Volume 82, Number 5

November 2007

Imposing Limits on Prosecutorial Discretion in Corporate Prosecution Agreements

Erik Paulsen

In late 2006, the Department of Justice (DOJ) overhauled its internal policy regarding the prosecution of corporate entities. The new policy—expressed in the “McNulty Memo”—was issued as a direct response to charges that the DOJ had abused its leverage over the companies it targeted for criminal prosecution, specifically with regard to compelled cooperation. The McNulty Memo addressed these charges, in part, by restricting the discretion of individual prosecutors and requiring approval by the Deputy Attorney General on significant prosecutorial decisions.

While the changes ushered in by the McNulty Memo are a promising first step, they will not remedy all of the potentially abusive practices that mar the prosecution of corporate entities—particularly in regard to the use of deferred and non-prosecution agreements. At first blush, deferred and non-prosecution agreements appear to present a win-win situation: They offer the benefits of criminal punishment without the negative collateral consequences that flow from criminal charges. Their increased use, however, has revealed a different picture. By removing the threat of collateral consequences, deferred and non-prosecution agreements allow individual prosecutors to take full advantage of the unique weaknesses of corporations in the criminal justice system. These weaknesses provide prosecutors with a dangerous amount of leverage over the corporations they target, creating a bargaining imbalance and a new threat of abuse.

The potential for abuse that flows from the use of deferred and non-prosecution agreements should be addressed by restricting the discretion of individual prosecutors. This Note argues that the DOJ should look to the solution offered in the McNulty Memo and require that individual prosecutors receive permission from the Deputy Attorney General before entering into any deferred or non-prosecution agreement.