XKPMG Tipping Point: The Tide Is Rising/Turning
In the White House, the code name for President Donald Trump is “Ever Ready”(in the old days a leading dry cell battery was named “Ever Ready”) because he is always ready to do combat with all and sundry – critics (especially the press); political adversaries, business rivals; and even his own friends not excluding members of his cabinet e.g. Rex Tillerson, the Secretary of State; Jefferson Sessions, the Attorney-General plus a long list of foreign foes ranging from Kim Jong-Un the Supreme Leader of North Korea and Gianni Infantino, the President of FIFA i.e. Fédération Internationale de Football Association.
One of the videos currently circulating on the internet portrays Trump vigorously lambasting the President of FIFA following the elimination of the American team from Russia 2018 after losing to a lowly rated team from Trinidad and Tobago.
“I blame FIFA, especially the President. The United States of America was forced to play against two countries at the same time – one from Trinidad and the other from Tobago. It is most unfair.”
Anyway, Donald Trump remains a fascinating character whether you hate him or loathe him. Even before breakfast, he had fired off several Tweet salvos against two Senators and a Congresswoman.
Against Senator Bob Corker, Republican Junior Senator from Tennessee:
“Bob Corker, who helped President O give us the bad Iran Deal & couldn’t get elected dog catcher in Tennessee, is now fighting Tax Cuts....”
“Corker dropped out of the race in Tennessee when I refused to endorse him, and now is only negative on anything Trump. Look at his record.”
Corker Fired Back Saying: “Same untruths from an utterly untruthful president. #AlertTheDaycareStaff”
Trump had some final remarks: “Isn’t it sad that lightweight Senator Bob Corker, who couldn’t get re-elected in the Great State of Tennessee, will now fight Tax Cuts plus!”
He also took on Republican Senator Jeff Flake from Arizona, who on the floor of the Senate, announced that he would not run again for his seat, as a form of protest against the President’s “reckless, outrageous and undignified” behaviour. He criticised the Trump Administration in his retirement speech saying:
“…We have again forgotten who we are supposed to be.
There is a sickness in our system — and it is contagious.
How many more disgraceful public feuds with Gold Star families can we witness in silence before we ourselves are disgraced? How many more times will we see moral ambiguity in the face of shocking bigotry and shrug it off?
How many more childish insults do we need to see hurled at a hostile foreign power before we acknowledge the senseless danger of it? How much more damage to our democracy and to the institutions of American liberty do we need to witness in silence before we count ourselves as complicit in that damage?
Nine months of this administration is enough for us to stop pretending that this is somehow normal, and that we are on the verge of some sort of pivot to governing, to stability. Nine months is more than enough for us to say, loudly and clearly: Enough.
The outcome of this is in our hands. We can no longer remain silent, merely observing this train wreck, passively, as if waiting for someone else to do something. The longer we wait, the greater the damage, the harsher the judgment of history.
We must never regard as “normal” the regular and casual undermining of our democratic norms and ideals. We must never meekly accept the daily sundering of our country.
I have been so worried about the state of our disunion that I recently wrote a book called “Conscience of a Conservative: A Rejection of Destructive Politics and a Return to Principle.” I meant for the book to be a defense of principle at a time when principle is in a state of collapse. In it, I traced the transformation of my party from a party of ideas to a party in thrall to a charismatic figure peddling empty populist slogans. I tried to make the case for the sometimes excruciating work of arguing and compromise.
This was part of the reason I wanted to go to the Senate — because its institutional strictures require you to cross the aisle and do what is best for the country. Because what is best for the country is for neither party’s base to fully get what it wants but rather for the factions that make up our parties to be compelled to talk until we have a policy solution to our problems. To listen to the rhetoric of the extremes of both parties, one could be forgiven for believing that we are each other’s enemies; that we are at war with ourselves.
But more is now required of us than to put down our thoughts in writing. As our political culture seems every day to plumb new depths of indecency, we must stand up and speak out. Especially those of us who hold elective office.
