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The prosecution deal the Government struck with KPMG for it to avoid prosecution over dodgy tax shelters is coming under scrutiny.

Yes, these things are inevitable when the lawyers move in. Still, the claim that terms in the deal prevent them from doing their job is an argument worth looking at.

The Justice Department requires KPMG employees' statements to be in line with the statement of facts that the company agreed to when it did the deal. But here's the rub: an employee who contradicts the statement of facts (and it's the prosecutors who determine what's contradictory) actually puts the company in breach of the agreement and at risk of being prosecuted. So how does the company avoid prosecution? Under the agreement, it's required to repudiate the employee's contradictory statement and take additional "personnel action for wrongdoing."

Let's translate that into English: if you are at KPMG and you are deemed to make a contradictory statement, you had better start looking for another job. Sounds like the kind of deal you cut when the other party has put you over a barrel.

And with the inquiry into tax shelters now moving beyond KPMG to include law firms, banks and investment firms, that's worrying news for employees at other organisations.


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only 1 comment untill now

  1. I have no sympathy I’m afraid. We’re talking about a very large, powerful firm that sold illegal schemes and got caught. The Dept of Justice has given them time to pay and let them off the prsecutorial hook – what more do they want? Forgiveness?

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