Keneally Confirmed to Lead Justice Department Tax Division

The U.S. Senate confirmed New York attorney Kathryn Keneally as assistant attorney general of the Justice Department’s tax division, where she will help run the crackdowns on identity theft and offshore tax evasion.

Keneally, a partner at Fulbright & Jaworski LLP, was President Barack Obama’s second choice after an earlier nominee, Mary L. Smith, was blocked by lawmakers. Keneally was among scores of nominees confirmed yesterday by the Senate for top government jobs. The Senate also confirmed Michael Horowitz, a Washington-based lawyer, as inspector general.

“Kathryn will be integral to our efforts to enforce our nation’s tax laws fully and fairly, and Michael will promote integrity, financial austerity and effectiveness in Department of Justice operations,” Attorney General Eric Holder said in a statement.

Keneally will lead more than 300 civil and criminal lawyers who handle a wide range of investigations and litigation. Bloomberg News reported March 27 that the division lost almost 30 percent of its 95 prosecutors in the past month, slowing a U.S. crackdown on offshore banks that enabled tax evasion, according to four people familiar with the matter.

Foreign Banks

Many of the lawyers handled cases involving foreign banks or financial advisers suspected of helping U.S. clients cheat on taxes, the people said. The transfers came amid criminal probes of at least 11 Swiss financial institutions, including Credit Suisse Group AG, with the tax division leading or assisting each prosecution.

The division investigates identity theft, illegal tax shelters and other crimes, while approving every tax case filed by the 94 presidentially appointed U.S. attorneys serving the Justice Department around the country.

The prosecutors left under a program offered on Jan. 13 by the Justice Department, which said it would “detail” as many as 100 attorneys and support staff to the U.S. attorney’s offices through Sept. 30, or the end of the fiscal year.

Keneally didn’t immediately return a call or e-mail seeking comment on the confirmation.

Horowitz is a partner at Cadwalader, Wickersham & Taft LLP. He had served in the Justice Department’s criminal division, first as deputy assistant attorney general and then as chief of staff to the head of the division. He also had been chief of the public corruption unit in the Southern District of New York.

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