In a desperate effort to rehabilitate itself after the tax leak scandal, PwC has resorted to a shocking tactic — telling the truth.
Not about who within the firm was also involved in sharing confidential information about multinational taxation, or the rotten culture that enabled it and the ensuing cover-up, but about political donations, which PwC has now abandoned.
“Although we have always taken the utmost care to ensure our political donations do not create any real or perceived conflicts of interest,” acting CEO Kristin Stubbins is reported to have told PwC partners yesterday, “we recognise that doing away with political donations is the best way of ensuring the highest standards of governance.”
As we reported a month ago, PwC is the biggest political donor of the big four audit/consulting firms, having given more than $2 million to both sides of politics, though mainly the Coalition, in the past decade.
PwC’s donations ban includes de facto donations such as payments to attend, or sponsor or host, political fundraising events — which are even more iniquitous than straight donations, as they are primarily aimed at securing access to policymakers.
As Crikey (alone) has argued, in obtaining access to policymakers, the goal of a firm such as PwC, which has myriad corporate clients, isn’t merely to obtain information from and wield influence over policymakers in its own interests, but in those of its other clients.
The multi-client nature of a firm such as PwC makes it inherently conflicted in any dealings it has with government. This conflict of interest can’t simply be managed away — it’s an integral part of the business model of a firm of that nature. So, as Stubbins said, “doing away with political donations is the best way of ensuring the highest standards of governance”.
It also just so happens to suit PwC financially, given the firm will no longer be bidding for government consulting work, with the hiving off of public sector consulting to “I’d buy that for a dollar” Scyne Advisory. But it will continue to do government auditing work.
PwC’s unexpected truth-telling about the essentially conflicted nature of big four political contributions leaves the remaining three in an uncomfortable position. KPMG, Deloitte and Ernst & Young (EY) may be smaller donors than PwC was, but the same problem of integrated conflict of interest applies to any access they have to policymakers, especially behind closed doors, as political fundraisers always are. Clearly they’re not as committed to “the highest standards of governance” as PwC, following its Damascene conversion, seems to be.
The missing parties in this picture, literally, are Labor and the Coalition. If they too were committed to the highest standards of governance, they would refuse to accept contributions from the big four and any other firms that operate on a similar model of having multiple corporate clients while engaging in policy work for governments.
Better yet, they would remove the whole problem of access to policymakers by ending the practice of selling it to donors, a process by which they give us a two-speed democracy.
