It’s time to rein in the Big Four – Matt Carthy MEP
Sinn Féin MEP Matt Carthy has commented on a new report published by the Corporate Europe Observatory today, Tuesday. Carthy is a member of the European Parliament’s special committee on financial crimes, tax evasion and tax avoidance (TAX3).
Writing in an op-ed in the EU Observer today, Carthy said:
“The unchecked power of the Big Four accountancy firms is causing increasing unease among policymakers worldwide. The focus of much of this concern has been the role played by Deloitte, PwC, EY and KPMG in the global tax avoidance industry.
"But at the same time as they advise their corporate clients on how to shift profits offshore, the Big Four are involved in auditing the books of these same corporations – and all the while they are consulting for governments and public institutions on important policy issues.
“These four firms are crucial regulators of the global economic system – with the unique role of both regulating multinationals through their auditing role and simultaneously advising these same companies on how to abuse the legal system in order to avoid paying taxes – yet they are subject to minimal public scrutiny and regulation.
“A new report released today by the Corporate Europe Observatory (CEO) examines the Big Four’s channels of influence exerted through public procurement contracts, lobby vehicles, advisory groups, and their shared culture and personnel. This new research goes beyond examining the services these four firms provide to their corporate clients to looking at their role in influencing public policy in the European Union – and the findings are alarming. The report reveals layers upon layers of conflicts of interest inherent in the Big Four’s activities.
“Most alarming from my perspective is the massive amount of public money provided to the Big Four through public procurement contracts awarded by the European Commission, not to mention national governments. In 2016 alone, these firms received €105 million in Commission contracts to carry out evaluations, impact assessments and consultancy services on EU legislation.
“Why do we allow these firms to dictate public policy when they clearly have a commercial interest in ensuring tax legislation lets multinational corporations off the hook, and ensuring governments privatise state-owned enterprises to the benefit of their clients? Why do we give them public money when we know they are facilitating tax avoidance by their corporate clients, which reduces the amount of funds made available to governments?
“It’s time to rein in the unchecked power of the Big Four and ensure they are regulated and scrutinised. This means, at the very least, splitting up their auditing and advisory services, and reviewing the public procurement practices of the Commission and national governments as well as the lobbying activities of these firms. I fully agree with CEO’s recommendation that we must ensure there is a firewall in place between the tax avoidance industry and EU policymakers on tax issues, following the example of the steps taken to rid public policy of the influence of the tobacco lobby.”
Note to editors:Matt Carthy’s op-ed for the EU Observer is available here: https://euobserver.com/opinion/142319The Corporate Europe Observatory report is available here: https://corporateeurope.org/power-lobbies/2018/07/accounting-influence