KPMG chief called to testify

David Spears, the former KPMG deputy chairman on trial along with 16 former
KPMG partners in the $2.5bn (£1.34m) tax shelter case, has listed Timothy Flynn,
KPMG’s chairman and CEO, and former federal judge Sven Erik Holmes, KPMG’s vice
chairman for legal affairs, as potential witnesses for today’s hearing.

The pair may be called to testify about KPMG’s decision not to pay legal fees
for the former partners facing criminal charges in relation to the alleged
fraudulent tax-shelter scheme.

The former partners have alleged that prosecutors put undue pressure on KPMG
to not advance attorneys’ fees to avoid violating a non-prosecution agreement
with the government.

Other high-ranking KPMG partners have been named as potential witnesses.

Last August, KPMG agreed to pay $456m (£245m) as part of a deferred
prosecution agreement with the government, in which it admitted to committing
fraudulent conduct in the design and marketing of certain tax shelters.

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