Are Internal Bribery Probes Private? 

To tackle corporate bribery, the U.S. Department of Justice is increasingly relying on companies to turn over their own bad apples. But one former chief executive is trying to turn the tables, arguing that he should be able to use the results of the corporate investigation that uncovered corruption allegations against him.

The request, argued in a motion filed last week in New Jersey federal court by lawyers for former PetroTiger Ltd. CEO Joseph Sigelman, raises key questions about the confidentiality of independent investigations.

Mr. Sigelman claims that the company’s internal investigation, handled by law firm Sidley Austin LLP, served as the impetus for the Justice Department’s charges that the CEO bribed a Colombian official. The investigation documents could therefore “exonerate him” in the bribery case headed to trial in District Court in New Jersey in January, wrote Mr. Sigelman’s counsel, William Burck of Quinn Emanuel Urquhart & Sullivan LLP.

Sidley Austin says that though it shared some of its findings with authorities, its probe was a private matter protected under attorney-client privilege. The firm is asking the court to deny the request.

Attorneys who represent companies in these probes say that allowing subpoenas of an outside law firm would have a chilling effect on companies seeking to discover internal wrongdoing.

“On the other hand, the individual defendant, especially in a criminal case, has the need to know what potential trial witnesses have previously said in the event it’s relevant to their defense,” said Kathleen Hamann, a former prosecutor from the Justice Department’s FCPA unit, now a partner at White & Case LLP.

“Courts don’t want to approve the practice where a party discloses privileged information when it’s in its perceived interest to share with a third party, then close the door and stop further disclosure when it’s not in their interest,” said Mr. McLaughlin. “The question becomes are they trying to use privilege as both a sword and a shield?”

Source: wsj- Are Internal Bribery Probes Private?

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