A New York Times investigation into Big 4 professionals playing a role in altering federal tax regulations while working within the Treasury Department has sparked two Democratic lawmakers to seek more information.
U.S. Sen. Elizabeth Warren of Massachusetts and Rep. Pramila Jayapal of Washington want the Big 4 plus RSM to explain the 35 reported incidents of professionals leaving their firms for short stints at Treasury, where they helped draft tax rules that aided their clients. The professionals then returned to their firms, and in nearly half the cases were admitted as partners and received big boosts in pay.
In letters to Deloitte, KPMG, EY, PwC and RSM, the lawmakers called the “revolving door between public service and private profit” an abuse of public trust. They are seeking the following information: how many lawyers from the firms have taken jobs in the government and then returned; names of clients before and after their time in government; details of compensation at the firms both before and after their government service; and whether firm employees are permitted to retain clients if they worked on matters affecting them while in the government, the Times reported.
Warren and Jayapal cited one example of a Deloitte tax lawyer who worked to persuade Treasury to temper a rule to end a tax shelter that benefited client Bristol Meyers Squibb. He joined Treasury a few weeks later and his office issued new regulations favorable to the client. Then he returned to Deloitte and was admitted as a partner soon afterward.
They also cited a bill they introduced that would tighten ethics provisions, require more openness about lobbying and limit post-government employment.
“Our legislation would close the revolving door between massive accounting firms like yours and the federal government, ensuring that our government officials work for the people and not the wealthiest corporations and their clients,” they wrote.