represent the employees? give us a little grounding of the conflict of interest rules and why that is such an important question. ..

again, we always knew there were employees but now it is so overt i think this is a very weak scenario there's going to be an individual conflict here. >> you all follow the penn state investigation into what happened there with the general counsel at the university. this is where the general counsel obsolete obviously represent interests of the university and the president of the university, vp of finance led this investigation. there was a casino front for the attorney general of the commonwealth and she met with those folks and one morning and said would you tell me is not confidential.

i maytell the board of trustees . and that led to an uptown warning and in her defense, the attorney general said i'm not going to ask you about anything privileged. you are not a target so she also showed up for the grand jury testimony. as their lawyer, she was later called by the attorney general's office against those folks and on behalf of the university waived the privilege and she was representing that individual and as you can imagine the whole thing blew up. she's no longer with the university and the charges to those three gentlemen that were derived from her grand jury testimony fell to a lower court and that's something that i get all the time. i work with the team every day, they say can you work

with the cfo with these clients meeting everybody every day and then you have to, as part of asking these questions to be represented and that's why it brings in. >> obviously during this next! if i can't represent this employee, if i'm representing a corporation what should the relationship be? you've shifted the role from conservative to moderate and you're pointing at me. >> the way we structure to go forward so that the corporation and employees can work together and share privileged information is that we enter into a common interest agreement. they are commonly called joint defense agreements but the correct answer is the common interest agreement need not apply only to the situations where they are adverse interest but a common interest agreement is, at its

simplest is that the parties have a common legal interest. it doesn't have to be an identical legal interest but it has to be a primary interest such that their interests are sufficiently aligned that it makes sense for them to share privileged information. that's really all it is. most of the ones i frankly do our handshake because i know the lawyers that i'm inclined to enter into an agreement with but i've also done them, they can be multiple pages, particularly in large investigations of multiple corporations where there are many interests to consider and documents, proprietary information and the like so the concept is very simple. we agree that our interests are aligned, we seek to protect privileged information we received from the other party under a common interest agreement, you're not obligated to

provide common interest information but you're entitled to as we worked together to forge the investigation, he has to preserve even though i wasn't obligated to provide it, if i do so to preserve. >> and actually, it directs into the doj, what is the view of the joint defense and that cannot just note you clearly are a us attorney but you haven't made that disclaimer because us attorneys don't care what justice thinks that. >> that's not true. joint defense agreements, i think there's two rules that are important for our discussion today. one, participation in a joint defense agreement does not make a corporation eligible to receive . that's an important point and we do not request that a corporation, to the second

point, refrain from bringing into such an agreement, that is a matter for the corporation to determine area we note however that sometimes disagreements can complement kate corporations ability to cooperate because they may have derived information from an employee and that employee may be represented and there may be some bar or prohibition from a company sharing information with the prosecutors that can present a challenge so i think that challenge should be identified and weighed such by the court. >> and hard to know how that plays out because privileged information then they can't share with you , not as it your information so you are getting less so sometimes these kinds of an arrangement can complicate both our jobs. >> so let's turn to one of

the difficult issues that arises in these cases, you said in your investigation it's clear that some folks have done something wrong. they are probably also and are under investigation or maybe, they are also they brought in intellectual capital, particularly in those people who are publicly traded companies. those people have their own market value. these things bring company morale down more than firing a bunch of people when something is under investigation and that has ripple effects so they're going to dump all that on you. >> so order question, i didn't ask which is, if you are earlier in the investigation and don't really old, you can have employees getting nervous about things and they are reluctant to talk and they don't know that they were

wrong, how do you work in that? they may or may not counsel and you have to be very careful and you know there's done something wrong or you don't, we're careful about anything in these allegations, whistleblowers have protections against statutes federally and there could be state employee law so you have to be very careful how you handle those things. we have like others looked for different things like if somebody administratively and paying them so if they've gotten nervous early on and we don't necessarily think they are wrong we are trying to work through the issues, you might find them on administrative suspension. back in the retaliation even if you are playing, taking them out of a job so we have a lawyer on the other side saying this is ridiculous, people are out of a job just because they are there but i had the opportunity to delve into corporate interests and not the interest of these employees so you have to look at these things very carefully and the circumstances analysis but

