A recent New York Times article examines How Accounting Giants Craft Favorable Tax Rules from Inside Government

Here are some extracts:

• The largest U.S. accounting firms have perfected a remarkably effective behind-the-scenes system to promote their interests in Washington. Their tax lawyers take senior jobs at the Treasury Department, where they write policies that are frequently favorable to their former corporate clients, often with the expectation that they will soon return to their old employers. The firms welcome them back with loftier titles and higher pay, according to public records reviewed by The New York Times and interviews with current and former government and industry officials.
• From their government posts, many of the industry veterans approved loopholes long exploited by their former firms, gave tax breaks to former clients and rolled back efforts to rein in tax shelters — with enormous impact.
• After lobbying by PwC, a former PwC partner in the Trump Treasury Department helped write regulations that allowed large multinational companies to avoid tens of billions of dollars in taxes; he then returned to PwC. A senior executive at another major accounting firm, RSM, took a top job at Treasury, where his office expanded a tax break in ways sought by RSM; he then returned to the firm.
• Even some former industry veterans said they viewed the rapid back-and-forth arrangements as a big part of the reason that tax policy had become so skewed in favor of the wealthy, at the expense of just about everyone else. 

No doubt nothing about this is a particular surprise, and the article (perhaps written in sorrow rather than anger) doesn’t suggest it might be illegal. It refers to one isolated incident that “appeared to violate a federal ethics rule that restricts government officials from meeting with their former private sector colleagues,” but that leaves plenty that we can only assume is concluded to fall (maybe not entirely cleanly) within professional standards of ethics.

My own reaction to the article was heavily conditioned by the apparently unashamed way in which the described activity contributes to social inequality, to the creation of an upper-class barely tethered by the same structures and expectations that govern the less powerful. Talking of ethics, we recently looked here at CPA Canada’s Complexity and the professional accountant: Practical guidance for ethical decision-making. As I quoted previously, the publication posits that in our complex environment, acting professionally and in the public interest is no longer a “clear-cut proposition,” – for instance:

• …many of the “big” issues facing society, such as the pursuit of sustainable growth, managing and mitigating climate change, embracing disruptive technologies and striving for social equality, raise questions of values that have broad ethical implications. Furthermore, as sociopolitical viewpoints become more fractured and, more problematically in some regions, divisive, the assumed homogeneity of “acting in the public interest” breaks down. Objectivity, another fundamental ethical principle, is challenged in the face of divergent views on how resources should be managed and distributed, what is fair, how to balance the economy and the environment, and – in the extreme – what is the truth?

Against this appropriately ambitious background, I think it’s reasonable to argue that if the behaviour described in the New York Times article is ethical, then we might as well retire the concept from serious discussion. That is, there is no serious notion of “acting in the public interest” or of carrying out the various balancing acts described there, that can seriously accommodate perpetual scheming to siphon ever more money into the pockets of a tiny segment of the population. You might say, well, the accounting firms are big tents; what goes on over here might not speak at all to what goes on over there. But they’re the ones who would trumpet the power of their brand identities – when I went on the PwC Canada website right now, the first thing to jump out at me was the claim to be “Building trust and delivering sustained outcomes.” All right kids, whatever you say…

This isn’t to say that the accounting firms are particularly worse than any of the other participants in toxic capitalism, only that they’re very certainly no better than them. Writing this a few days after the Canadian election, a Canadian Accountant article again reminds us again of the profession’s political uniformity, with a poll indicating that over 60% of respondents planned to vote for “right-wing” parties of one kind or another, with little recorded support for the Canadian Green or New Democratic Parties. The article notes that “the Environment/Climate Change continues to be an issue of low importance to Conservative-voting CPAs.” Whatever one’s personal views on such matters, can the profession realistically hope to achieve those broad-based notions of “acting in the public interest,” when its core inclination is so often to hold a large chunk of that public interest at a distance?

The opinions expressed are solely those of the author