Stench of financial corruption can no longer be ignored

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Lead Editorial

31 May 2023
Vol. 25 No. 22

The scandal that has erupted in Canberra around global Big Four accounting firm PwC (p. 3) could be the loose thread that unravels the corruption that is endemic in the global financial system. For more than two decades, the global financial system has lurched from crisis to even bigger crisis under the weight of thousands of trillions of dollars and pounds and euro and yen in unpayable debts and derivatives obligations, from unbridled speculation by banks and hedge funds. The big crack was the 2008 GFC, which forced central banks to scramble to print trillions to prop up the too-big-to-fail speculators, but which directly led to the runaway inflation that has forced the interest rate rises that threaten the system today.

The scores of banks that crashed globally in 2008 were all audited by one of the Big Four global firms–PwC, EY, KPMG, and Deloitte. These four firms, like the three ratings agencies, are the gatekeepers of the City of LondonWall Street financial system, auditing something like 98 per cent of the world’s biggest banks and corporations. But while they get to proclaim, through their audits, the legitimacy of multinational corporations, they have carefully guarded their partnership structures which has meant that nobody audits them! Herein lies a major opportunity for system corruption, which did manifest in terrible consequences in 2008, when the wave of bank failures proved their bogus audits had allowed the reality of real financial vulnerability and insolvency to go undetected for too long, until a crash became inevitable. Nothing was done to the Big 4 auditors, however, which continue to ply their corrupt trade.

The PwC scandal in Canberra is shaking the world; one expert reported to the AAS it is being described as an “Arthur Andersen” moment, after the collapse of another global accounting giant, Arthur Andersen, one of the thenBig Five, on the back of the Enron collapse in 2001. Arthur Andersen’s collapse was pre-GFC, however, so the implications of its collapse for the integrity of the financial accounts of the world’s major banks were not considered. Now they can’t be ignored.

How does a scandal like this erupt, so the stench cannot be ignored, when it is in the interest of very powerful people and institutions to keep it buried? Because no force or cabal of interests is all-powerful, and the actions of righteous people committed to truth and exposing corruption can make a difference.

The Australian Citizens Party is increasingly a major factor in how issues like this play out in politics. For our entire history the ACP has strived to expose the corrupting influences in the economy, and since 2017, with our campaign against the law to “bail in” customer deposits to prop up banks, the ACP has collected more and more collaborators, like banking expert Martin North, independent economist John Adams, and individuals inside other political parties including Katter’s Australian Party, the Greens, and One Nation, and even inside the major parties, who are also committed to cleaning up the system. Through that collaboration focusing on strategically important policies and areas of vulnerability for the banks, the ACP has helped to inform and marshall the engagement of everyday Australia citizens on issues about which they would otherwise never be aware. Over the last six years, this collaboration has grown in strength, resulting in numerous parliamentary inquiries and, more importantly, an awareness among the corrupt establishment that there is organised resistance to their dirty political and financial dealings.

This is evident in the fact that the PwC crimes now emerging were committed in 2014, but nothing happened until now. The arrogance of PwC speaks to a culture that didn’t fear political or legal repercussions. However, a lot has happened since then to force political attention on these points of potential corruption, thanks in part to our relentless efforts. Expect much more to follow.

In this issue:

• PwC scandal enabled by perverse secrecy laws
• An Open Letter to the Australian Government from concerned scholars regarding the AUKUS Agreement
• Nations rally to Eurasian solutions
• Part Seven: Taiwan exports political warfare
• The debate about ‘independence for Taiwan’—rebuttal of response
• AUKUS: No, no, no
• Fadden bi-election, perfect timing!
• ACP submission: No to nuclear for AUKUS and war, yes to nuclear for peace
• ALMANAC: ‘Break up Russia’ schemers play with fire

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