Judge: Evidence Shows Government Influenced KPMG's Defense Fees Policy

When the Department of Justice prosecuted accounting firm KPMG for allegedly illegal tax shelters, KPMG cut off legal fees for the partners and employees who did not cooperate with the government. Defense attorneys said that KPMG did so because of pressure from DOJ and that it interfered with their representation of their clients. Their motion that the government be ordered to pay their fees out of KPMG's $456 million in fines. The prosecutor, of course, takes the contrary position. The motion is still pending, but at a hearing last week the judge was skeptical. Law.com - Judge: Evidence Shows Government Influenced KPMG's Defense Fees Policy, N.Y.L.J., May 12, 2006.

Carolyn Elefant wonders whether we consumers should reward with our business the companies that stand up to the government -- whether its resisting pressure from prosecutors or declining to turn over telephone records. Should You Choose a Company Based on How It Protects Its Employees and Customers?, Legal Blog Watch, May 12, 2006.

Filed in: attorney's-fees, practice-of-law, KPMG, tax, white-collar, Justice-Department, criminal-law