there are times you have to do that. >> bill, what do you do about the employees that say i don't want to talk? >> that's the $64,000 question. how do you react in representing the corporation, i know that the doj, i have to report to them what my investigation found and my issues and do a solid investigation and what did i do about that employee? i know that in there we pointed this out but in addition to the individual accountability memo, there's a website at doj which has all kinds of things like frequently asked questions and to answer one of the frequently asked questions is that the company i think rick would echo this, is not required to take specific actions against employees but

their response to the misconduct is something that doj is going to take into consideration and until recently i think the court thought okay, we can do certain things, wecan take interim steps. we might be able to dock a little bit of pay . but in the amber case, the doj actually exacted a penalty on the company for failing to discipline to the extent that doj thought was appropriate a senior executive who doj felt was involved in the misconduct so it's very problematic now what about an employee as leo pointed out, you don't always know who the whistleblowers are and you can take action and steps for retaliation. if you don't take action against them, and doj think you are culpable you may pay a financial penalty and they

may be one and the same person. the whistleblower may be the most culpable person involved. what do you do in that case? obviously i think i'm supposed to answer those questions because there's no easy answer. it's a very difficult situation to find ourselves in class in-house, when we do something like this to your audit committee, your board about what you find, they're going to ask what are you going to do if you have identified wrongdoers whose actions use something that wasn't an accident, this wasn't a mistake or misinterpretation. in that case, it is probably a pretty easy decision. your board is going to do that and given the government's view of things, that's what they're going to want to do and also protect your representation. and sometimes there can be risk of retaliation. that claim is going to be made if it's a good one but you can go ahead and try and implement the problemunder your corporation , that you

have months later just to be clear, the department doesn't require a company take into specific acts against an employee in order for it to remain eligible for cooperation but that is one of the factors to look at, that does present a conundrum for the corporation. we want to know what the media action has been taken, what the company does to about the wrongdoing employee , a lot about where the attitude is and that is a factor that we assess when we are determining what charges to bring, what penalties or damages to assess and the life. >> i want to add a little more gray to this situation which is when it's not clear, when it's not clear how involved the supervisor was, if the supervisor really knew where it was negligent, what

do you do in that situation? there's a little bit of answer that goes on with doj because they're not going to tell you to terminate someone. they're not going to tell you what to do but you say i'm thinking of recommending that we keep so and so on and you look for a reaction. if it's a glum look then you say although i had in mind. >> they are trained not to react. >> but you do, you try to feel this out and you try to propose possible solutions to gauge what did reaction is so you can advise your client on what's going to happenbecause at the end of the day , why should the corporation pay 10 percent more and that was a multimillion dollar settlement, why should they pay 10 percent more if they didn't adequately consider, maybe we should take more action, greater action against this employee?it's a difficult situation to be

in all the way around x and it sounds a little bitfrom what leon was saying , as a practical matter it's probably going to be very difficult to say to the government we'veidentified this person , the default certifications or even this person who seems to be within the zone of misconduct but we need to talk to us, we are keeping them on the payroll. but you're saying not only do you have a problem as a prosecutor, it's a broader problem about what that says about the board of directors, shareholders, customers to have someone who engaged in wrongdoing or refuses to claim to do what they did. >> i would certainly sink seek counsel on it but if you have an investigation and you've got to ask questions of an employee and that employee has an obligation to talk to you. and again, recognizing that there are risks for the

attorney for theorganization, i expect them to comply and we have a dedication to do that . and sometimes they ask to bring an attorney in. if we have a conversation, we don't have the right to bring an attorney and so in circumstances of employment disputes, we wouldnot allow them to bring an attorney. we would talk to a superior for our employee . >> in some instances, i've encountered this where that person is an attorney when they won't talk to you. they might be a zealous advocate, not a heartless advocate under the cloud of an investigation, they're never going to work again so it's not something that you want to do precipitously so sometimes i have recommended that let's get that person an attorney, let that attorney clarify the person's thinking . >> that's absolutely true, a lot of times it's in the

interest of the company for the employees to have an attorney but frankly to have an attorney, everything works better when you have an attorney. the folks who say they know what the likelihood of first consequences to the employer are or what information that employee has to share and it may be in the employees best interest to share and work together on that so i don't mean the first step is determinants, you try to work through it and see if there are ways you can cooperate and to everybody's benefit. >> we've been touching on that plus this notion of multiple representation. i generally of m of the view that hiring employees is some of the best companies can spend after the money. because it's much easier when those employees have their own advocates that frankly help them to remember what happened and be free and talk with them clearly but also so that i'm not the bad guy when rick starts asking tough

