Sen. Warren Calls on Treasury, Tax Inspectors General to Investigate Unethical Revolving Door Between Treasury and ‘Big Five’ Accounting Firms

Share, email, print, bookmark SOURCE reports.

In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)

***

WASHINGTON DC – U.S. Senator Elizabeth Warren (D-Mass.), member of the Senate Finance Committee, and Representative Pramila Jayapal (D-Wash.), Chair of the Congressional Progressive Caucus, sent a letter to the Acting Inspector General of the Department of Treasury and the Treasury Inspector General for Tax Administration, calling on them to open an investigation into the unethical revolving door between the world’s largest accounting firms and the Treasury Department and Internal Revenue Service (IRS).

In the last four presidential administrations, dozens of lawyers have left top accounting firms for tax-policy positions in the Treasury Department and the IRS. Once in these positions, they have rewritten America’s tax laws for the benefit of their former clients — some of the world’s wealthiest and most profitable corporations — only to swiftly return to their firms and work for those same clients while receiving promotions and massive salary increases in exchange for their government service. Warren and Jayapal are releasing new results from their own investigation into this behavior by the accounting firms, the Treasury Department, and the IRS.

“As Acting Treasury Inspector General and Treasury Inspector General for Tax Administration, you each already have the statutory power and responsibility to investigate allegations of misconduct with respect to the administration of programs at the Treasury Department and the IRS, including through access to any relevant records and subpoena power. The questions raised by giant accounting firms’ use of the revolving door to benefit their clients falls squarely within your missions to ‘promote economy, efficiency and effectiveness’ and ‘prevent and detect fraud and abuse’ in the programs and operations of the Treasury Department and IRS,” wrote Warren and Jayapal.

Last year, the New York Times exposed how the world’s biggest companies avoid paying taxes by exploiting the revolving door between top accounting firms and the government. Senator Warren and Representative Jayapal wrote to the accounting firms – Deloitte, Ernst & Young, KPMG, PricewaterhouseCoopers, and RSM – asking them to explain these unethical practices and demanding information on the safeguards in place to prevent conflicts of interest for employees who formerly worked for the federal government. 

In response to the lawmakers’ inquiry, the accounting firms confirmed that since 2001, at least 24 of their employees left to take senior tax-policy positions in the federal government, including at Treasury and IRS, and returned to their firms after government work, often receiving massive promotions and raises. However, the firms did not provide the lawmakers meaningful information about their employees’ responsibilities or clients, and the Treasury Department cited the difficulty of constructing the relevant records, making it impossible to understand the full extent of the potential conflicts of interest, ethics violations, and corruption as reported by the Times. Further, the firms’ ethics policies failed to provide adequate standards to protect Americans from corrosive revolving-door activity into and out of the federal government by accounting firm employees.

Given the troubling nature of the companies’ responses, their weak policies and lack of transparency, and the ongoing risk to the public interest arising from the revolving door between these firms and the Treasury Department and IRS, Senator Warren and Representative Jayapal called on the Inspectors General to open inquiries into these practices. The lawmakers asked the Inspectors General to investigate the extent to which accounting firms and their clients are taking advantage of this corrupt revolving door scheme and to examine how effective the ethics policies and codes of conduct at Treasury, IRS, and accounting firms are at preventing potential conflicts of interest. 

editor

email: editor@FraminghamSource.com call or text at 508-315-7176


Notice: ob_end_flush(): failed to send buffer of zlib output compression (0) in /home/framin10/public_html/wp-includes/functions.php on line 5275

Notice: ob_end_flush(): failed to send buffer of zlib output compression (0) in /home/framin10/public_html/wp-content/plugins/really-simple-ssl/class-mixed-content-fixer.php on line 110