Indemnifying white collar defendants

The WSJ reports on efforts by federal prosecutors to brand companies as uncooperative, putting them at risk of ruinous criminal penalties, if they indemnify legal expenses of accused employees.

In a case involving Enterasys Networks, the prosecutors have been accused of misconduct for such activities, resulting in a delay of the trial. The lead prosecutor testified in a deposition that he asked about the company's indemnification of legal fees in order to inform the company that "payment of attorneys' fees for defendants was something that the Department of Justice had instructed its line prosecutors to consider" (obviously referring to the 2003 Thompson memo).

Enterasys' lawyer said that it was ok for the prosecutors to ask the company to contest its obligation to advance fees under state law because it was inappropriate to reimburse defendants who "did something criminal." The Enterasys defendants say that as a result they've had problems defending themselves.

Apparently the presumption of innocence isn't what it used to be. But then, as a law professor was recently was quoted as saying, letting defendants pay lots of money to defend themselves could "undermine the deterrence idea of white-collar crime prosecution."

Come to think of it, wouldn't we get more deterrence if we dispensed with those pesky trials?