Independence: Apparently for CPAs only!

3 Minute Read
Posted by Randy Eickhoff on Nov 3, 2011 9:38:00 AM

Randy_Eickhoff,_President,_Acena_ConsultingI don’t usually blog more than a couple times a week and wasn’t planning to write another blog today….and then there was NextEra Energy and the impending fall out that doesn’t seem to be hitting home the way it should. So, call it a blog, call it a rant, but sometimes you just gotta comment.

 

Ethics and Independence in Politics

As a licensed CPA, attorney or doctor (and there are a few others that have written standards) you are required to abide by a set of ethical standards that include (in the case of CPAs especially) independence both in fact and in perception. As I read about the conflict-of-interest allegations coming from the almost $2 billion loan guarantees given to the very profitable NextEra Energy by the US government (see the Fox article here), it struck me that I am not, repeat NOT, hearing that there should be similar standards in Washington.

I suppose it’s OK for a CEO to sit on a presidential panel and recommend actions that benefit his (or her) company as it appears Lewis Hay (CEO for NextEra Energy) has done.

Many members of Congress are calling for those that have a conflict-of-interest to recuse themselves from specific votes or projects that could benefit the companies they run. When you have a panel that covers issues that are pervasive in all industries, how exactly would you do that? How about this…

you can’t be on the panel!

Simple black and white solution

Case closed?

Well, not exactly, how about this for starters, if you have a financial interest or if an immediate family member has a financial interest or ownership (and I don’t mean controlling interest, I mean financial or ownership interest of any kind including one share of stock),

you can’t be on the panel!

How is it that as a CPA who is charged with upholding a high ethical standard can lose his license for violating ethical standards but elected officials can appoint friends with clear conflicts of interest and we have no recourse except public opinion?

Why am I not hearing elected officials suggesting these types of solutions?

Could it be that it might mean a large campaign donor would not get a voice or position on a future panel because of their job, board seat or other affiliation? If it’s that important, they can give up their board seat or CEO role. Otherwise,

…sorry, you are conflicted out, end of story.

 

What say you friends?

Am I way off base expecting elected officials to be held to a higher ethical standard and perhaps lose their “license” to hold office for violation?

Should panelist be required to be independent in fact and perception and have no ownership or financial interests where their efforts on the panel would affect them or their company?

Are some presidential panelists really lobbyists for their industry making recommendations that will provide benefits to their company or industry?

Randy Eickhoff, CPA is President of Acena Consulting. With more than 20 years of tax and consulting experience, Randy focused on helping companies successfully document and secure tax incentives throughout the US. He has been a long-time speaker nationally as well as conducted numerous training sessions on R&D tax credits and other US tax incentives.

 

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