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May 7, 2015

Editor’s letter: Quid pro quo

What prompts companies and individuals to make political donations? Some would argue it’s a political right or even a matter of social responsibility.

Others would regard it as an attempt to gain undue access to politicians or a way to gain the inside track with those who can influence government -if not the government itself.

One thing’s for sure, whatever the motives, the donor needs to have money or resources aplenty to spare.

In light of the UK General Election, those who could afford to be big donors within the accountancy profession were the Big Four.

During the past five years of the UK Coalition government, PwC, KMPG and Deloitte have contributed almost £2.5m ($3.8m) to Britain’s three main political parties, according to the Electoral Commission.

Those donations are in kind and reflect the value of services rendered by their staff in secondment to assist political parties.

Another £614,099 worth of professional services to Labour shadow ministers was given gratis during 2014 and 2015, the vast majority courtesy of PwC, according to the House of Commons Register of Members’ Financial Interests.

Contacted for an interview on this subject, the Big Four did not extend this magazine the same generosity as that shown towards political parties.

EY didn’t reply. Top donors PwC and KPMG issued a brief statement essentially copy-pasted from their transparency reports. The only firm that responded to specific questions was Deloitte.

PwC’s spontaneous statement, issued before I could ask any questions, anticipated: "We do not develop policy on behalf of parties".Ancient Romans used to say that he who excuses himself, accuses himself. I’m sure that’s certainly not what PwC wanted to express in its statement.

And talking of the Romans, being accountants and therefore knowledgeable people, I’m also sure they know the story of the richest man in ancient Rome: Marcus Licinius Crassus.

Crassus was the major donor of Julius Caesar’s campaign to become consul in 59 BC. Once elected that very same year Caesar passed a law called Lex Iulia de publicanis.

That law allowed private tax collectors to keep one third of the tax revenues they collected. By coincidence Crassus was a shareholder in many of those companies, called societates, which collected taxes on behalf of the state.

If asked, Crassus would possibly have said he didn’t develop any tax policy on behalf of Julius Caesar.

One who would disagree with both Crassus and PwC is Austin Mitchell, the retiring Labour MP for Great Grimsby. Mitchell was a member of the House of Commons’ Public Accounts Committee, which extensively investigated the role of accountancy firms in facilitating tax avoidance schemes.

One of the aspects the committee looked at was the secondments of the Big Four, which Mitchell described as a way of influencing policy.

"They permeate government presumably by providing staff and transferring people over and recruiting the high-fliers from government for their own purposes," he told me. Read the full story in this month’s issue.

Carlos Martin Tornerocarlos.tornero[at]

Related storiesWhy the Big Four chip inLabour to win, if Big Four donation patterns become self-fulfilling prophecy

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