Judge blasts pressure put on KPMG over legal fees

0 Comments | USA TODAY, June, 2006 | by Greg Farrell

NEW YORK -- A federal judge ruled Tuesday that the U.S. Attorney's office unfairly pressured the KPMG accounting firm not to pay the legal expenses of former partners who have been charged with selling abusive tax shelters. It marked a stinging rebuke to federal prosecutors here and the Justice Department's approach to corporate prosecutions as a whole.

In a narrow sense, the ruling means that more than a dozen former KPMG partners and employees under indictment can now have their legal costs paid upfront by the accounting firm.

But more broadly, the ruling strikes at the Justice Department's policy for determining whether to bring charges against corporations. That policy, known as the Thompson Memorandum, was written after the indictment and collapse of the Arthur...