A couple of years ago, I took a wistful, backward glance at the hapless schmo I once was back in the day, while working (briefly) as a file clerk for the Washington, DC law firm of Arnold & Porter circa 1976, a retrospective that tangentially included information on the “White & Case case”, which I summed up in the following manner:
The White & Case Case involved another law firm, in New York. One of its senior partners, a Mr. Eply, was facing criminal charges brought by the Securities and Exchange Commission, accusing him of criminal behavior based on the advice he gave to a White & Case client, Cortez Randell, a sixties wheeler and dealer who ended up doing time, though, I’m pretty sure, Eply did not. The SEC’s case against Eply was one of first impression, and naturally White & Case was willing to move heaven and earth to protect both Eply and other attorneys who might find themselves in legal peril merely for trying to turn an honest buck or two.
Well, if I hadn’t been so lazy, I could have found the actual disposition of the case online and would have learned that Marion Epley did indeed walk, and that White & Case also received a mere slap on the wrist, getting off the hook for any legal liability merely by “promising” to obey the law in the future, as if they had any choice in the matter.
Well, that controversy arose in the mid-1960s. And now it’s 2021! And guess what? It’s the IRS this time that’s on the case of White & Case, “suggesting” that W&C might have been a little too helpful in helping the major drug firm of Bristol Myers to avoid a cool billion in taxes. The New York Times Jesse Drucker has the story:
In 2012, it [Bristol Myers] turned to PwC, the accounting, consulting and advisory firm, and a major law firm, White & Case, for help getting an elaborate tax-avoidance strategy off the ground. PwC had previously been Bristol Myers’s auditor, but it was dismissed in 2006 after an accounting scandal forced Bristol Myers to pay $150 million to the U.S. government. Now PwC, with a long history of setting up Irish tax shelters for multinational companies, returned to Bristol Myers’s good graces.
PwC, whatever the fuck that stands for, and White & Case each produced a lengthy review of BM’s proposed hustle, pronouncing its each and every aspect to be kosher, from both a legal and accounting point of view. But it appears that, from the point of view of the IRS, the two reviews, while containing nothing but the truth (probably) didn’t contain the whole truth:
[T]he I.R.S. report revealed the role of PwC and White & Case in reviewing the deal. While both firms assessed the arrangement’s compliance with various provisions of the tax law, neither firm offered an opinion on whether the deal violated the one portion of the tax law — an anti-abuse provision — that the I.R.S. later argued made the transaction invalid.
Drucker quotes Karen Burke, whom he identifies as a “tax law professor at the University of Florida”, as saying that both firms “appear to have carefully framed the issues so that they could write a clean opinion that potentially provided a penalty shield.” So it’s good to know that “tradition” is still alive—alive and kicking—alive and kicking ass—at White & Case!
Afterwords
There’s quite a bit more to Drucker’s story than the White & Case angle, so if you’re into corporate skullduggery (and online bureaucratic incompetence), check it out. And if you think he was “reaching” when he went to the University of Florida for a quote, you can check out Karen’s rap sheet here, ’cause it’s not too shabby. Where’s your Harvard Ph.D?