To that end, and to remove all considerations of what is normally considered to be safe politically, I have decided that my time in the Senate will end when my term ends in early January 2019. For the next 14 months, relieved of the strictures of politics, I will be guided only by the dictates of conscience. It’s time we all say: Enough.”
Trump made a quick rebuttal to these statements: “The reason Flake and Corker dropped out of the Senate race is very simple, they had zero chance of being elected. Now act so hurt & wounded!”
“The meeting with Republican Senators yesterday, outside of Flake and Corker, was a love fest with standing ovations and great ideas for USA!”
“Jeff Flake, with an 18% approval rating in Arizona, said “a lot of my colleagues have spoken out.” Really, they just gave me a standing O!”
Against Frederica Wilson, a Democratic congresswoman, after she criticized President Donald Trump over his remarks to the widow of a soldier killed in Niger, Trump had this to say as a rejoinder:
“Democrat Congresswoman totally fabricated what I said to the wife of a soldier who died in action (and I have proof). Sad!”
“I hope the Fake News Media keeps talking about Wacky Congresswoman Wilson in that she, as a representative, is killing the Democrat Party!”
“Wacky Congresswoman Wilson is the gift that keeps on giving for the Republican Party, a disaster for Dems. You watch her in action & vote R!”
He was remarkably cool and composed as he walked into the room full of XKPMG partners who are still awaiting their gratuity and pension - to discuss his new tax proposals/ reform. We were all set for the validation tests; the sensitivity tests; the scenario planning; computer modelling; financial modelling; risk analysis; stress test etc. Donald Trump was as unpredictable as ever. He launched into a jubilant self-recommendation and approval/advertisement.
“We are winning on all fronts. We have done more in the last nine months than all previous administrations. The jobs are coming back. The New York Stock Exchange Dow Jones Index hit an unprecedented 23,000. Even ISIS is on the run. We have regained control of Raqqa.
As for tax reform, it is a war and we are going to win it.”
We were then treated to a giant screen video of Mr. Nick Parker President of The Institute of Chartered Accountants in England and Wales (ICEAW). His deposition was on taxes.
“With utmost sense of responsibility, our Institute is compelled to warn against the imminent crackdown by Her Majesty’s Revenue & Customs [HMRC] on off-shore trusts. It will hit workers including cleaners, teachers and nurses who have been misled into using these schemes which are technically deemed as “disguised remuneration” by HMRC whereby the employer pays the contribution to an offshore trust, instead of paying remuneration directly to the employee. Thereafter, the trust would pay the money to the employee in the form of loans (usually interest free) on terms which effectively meant that they would never be repaid during the employee’s lifetime. As we have explained on our institute’s website, workers would be severely hit if and when taxes are imposed on transactions some of which go as far back as twenty years ago.
This is little sympathy for those people who adopted disguised remuneration in order to avoid (evade) tax and national insurance contributions and knew exactly what they were doing. However, others do not deserve heavy penalties as they may not have understood the schemes or had a choice if they wanted the work.
In Britain, workers such as nurses, teachers, information technology workers and cleaners were often paid earnings at around the national minimum wage with the balance being paid through loan arrangements. They may have been uneasy about receiving loans rather than pay but assumed that employers were acting within the law. HMRC should have acted far sooner against the schemes. It is beyond doubt that employees and contractors in disguised remuneration loan schemes were avoiding tax. We urge HMRC to adopt a sympathetic and flexible approach that would allow people extended time to pay their tax bills. The exchequer’s need to recover tax lost needs to be balanced with legitimate expectations.”
Actually, it was former Chancellor of the Exchequer, George Osborne ( who is now the Editor of “Evening Standard”, a free newspaper) and a fierce critic pf Prime Minister Theresa May whom he has labelled as “Dead Woman Walking” who announced the (tax) charge in his 2016 Budget and expected to raise £1 Billion from employers, companies and individuals.