questions and saying well, they have their own attorney but talk to that person, i think it would be hard maybe for rick to have cooperated if i i've got a privileged way but if there's an employee with a lawyer, well, i'm telling you all ican go tell you . it might be harder for you to communicate i have cooperated if i don't have some transparency with that individual. >> we all remember the days not too long ago when position was that we should not pay for the lawyer to represent the employee and that was a constant memo so now i think i'll defer to rick on this but the position is if you want to pay for employees to have lawyers, god bless you. it's all for the good and they should not hold it against you. >> so now we have all this

privileged information but i'm desperate to communicate it to the government, get a good dealfor my client . bill? what do we think? >> the first thing is that you have to decide whether or not to waive the privilege and i think the first question may be for rick is what is position on waiting privileged? >> i think the rule there is clear. we do not require a waiver of the privilege or ask for the waiver and recent speech issues challenge the defense or her office let them know if some prosecutor asks their client to waive the attorney-client privilege so that is not something that we are going to do. the situation can change however if there's an advice of counsel defense based and in those situations,

communications with in-house or outside counsel that occur prior to or contemporaneous with the wrongful conduct, those can be expected to be produced, we are not required to just take on pay representation, if this person acted on advice of counsel so that's a situation that presents a little different story. i think there's a strong line to support that approach and you know, we've had cases and bill i know has had experience with this to, we on the advice of counsel defense has raised and we delve into a little bit and hold it to a lawyer, and find out what the lawyer was called and the lawyer called all of the facts that were relevant in order to give this advice to the client, what a shockerthat is .

and that happened on a number of occasions. >> this comes up not so much with the corporation relying on what the council or employees relying on the council of defense but counsel told me this was okay. is that ever ethically okay? he told me it was okay. >> it happens all day, every day, you have to be careful about that. >> as rick points out, typically in my experience in those situations was the employee thinking that this is okay is different from this in-house lawyer or the outside lawyer might have said okay, there's the discrepancy that leads to the ability for advice of counsel. >> let's just note parenthetically that rick observed the department of justice division to the point where doj prosecutors are not going to ask for a waiver except in cases of advice for the council but the sec actually reserves the right to ask for a waiver if you are ever involved in pay

which is for the spec, they have to go through their own supervisor review but they make sure they reserve the right to request a referral, a privilege or something on that basis. >> how do we go about disclosing these facts and what are some of the implications? >> there's a fair amount of case law out there and what are the traditional ways, the traditional way number one is to conduct an investigation. i take careful notes, we prepare an interview, a memorandum, i go into talk to the government and say there's a memorandum of all the interviews we conducted and that is clearly a waiver of privilege. if you do that, some lawyers, that's the way they practice what they want to do to lead the client to waive privilege and tell them that's going to happen.

the second way that i've seen people do it quite frequently is with what everybody calls the oral download and i think the oral download is susceptible to waiver but in essence, lawyers come in and they read the memo to the prosecutor without looking it over and recently that too is a waiver. that's effectively the same thing as in the memo but the third possibility is oral download that's not reading each interview memorandum but is really getting a general impression, and overall approach and in most cases, that's not a waiver of privilege with respect to the specificmemos or the specific interviews conducted . but there's another technique that is fast gaining traction and that the hypothetical proper and in the karachi

case in southern district case where the judge approved it, it's turned out, if you were to ask, so-and-so, he might say this. i expect that you might say this if you were to interview someone and at least in the southern district in that particular judge, that was not a waiver and that was actually basically the judge said that was a brilliant strategy by the lawyer to both communicate to the government that the government needed to know and not waive privilege on the connecting point. >> so bill, should the company be concerned about leaving privilege? >> i think that there are concerns about leaving privilege and we are going to get to the way around that in a second but certainly if you waive privilege in a subject matter waiver then you have

everything, a surge of your files and everything going over and this would come up in particular if an employee is charged or if an employee is the subject of an investigation or the employees lawyer is now asking the company to look over all their privileged matters subject matter with them but there's another concern with shareholder litigation. >> we are a nonprofit, we don't have to worry about that. shareholder litigation, there could be other collateral concerns which is if you decide it's going to waive the privilege of thinking about it, you think very carefullyabout all the different potential collateral consequences or use of that information . either in the court of public opinion or in another court. >> and it's important toóis not the form that determines the waiver, whether it's written or oral.

