Infiltration of KPMG Draws Waxman Probe

Infiltration of KPMG Draws Waxman Probe
Congressman Henry Waxman wants details on an operation conducted by corporate-intel firm Diligence to get info from the accounting giant
by Eamon Javers

In the wake of a BusinessWeek article on corporate espionage, Rep. Henry Waxman (D-Calif.), who chairs the chief investigative committee of the House of Representatives, is asking for more information. On Mar. 12 Waxman sent a letter to Gordon Dobie, an attorney at the law firm Winston & Strawn, asking for documents related to Diligence, a Washington corporate-intelligence firm. On Feb. 26, BusinessWeek revealed the details of an espionage operation—code-named Project Yucca—run by Diligence in 2005 (see BusinessWeek.com, 2/26/07, "Spies, Lies and KPMG").

In that case, Diligence's CEO, Nick Day, impersonated an MI5 intelligence agent in order to convince an accountant at KPMG Financial Advisory Services in Bermuda to leak internal KPMG information. Diligence was trying to get the inside track on KPMG's Bermuda government-prompted investigation of IPOC International Growth Fund Ltd. Diligence was working for the Washington lobbying firm Barbour Griffith && Rogers, which in turn was working for a subsidiary of IPOC's business rival, the Russian Alfa Group Consortium.

Diligence Defends Actions
In the spring of 2005, Day approached KPMG accountant Guy Enright in Hamilton, Bermuda, and led Enright to believe that he was an intelligence agent for the British government. Soon, Enright was leaking internal KPMG documents to Diligence—going so far as to hide documents under a rock at a predetermined "dead drop" site in Bermuda. For its part, Diligence ran the operation like a full-blown government intelligence mission, complete with psychological profiles, covert surveillance, and fake identities. In order to be sure that Diligence itself was not compromised, the firm used sophisticated counterintelligence techniques, including following a process known as "dry cleaning" designed to make sure Diligence employees themselves weren't being followed by walking through preset "choke points" to check for tails.

Now Waxman, whose committee has broad oversight jurisdiction, is demanding "any information and documents" relating to this situation that IPOC's law firm Winston & Strawn has in its possession. Waxman did not set a deadline for the information or say whether he'll hold hearings on the matter. Committee spokeswoman Karen Lightfoot described the Waxman missive as "a preliminary letter designed to gather information."

more:http://www.businessweek.com/bwdaily/dnflash/content/mar2007/db20070314_183622.htm?campaign_id=rss_daily

http://www.bgrdc.com/bios.asp

History
The company was founded in 1991. On its website it states "our firm is actively involved in the shaping of public policy issues that dominate the American political and corporate agenda. We serve as advocates in federal government relations, a vital link to state governments, and an ally in business development anywhere in the U.S. and in markets around the world." <2>.

In a profile on the company and its strong connections with the Republican Party, Thomas B. Edsall wrote in the Washington Post that "in less than a decade, the Barbour Griffith & Rogers lobbying shop has become one of the most profitable operations in Washington". <3>

According to Haley Barbour, who was sworn in as the Governor of Mississipi in January 2004, the firm was sold to the Interpublic Group of Companies in 1999. Part of the sale deal was that the name remain the same even though Barbour no longer had a financial stake in the company. <4>

However in June 2004 O'Dwyers PR Daily reported that BG&R was discussing buying a controlling interest in itself back from Interpublic. It reported that "the former Republican National Committee chairman has put his stake in BG&R into a blind trust. He has said that he isn't sure whether he will return to BG&R after he leaves office." <5>

In a September 2003 article on his blogsite, Josh Marshall wrote that New Bridge Strategies - a company established to help clients win Iraq reconstruction contracts - "looks an awful lot like an outgrowth of Barbour Griffith and Rogers". <6>

In June 2004, O'Dwyers PR Daily reported BG&R recorded $1.6M in fees in 2003, according to Roll Call. <7>

http://www.sourcewatch.org/index.php?title=Barbour_Griffith_%26_Rogers

Did Lobbyists Break the Law?

By: Jeff Patch
March 14, 2007 05:52 PM EST


url:
COMMENT PRINT EMAIL RECOMMEND

Digg del.icio.us Technorati reddit


The city's biggest Republican lobbying firm, Barbour Griffith & Rogers, is coming under the scrutiny of one of Capitol Hill's most tenacious Democratic chairmen, California Rep. Henry A. Waxman, head of the House Committee on Oversight and Government Reform.

At issue is whether the lobbying firm broke U.S. laws when two of its representatives allegedly impersonated British and U.S. intelligence operatives to obtain information helpful to a client. The dispute stems from a complicated corporate fight between a firm based in Moscow and a Bermuda hedge fund named IPOC over control of a Russian cell phone company. Barbour Griffith & Rogers was hired to assist the Moscow entity, Alfa Group Consortium.

Lawyers for IPOC argue that BGR colluded with Diligence, a Washington-based private investigation firm, in a plan to get confidential documents and information unearthed during a separate audit of IPOC. BGR's client used the improperly collected audit data against IPOC in the battle for control of the Moscow phone company, the lawyers say.

W. Gordon Dobie, a Winston & Strawn partner representing IPOC, received a letter from Waxman that seeks all the documents the law firm has related to the dispute and a lawsuit filed in U.S. District Court by IPOC against BGR and Diligence. BGR once held stock in Diligence. It sold its shares, held in a trust, in March 2005, and Ed Rogers, BGR's chairman, and Robert Blackwill, the president of BGR International, stepped down from Diligence's advisory board, a company official said. As of Wednesday, though, the two were still listed on Diligence's Web site as board members.


more:http://www.politico.com/news/stories/0307/3137.html