Corporate Crime still Pays

According to a Justice Department press release, KPMG LLC, the US member firm of KPMG International, a major international accounting and consulting firm, has agreed to pay $465 million in fines, restitution, and penalties, the result of tax evasion and shelters that cost the United States $2.5 billion in taxes not received.

How does this settlement deter future corporate fraud? If I said to you, “I’ll give you change for $1.00 if you give me $5.00,” would you be dim enough to take the deal? The actual figures were $465 million in exchange for $2.5 billion.

Shades of Enron and Arthur Anderson? When does the pattern of Robber Baron behavior consume all corporations? Is the corporate structure itself the problem?

CEO Timothy P. Flynn, in a PDF file says: “The resolution of this matter allows KPMG to confidently face the future as we provide high quality audit, tax and advisory services to our large multinational, middle market and government clients.”

In an unrelated(?) news item of the day, the Small Business Administration has reported that 23% of federal contracts awarded were to small business, but according to the Small Business League, this is likely not true.

“The latest SBA small business statistics ignore the findings of seven separate government investigations and two private studies that have all concluded the SBA has dramatically overstated the governments true level of contracts with small businesses by reporting billions in awards to many of the largest firms in the country as small business awards.”

One of the reasons given for the awarding of contracts to some of the largest U.S. firms is reported by the SBA to be “vendor deception.” The American Small Business League needed a court ruling upholding a FOIA request in order to obtain this information.

“What is in this report that the SBA doesn’t want the public to know?” asked Lloyd Chapman, president of the ASBL. “Instead of spending six months in court trying to suppress evidence, the SBA should be working to stop big corporations from stealing small business contracts.”

Well, now we know: Corporatist Crime still Pays