if you disclose factual privilege or factual information, it's a waiver. the issue of oral versus written really is more of a twofold so oral hypothetical sort of standard. if my client told you this, this is what would happen. and there you have an actual disclosing of privilege but it's not a hypothetical. to the extent you are relaying facts, this is what our investigation has found. it is a waiver. but because it's oral, it really makes things harder for a third-party to get that. >>

the problem of reviewing thousands, tens of thousands, thousands, sometimes hundreds of thousands of documents and then you find you missed a privilege want in there and it was completely unmanageable frankly for all parties. i think that was a heart of rule 502. in the context it provides very valuable protections. >> it's important to understand and the advisory committee made clear the exception if the waivers intentional which woulde typically occur in an internal investigation has come here are the memoranda. does the disclosed and undisclosed communication include the same subject matter?

profperhaps discussing the benes of disclosing, those of you on the same subject matter. the first criteria and out to be considered together, the advisory committee notes may clear what's intended is to do away with subject matter waivers. that the important consideration is it unfair if it's misleading. so if i turn over an interview memorandum from them interview with rick that says x did not happen, and that's my proper to the government but i haven't interview with leah which says x sure as hell did happen, that under the rule, that would be misleading misleading attempt and ought to be considered together. but typically an traditional under rule 502 it's intended to be a waiver of only what you actually either orally or in writing produce. there's another component to 502

which really sealed the deal. 502(d) allows the parties to obtain a court order which is binding and definitive and both state and federal litigation that a particular waiver is simply a waiver as the documents provided. >> a couple of quick notes on 502. fiber to provide different kinds of mechanisms for regulating how you handle the disclosure of privileged information, one of the clawbacks you have given to the other side, and you get it back. i think it contemplates more of an inadvertent disclosure. at the alternative is a quick peek or you a lot of the site to look and then if they say we're interested in that that's privileged and then you decide where to go from there. the difference between clawback

and quick peek is burden because who has the responsibility and who bears the cost of identifying and managing the privilege issue? in a clawback, the burden really is on the party producing the information who say we want it back. the quick peek, it goes to the other side, i think. >> so how do you get the rule 502 order speakers 502 says litigation, it's his pending before the court then you can get a court order and you say to yourself how does that apply to me? certainly if you see a grand jury subpoena, a grand jury proceeding as a type of proceeding that is pending before the court and you are, and i successfully obtained with the consent of the government

502 orders, disclosure of certain things are not subject matter waivers. there are other examples. i think rick might be able to fill us in. >> qui tam sometimes understood, sometimes it's developed to know if there's a qui tam if it's understood but maybe there's a suspicion and our circumstances when you get a partial seal left to allow the order to be obtained. >> if i was negotiating with the u.s. attorney's office or the object in a case where wanted a 502(d) order and, of course, they don't tell you that there's a sealed qui tam but you have enough experience to figure out that's probably the case, you would then again the dance, well, if you could get a judge to sign this then we would be happy to provide you with this material, and lo and behold a side order appears and you can move forward with this. >> so let's go to the big

picture, the question of the cooperator or not. to cooperate. rick, from the view of the u.s. attorney now, can't or should a company declined to cooperate with the government? >> this is the $64,000 question. i think the bottom line is it's up to the company to decide just like it's up to any client or any target or defended to decide whether cooperation is in the best interest. typically that decision is made as a result of consultation with a lawyer, communication with our office, and it works out one way or another. so we can't force anybody, compel any person or corporation certainly to cooperate. if someone doesn't cooperate that doesn't necessarily mean we are going to, you know, we're we're going to seek an indictment because they are not

cooperating. we are again going to make an individualized assessment of the facts, way the federal principles of prosecution, take a look at the nature of the conduct, take a look at the background of the defendant and we're going to take a look at the strength of the evidence and we're going to make that decision upon an analysis of all the factors we need to think about when we are making those are decisions. >> also a difference of what you mean by cooperate. we would certainly, we are policies. our policy is to cooperate with an investigation. if someone shows up, we're going to respond to document request, do what we need to do we will certainly if there are individuals who need to be interviewed, and may i may not have canceled, that we may or may not have paid for. i would say cooperate. we met ultimate disagree on what that leads to. we may do the investigation and think hey, this was not reckless, maybe there was a mistake made. you can disagree about the ultimate outcome but cooperate

