Defenders Alarmed Over Corporate Lying Case

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Lying to your own company’s lawyers now is a time, says the New York Times. The paper reports that defense lawyers and civil libertarians are alarmed at the federal government’s aggressive use of obstruction of justice laws in its investigation of accounting improprieties at the softward company Computer Associates. Some lawyers criticize the handling of the case by Wachtell, Lipton, Rosen & Katz, a prominent law firm that the company hired to investigate the charges on its behalf.

Last month, three former executives at the company pleaded guilty to obstruction charges tied to lies they told to Wachtell, whose investigation was led by John F. Savarese, a former federal prosecutor. The Computer Associates executives were never accused of lying directly to federal investigators or a grand jury. Their pleas were based on the theory that in lying to Wachtell they had misled federal officials, because Wachtell passed their lies to the government. The company had promised to cooperate fully with the prosecutors.

Tim Lynch of the Cato Institute’s Project on Criminal Justice was surprised that Judge I. Leo Glasser had accepted the guilty pleas. An executive who lies to his company’s lawyers should be fired, not prosecuted, said Lynch, who believes that prosecutors are stretching the law in a way Congress did not intend.

Prosecutors disagree, saying that the executives knew that their testimony would be turned over to the government and that they needed to tell the truth. Defense lawyers say the case shows the potential traps that executives face during internal corporate investigations, which have become increasingly common.

Link: http://www.nytimes.com/2004/05/17/business/17compute.html?adxnnl=1&adxnnlx=1084791678-kinv6nzAh

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