The fallout from the KPMG tax shelter case continues.
Earlier this week, we saw Judge Lewis Kaplan dismissing criminal charges against 13 former partners of accounting giant KPMG. The judge's decision effectively gutted what had been billed as the largest tax fraud case in U.S. history. The ex-partners and other defendants were accused of helping wealthy KPMG clients, including Global Crossing Ltd. founder Gary Winnick evade billions of dollars in tax by concocting losses through illegal shelters.
There's one critical point: the judge made it clear that there had been a violation of the defendants' due-process rights. To put it bluntly, the government's policy of starving the accused of funds to defend themselves was unconstitutional.
The US government however does not appear to be listening with Attorney General Alberto Gonzales announcing he is "quite sure" there will be an appeal.
As The Wall Street Journal points out, what's at stake here is a fundamental issue of human rights. The argument, it says, is not about whether white collar criminals should be entitled to have millions of dollars spent on lawyers. And it goes beyond questions of how rotten the shelters were.
"Whether the legal costs are small or large, the government has no right to interfere with a citizen's ability to defend himself in court. If it does, there must be some mechanism for holding the state to account for interfering with due process," the WSJ said."For these 13 defendants, this process has already lasted two years. All of them have amassed hundreds of thousands of dollars in legal bills, and in some cases millions' worth. Rather than dragging them through another year or more of appeals, Mr. Gonzales should send a message about due process to other prosecutors by closing down the case."
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