during the course of the investigation. >> i think the departmen the des made clear, although rick has stated it very benignly, what the consequences are for cooperating or not cooperating. and if you can look at it in the difference, these are actual cases but you can find examples and healthcare cases of petro tiger versus alston or in speeches the department, there is officials have come out and pointed out look what happened to petro tiger. they did not cooperate. they got a find those in the middle of the guideline range whereas, i'm sorry, petro tiger to cooperate. alston did not cooperate. they got assigned in the middle of the guideline range. petro tiger got a 20% discount to really make you think okay, you have to cooperate. but you always have to ask yourself this question, the 20% discount off of what and that's the elephant in the room.

what is the what we are talking about? if we are talking about $5 million or take tenant, $500 million was the elephant in the room. and you can have serious disagreement about whether it should be 500 million or 200 million or 100 million. it's a difficult one. so i would say it's obvious that once you have arrived at a number you are much better off cooperating and getting the discount, but if you arrive at the number two cooperate you have to agree to some inflated or what you believe to be an inflated number, then you're not getting much of a benefit at all. >> it's interesting, i think it's a practical matter. it's hard for a company to just flat out tell the government to go pound sand. particularly for healthcare providers, apart from doj you have permissive exclusion issues if oig decide you're not doing the right thing. it can be different with individuals, however.

he chose these roles are so complex, the regulations are arcing. the e-mails may be unclear. the government needs an individual and it can be that there are cases where you simply say to the government, i'm sorry, unappointed talk unappointed talk to you. good luck to you. if you get something come out and talk to me. maybe i'll cooperate with immunity. we all like immunity. i'll talk your ear off once i get immunity. but i don't know that it makes sense, it does not always make sense for individuals to cooperate, and in the context of these multiple representations of the corporation i would expect to be in close communication and coordination with company counsel saying hey, here's what i am. it might might be built as representing the company. these same i didn't tell you to do that, but good spirit i do think it's clear in the government's view to cooperate includes an admission to

whatever the government says the facts are and whatever the government says the number is. there may be negotiation over the facts in the number, but the end document that you're going to see is going to be an admission. and again going back to the good old days, it used to be you could enter into settlements where it would say, government contends, and the defendant or the company disputes about, but in order to resolve this we agree to this. that is becoming less and less frequent. it's, there are still district where you can get that but there are districts they will not enter into this position that do not contain a definite admission of either guilt or wrongdoing, whether it's criminal or civil. >> we are one such a district. we require clear admissions, a clear statement of conduct. we think it's in the interest of transparency, in the interest of the public understanding the nature of an investigation and

why we arrived at a resolution. there are negotiating points certainly throughout these cases, and we think it's very important that we be clear about why we are doing what we are doing. we want to inspire confidence in the justice system and the work of the prosecutors so that's really the reason behind this requirement. >> it is difficult in a civil investigation where the potential damages under the false claims act are at as many as you want to if it's claimed that goes out a lot. you are trying to make a business decision that i'm not going to risk the future of my company because we get a lot of x-rays or whatever you think, think of some claim tickets submitted a lot of times. it only takes 50 claims to get $1 million under the false claims act. you're making a decision to resolve even if you don't think you acted recklessly and the regulation of the code was vague or whatever and sometimes your force to confront this.

we can disagree about what those facts are. it is difficult when you have a district that might not allow you to do that. i'm certain you are you willing to consider facts and circumstances that every case with an open mind but that great difficulty because it is a business decision on how you settle these things. >> let me also turn to one additional point about the yates memo. what the yates memo requires is when it is a resolution that the ausa resolved in the case have a clear plan for resolving the liability of implicated individuals. so if you charged the company but you are not charging the individuals, now you are going to have to prepare a memorandum explained either thing here's my plan, i'm going to go after them, or here is why i'm not going after them. >> that's right. emphasis on documentation which we do normally. i think this has been a refocus by the deputy attorney general.

