On July 20, after his latest round of hearings in the KPMG LLP tax shelter case, flame-throwing federal district court Judge Lewis Kaplan had a new demand: He ordered lawyers for the 16 former KPMG partners or employees who are defendants to submit affidavits disclosing who had referred their clients to them. The reason, as Kaplan explained at the hearing, was his concern that KPMG and its lawyers at Skadden, Arps, Slate, Meagher & Flom had directed the individual defendants to lawyers “who would understand that the best thing to do here for these individuals would be what was in KPMG’s best interest.”
Kaplan isn’t likely to find any damning evidence in the affidavits; only two of the KPMG defendants, according to the affidavits, are still using lawyers referred by Skadden. But the judge’s extended investigation of the KPMG prosecution has thrown a spotlight on KPMG’s lead outside counsel, Skadden partner Robert Bennett — exposing defense tactics usually confined to the shadows of white-collar dealmaking. According to Stephanie Martz of the National Association of Criminal Defense Lawyers, Kaplan’s call for affidavits sent “a message that he perceives that what happened [in Skadden's representation of KPMG] was, if not over the line, then awfully close to it.”
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