So is the US Government guilty of "prosecutorial misconduct" in the KPMG tax shelter case? Certainly that's the line in this report quoting Stanley Arkin, an attorney representing one of the defendants.

"How far can the government go in exacting cooperation before the pressures or the weight you put on the cooperator becomes something that corrupts the truth? I'm speaking of prosecutorial misconduct."

One of the issues raised focused around aspects of the Justice Department memorandum setting out guidelines for prosecuting corporations, the so-called Thompson Memorandum where firms can get out of jail if they don't pay the legal fees of potentially culpable employees. Throw them out to the wolves, as it were.

The New York Times reports that Judge Lewis A. Kaplan of the Federal District Court in Manhattan slammed this sort of ethos.

"I find it shameful that the fees haven't been advanced. The reality is that you are depriving people of counsel, or at least interfering or impairing."

Shameful as that may be, it's hard to let KPMG off the hook. The firm had been peddling illegal shelters, allegedly designed to create phony losses that wealthy individuals could use to reduce their taxes, and these sham schemes cost the US public billions of dollars. Furthermore, the firm had arrogantly resisted attempts to bring it to book. Suddenly, when it realised it faced possible criminal charges and an Andersen-like fate, it was overcome with contrition, as this report explains.

How real is the remorse? Just go back to the story of Arkin telling the court that KPMG employees have been scared to testify about how the firm had insisted the shelters were legal. If that's right, you wouldn't imagine there would be much genuine contrition. No soul-searching there.

KPMG has not exactly covered itself in glory. But the question is whether the case is jeopardized by the prosecution over-reaching.