The compliance world is abuzz over the recent events in the Barko v. Kellogg, Brown & Root privilege battle.
This case has already been discussed at length, and more information can be found on the Corruption, Crime & Compliance Blog, Forbes, and Bloomberg BNA. Simply put, the whistleblower plaintiff – Harry Barko – brought a False Claims Act against KBR. A D.C. Circuit decision unanimously found that KBR was not required to disclose internal investigation reports during discovery due to the attorney-client privilege. Boiled down, this holding would allow companies accused of impropriety to hand all of their internal investigation documents to legal in order to shield themselves from any consequences.
This case will have a huge impact on corporate responsibility, and especially on the Compliance 1.0 model that Legal is desperately clinging to. Donna Boehme notes that the “nearly hysterical mischaracterization of Barko as a big threat to legal privilege is a last gasp Hail Mary attempt by those who profited from the failed Compliance 1.0 model to hold onto power. The truth is: Legal privilege before Barko = fact-based. After Barko . . . SAME.”
Late in November, the plaintiff filed a petition for certiorari with the United States Supreme Court. In the brief, petitioners cite to the recent RAND whitepaper Redfining the Relationship of the General Counsel and the Chief Compliance Officer by Michael Volkov to enhance their arguments. Volkov notes several procedural mistakes made during the KBR investigation that were necessary in order to preserve privilege and that all of these basic procedural elements are “known to any first year law student.” Expanding the “privilege” to cover cases like this would “be contrary to the public interest and to the purposes of the attorney-client privilege itself.”