requiring there to be supervisory analysis, interaction about these decisions. no sign-up, no passes for culpable individuals without high-level u.s. attorney or aig approval. so these are things that are built into the policy that are going to affect a more rigorous analysis of how we are handling these cases. i actually think it's a good thing. it's something we have required for the most part during my tenure as u.s. attorney, requires our a u.s. ace to really focus on the conduct of the people involved in the case and to be clear as they approach their supervisors about how they're going to reach a disposition and be clear about the reasons for the settlement or disposition. >> that's what i hate when ausa is really focus. with the practical is something to keep in mind is when i find it did with jessica if you have

to get someone to write a memo to get approval for them to get approval to do what your client wants, your in a lot of trouble. so here's a place review, particularly what he represented the company but also the individual you can really help your clients by preparing the memo come by saying here's all the reasons i think you should not prosecute any individuals here. it may be true for the company that you have a basis to prosecute, but my client 45 years old, has always has always obeyed the law, was operating a team, i don't think a jury is going to convict this person beyond a reasonable doubt, particularly after i bring in three experts to say this is routinely done and ambiguous, loblaw so i have now given you something that you can turn around into the memo -- loblaw blob spirit the kind of information you described gets a hard look from us. our ausa distillate or a supervisor look at it. fickle inquired, i just it's a recently in the case,

significant responses to the defense admission beyond the original material that i been given to review it, a challenge in white-collar case. i said go back and answer every one of these arguments and want to see it in writing. and then i'm going to wait it and assess it with my surprise he team. so unless you think these submissions get ignored or given a trip, that's not the case, in my experience. >> bill, since you invited me to join the spam i will let you wrap up with the last word about compliance spirit i say time is run out on the shot clock. just a very quick point about compliance. the question is, does a pre-existing compliance program help you? the answer is sometimes. in the case of olympus corporation, the doj determine that their their compliance program was inadequate and they were then punished really, a higher fine was imposed under

the guidelines that otherwise would have been in place or imposed. because again, doj is judgment, their compliance program was not up to snuff. >> we are looking for effective compliance programs. i think leslie caldwell called it kicking the tires regularly. what is an effective compliance program? the senior leadership provide support for it? does a compliance officer have authority ex does a compliance office have resources? our training programs accessible? are the frequent, comprehensive and are the rewards for compliance and disincentives for noncompliance? so these are some of the things we drill down on to get at, whether compliance is real or not. >> i've heard the phrase paper tiger, which is the prosecutors weigh up sloughing off the compliance program. that the paper tiger. it didn't catch this. how good could it be? which is a challenge because if

it's a good program, why didn't it catch this particular type of misconduct? you have to be prepared to answer that question. skeptical prosecutor will always ask that question. >> thank you all for your attention. i'm sure if you have questions, the panel will be happy to answer them afterwards. thank you, panelists. [applause] [inaudible conversations] >> this weekend c-span cities tour along with our cox communications cable partners will explore the literary life and history of scottsdale, arizona, nicknamed the west most western town. on booktv on c-span c-span2, hee about life on route 66 known as america's mother road, route 66 was 11 of the original u.s. highways between illinois and

southern california. in his book, the 66 kid, the author recalls his life in kingman, arizona, which is located on route 66 66, and youy think the absurd while helping his father run a gas station. >> about 10 years ago i got a call from a writer and he said i read about your article from your fathers gas station in arizona highways. i'd like to interview and i said sure. he goes, his first question, question, the very first thing he asked me is, what was it like growing up in such a historic place? >> visit guidance books which specializes in civil war history spit my father was a great custer electric by mother love the civil war but also was very enamored with the women in the west. so i'm sure they came up with this name. >> on american history tv on c-span three, here about the founding of scottsdale from

arizona state historian marshall trimble. he shares the story of winfield scott, a civil war hero who saw potential in the arizona salt river valley. >> he just graduated from seminary school and been assigned to a church when the civil war broke out, and lincoln called for volunteers. he really wanted to get into it so he went out, he went back to his hometown in new york there, little tiny town committee started recruiting and raising his own company of soldiers. i think he recruited about 33 of his own cousins, and his bible study class. he even recruited the town band. >> and we will visit the winter home of architect frank lloyd wright. >> a clear example of how to live in the desert southwest. it was a building that frank lloyd wright used as a laboratory. he was really working to create a new kind of architecture