CORPORATE CRIME REPORTER
Alleges Attorney Took Privileged Documents, Fed Them to Reporter
22 Corporate Crime Reporter 30, July 24, 2008
General Electric has charged a former in-house attorney, Adriana Koeck, with illegally taking privileged and confidential company documents and feeding them to a reporter.
The lawsuit was filed last month in federal court in Alexandria, Virginia.
GE is being represented by Charles Wayne of DLA Piper and Barbara Van Gelder of Morgan Lewis.
GE says that Koeck gave the documents to David Cay Johnston, who until he retired on April 11, was a reporter for the New York Times. He currently is writing for Tax Notes International.
Last month, Johnston wrote an article for Tax Notes International about an alleged tax fraud scheme at General Electric’s Brazilian subsidiary.
The article – Blame It on Rio: GE’s Brazilian Headache – was picked up by news outlets in Brazil – but has been widely ignored by mainstream media outlets in the United States.
Last month, Corporate Crime Reporter ran a story based on Johnston’s reporting.
Johnston won’t identify his source for the article.
But Johnston said this week that he is concerned that GE is seeking to muzzle reporters in the United States from writing about his story.
“No US news organization, except for the Corporate Crime Reporter, has written about my Tax Notes International article, but Brazilian news organizations have,” Johnston said. “GE has repeatedly tried to muscle me with threats of litigation. And other journalists who have read my piece have told me that GE has threatened litigation against anyone who writes about my article.”
In papers filed in conjunction with the lawsuit against Koeck, GE’s lawyers boast about successfully muscling an unidentified web site into taking down Johnston’s article.
“Koeck’s wrongful disclosures to a news reporter led to the publication of a news article containing false, malicious and highly misleading statements about GE,” the lawyers wrote in a motion filed with the court earlier this month.
“Specifically, on Monday, June 30, the same news reporter, now with a separate publication, used information she (Koeck) supplied to publish a news article containing false and malicious statements about GE. The news article appeared on several websites and in a Brazilian newspaper.”
In a footnote, the lawyers wrote:
“After GE notified the website that the article was false, misleading, and based on privileged and confidential documents, the site agreed, as an interim measure, to remove the article pending further discussions between GE and the website.”
In fact, Tax Notes International posted the Johnston article on its web site for just a couple of days in late June 2008, and then took it down.
But Tax Notes editor in chief David Brunori disputed GE’s claim.
“We took it down before GE contacted us,” Brunori said. “Our taking it down didn’t have anything to do with GE. We are 100 subscription funded. We sometimes put teasers up from some of our better known writers on our free web site saying, in effect – look at us. Now, we have somebody famous writing for us. So, we put the article up for just a couple days – just to draw attention. The article remains in our database for subscribers. It is also available through Lexis.”
So, has GE threatened Tax Notes?
“We have been in discussions with GE quite a bit,” Brunori said. “They want us to pull the story. There is no doubt about that. When we think in terms of pulling the story – that means running a retraction. We have pulled stories in the past. But we stand by Johnston’s story. We are not going to pull the story. We are not going to issue a retraction. We think his facts were right. That’s all we care about.”
Johnston is also upset with GE for spreading what he says is a “falsehood” – that the New York Times wouldn’t publish his article.
One of GE’s attorneys, Sarah Bouchard, a partner at Morgan Lewis in Philadelphia, repeated this charge earlier this month in papers filed with the court.
In those papers, Bouchard said that on April 10, 2008, “the New York Times informed GE that they would not publish Johnston’s article.”
Johnston said that this isn’t the first time GE has spread this story. A GE executive in Brazil has been saying the same thing, Johnston said.
“The New York Times never refused to publish this article,” Johnston told Corporate Crime Reporter. “I told GE that in writing. And anyone concerned about the integrity of the courts should be troubled if GE and its lawyers would put forth a false declaration by someone who was not a participant to the internal editorial process of the New York Times.”
“I retired on April 11 as a reporter for the New York Times,” Johnston said. “I hadn’t finished my story. I had made other commitments. And I could have come back to finish the story. Or I could take the story with me. The Times, graciously, let me take the story with me.”
Koeck worked at GE from January 3, 2006 to January 26, 2007 – when her employment was “terminated.”
On November 29, 2006, Koeck filed an internal complaint with GE’s Ombudsman.
On April 23, 2007, Koeck filed a Sarbanes Oxley complaint with the Department of Labor against her employer – GE’s Consumer and Industrial division based in Louisville, Kentucky.
That complaint was dismissed because, the administrative law judge ruled, its wasn’t filed in a timely manner.
Koeck has been represented by the California law firm of Cotchett Pitre & McCarthy and by University of Notre Dame law professor G. Robert Blakey.
Koeck is currently being represented by Lynn Bernabei of Bernabei & Wachtel in Washington, D.C.
In it’s complaint against Koeck, GE alleges that Koeck illegally retained and disclosed privileged and confidential information in violation of a confidentiality agreement she signed when she joined GE.
“Koeck has also voluntarily disclosed privileged and/or confidential information to two agencies of the U.S. government in pursuit of monetary claims against GE,” the complaint alleges. “Koeck did so in circumstances where such disclosure was unnecessary, and she did not engage in any protective measures to protect such information from further disclosure. Koeck also disclosed privileged and/or confidential information and documents to a reporter (or to a third person who provided the information and documents to the reporter) in the hopes of injuring the reputation of, and embarrassing her former client.”
GE says that Koeck was terminated for “performance reasons.”
But according to the GE complaint, Koeck’s SOX complaint “alleged that her job was being threatened because she participated in and reported past alleged illegal activity that she claimed had occurred prior to the start of her employment. Koeck also claimed that she was being discriminated against based on her ethnicity.”
Koeck is a citizen of both Chile and the United States.
According to GE’s complaint, “after spending more than a month diligently investigating Koeck’s allegations, GE found no evidence to substantiate Koeck’s allegations that the termination decision was motivated by retaliation for any alleged protected activity or because of her ethnicity.”
GE says that on December 14, 2007 after Koeck changed attorneys for the second time, her new attorney stated to counsel for GE that she had “marching orders” go to the press and/or report GE’s allegedly fraudulent activities if GE would not mediate the two complaints, within the following week, that Koeck had filed with the governmental agencies.
GE says it declined to cede to the demands of Koeck’s attorney.
“Not long after, a news reporter in fact contacted GE inquiring into the very activities that were the subject of Koeck’s allegations. The reporter advised GE that a ‘source’ had given him hundreds of pages of confidential company documents, including documents that he identified as being attorney-client privileged. The reporter stated that he was writing an article on these issues and wanted GE to respond. Shortly after this conversation, the reporter sent a follow-up e-mail specifically identifying certain GE documents that he received from his ‘source.’”
“Significantly, almost all of the documents that the reporter identified as having received from his source are documents that Koeck is known to have authored, received, or had access to during her employment with GE,” the complaint alleges.
GE says that Koeck has refused to return the documents to the company.
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