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General Electric Co. has now seen two in-house lawyers end up in court -- as its opponents. In June, GE sued a one-time staff attorney, claiming that she took privileged company tax documents and gave them to two government agencies and a reporter. The materials apparently described an alleged tax fraud scheme by a GE division in Brazil. In a separate case last year, the general counsel of one of the company's U.S. subsidiaries brought a gender discrimination class action against GE.

In the most recent action, Fairfield, Conn.-based GE filed suit June 6 against Adriana Koeck. The company brought its action in federal district court in Alexandria, Va.; Koeck now works in private practice in Washington, D.C. She was a commercial counsel for the company from January 2006 until she was fired in January 2007 "for performance reasons," GE's suit states. Koeck was based in Kentucky, and "had primary responsibility for regions outside of the United States," including Brazil.

GE alleges that while Koeck was at the company, she misappropriated confidential e-mails, memos and legal opinions and gave them to a reporter, as well as to two unidentified government agencies. According to Corporate Crime Reporter, a weekly newsletter on white-collar crime, Koeck filed a whistleblower complaint with the U.S. Department of Labor, and also sent information to the fraud section at the U.S. Department of Justice. (Officials at both agencies declined to confirm or deny whether they have received any documents from her.)

In its suit, GE seeks an injunction restraining Koeck from disclosing privileged information and compelling her to return the materials that she allegedly took from the company, plus compensatory damages in excess of $100,000. GE general counsel Brackett Denniston III says only, "We have requested the court's assistance in obtaining the return of our property, which was illegally taken from us."

Koeck, who has changed lawyers several times since late 2006, referred questions to her latest attorney, David Sanford. A partner at Sanford Wittels & Heisler in Washington, D.C., he declined to comment on the case.

GE's suit does not identify the reporter who allegedly received the confidential material from Koeck, but it appears to have been David Cay Johnston, who wrote a story raising questions about the company's tax strategy in Brazil. The story, "Blame It on Rio: GE's Brazilian Headache," ran this summer in the June 30 issue of Tax Notes International, a weekly journal of tax news. Johnston wrote in his article that "a lawyer for a participant in some of the events" provided him with internal GE documents, on condition that the lawyer not be named.

According to the Tax Notes story, in 2005 the new manager of a GE subsidiary in Brazil grew suspicious after he reviewed the division's sales invoices. The manager found that 64 percent of the subsidiary's sales were in lightly populated areas with significantly lower tax rates. Urban jurisdictions in Brazil charge 12 to 19 percent more in value-added tax on a company's products than do rural jurisdictions. The Brazilian manager told his superiors at GE that the fact that such a high percentage of the subsidiary's sales occurred in low-tax jurisdictions raised a question "of possible tax evasion," Tax Notes wrote.

The story included a comment from GE spokesman Gary Sheffer, who said that the company paid Brazil $10.6 million in back taxes and interest after the manager's report. Sheffer confirmed that amount with Corporate Counsel, but says that he "wouldn't describe them as back taxes. We paid them and are seeking to recover fully from customers." Sheffer adds that the Tax Notes story is "significantly flawed and misleading."

Christopher Bergin, publisher of Tax Notes and its parent company, Tax Analysts, says he met with GE representatives and considered their concerns after running the article. Bergin, a lawyer, says that his company stands by the story.

GE said in a court motion that it hired an expert to "conduct a forensics analysis" of the computer that Koeck worked on while at the company "to determine what information she improperly retained and disclosed." GE is represented by two Washington, D.C.-based attorneys, Charles Wayne of DLA Piper and Barbara Van Gelder of Morgan, Lewis & Bockius.

Before her firing, Koeck filed what GE calls unsubstantiated complaints alleging "that her job was being threatened because she participated in and reported past alleged illegal activity," and "that she was being discriminated against based on her ethnicity."

Koeck, whose full name is Adriana Koeck-Fuenzalida, is part Hispanic. She now practices at Koeck & Associates in Washington, D.C. Her Web site describes her as "a multilingual, multicultural attorney with more than 15 years of transactional legal experience ... [and] a dual citizen of Chile and the United States."

Koeck's defense attorney, Sanford, is also representing Lorene Schaefer, the other in-house lawyer who's currently taking on GE in litigation. Schaefer was general counsel of the company's transportation division based in Erie, Pa., when she filed her class action last year. She is on paid administrative leave pending its outcome.

Schaefer's complaint, filed in May 2007 in federal district court in New Haven, accuses GE of "systemic, companywide discriminatory treatment" of more than 1,000 female attorneys and female executives. GE has argued that Schaefer would have to violate privilege and disclose confidential company data if her case came to trial, but she denies that. A judge allowed the action to go forward earlier this year. The parties have entered into settlement talks, which were ongoing at press time.

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