Imagine you're a company's lawyer. Federal prosecutors tell you that your company is under investigation, and that if the company does not cooperate, they'll Arthur Anderson you. Guilt or innocence doesn't matter, as we saw in the Arthur Anderson case: AA was innocent, and ultimately vindicated in the United States Supreme Court. Vindication does not revive a company, however, so you know an indictment might be enough to kill your client.
You agree to cooperate with the government. You soon learn that "cooperating" means:
- waiving the attorney-client privilege;
- spending the company's own money to hire private investigators;
- refusing to comply with contractual obligations you have with your employees;
- betraying loyal employees who acted according to company policy.
Sounds like quite the deal? Should companies really be required to make such a deal with the devil?
In this Cato Institute white paper, N. Richard Janis argues, No.
The paper raises lots of interesting issues. I'll have more to say about this topic later this week.