In its very measured response, HMRC insisted:
“Our policy measures ensure that those who have used disguised remuneration tax avoidance schemes pay their fair share of tax and national insurance. We accept 95 per cent of Time to Pay requests covering accelerated payments. Any taxpayer who thinks they will have problems paying tax bills should talk to us. We have an outstanding record for supporting those with genuine financial difficulties.
In July this year, the Supreme Court ruled in favour of Her Majesty’s Revenue & Customs after a long running dispute over offshore trusts used by Rangers Football Club in a case that would have wide ranging implications for similar tax avoidance schemes.”
The credit for the video was rightly awarded to Vanessa Houlder.
Straight after the coffee-break, Donald Trump was back on centre stage:
“It is not true that I hate everybody but there are times when you have to fight for what you believe and make things better. Neither is it true that I only like people who are like me; or that I am only comfortable with billionaires. I have just had a terrific meeting with Paul Rudd who is my long-time friend and confidant. He is my genuine friend. That he is a very successful businessman is an entirely separate matter.”
What Trump chose to brush off is that he is not only the wealthiest President of the United States of America ever but his cabinet is saturated with billionaires like Wilbur Ross, the U.S. Commerce Secretary who is worth $2.5 billion; Carl Ichan, Trump’s Special Advisor on Financial Regulation worth $16 billion; Steve Schwarzman who is the Chairman of Trump’s Strategic & Policy Forum who has a net worth of $11.8 billion; Stephen Feinberg, Trump’s Unofficial Intelligence Advisor
We must never regard as “normal”the regular and casual undermining of our democratic norms and ideals. We must never meekly accept the daily sundering of our country. I have been so worried about the state of our disunion that I recently wrote a book called “Conscience of a Conservative: A Rejection of Destructive Politics and a Return to Principle.” I meant for the book to be a defense of principle at a time when principle is in a state of collapse
who is worth $1.2 billion; Co-chairmen of Trump’s Infrastructure Committee - Richard LeFrak and Steven Roth who are worth $6.5 billion and $1.1 billion respectively.
Donald Trump took the XKPMG partners completely by surprise when he insisted that since we had all listened to the President of the Institute of Chartered Accountants in England and Wales, Mr. Nick Parker, there are other matters which should be of grave concern to us. As if on cue, the front page of “The Financial Times” of 16th September 2017 popped up on the screen with the bold headline: Kpmg Axes South Africa Executives As Gupta Rocks Professional Services:
“The South African scandal engulfing President Jacob Zuma and the billionaire Gupta family spread deeper into the global professional services sector yesterday when eight senior executives were dismissed from KPMG’s division in the country.
The biggest political scandal to face South Africa since the apartheid era has already triggered the collapse of PR firm Bell Pottinger and forced McKinsey, the consultancy firm, to launch an investigation into its work in the country.
Public outrage about the Guptas’ role in South African politics intensified in June when leaked emails fuelled fears the family was exploiting its friendship with Mr Zuma to win state contracts and manipulate political appointments. The family and Mr Zuma deny the allegations.
The KPMG departures came after an internal investigation found the firm had missed red flags in its auditing of companies owned by the Gupta family. The auditor said on Friday that KPMG South Africa had received warnings “regarding the integrity and ethics of the Guptas” that were not acted upon, and which should have led to it cutting ties with the family sooner.
KPMG audited companies linked to the Guptas for 15 years but ended its relationship with them in March 2016 as the political scandal over the family’s links to Mr. Zuma deepened.
Trevor Hoole, the KPMG South Africa chief executive who left yesterday, admitted last month that the group “should have stopped working for the Gupta companies sooner than we did”.
KPMG has become central to the Gupta scandal since the leaked emails showed its South African office allowed a Gupta-owned company, Linkway Trading, to treat spending on a Gupta family wedding as a business expense.
Opposition parties and activists, who have accused Mr Zuma of running a state system riddled with corruption and cronyism, have turned their focus on global companies tainted by the scandal.
Save South Africa, a civil society group, has accused KPMG and Bell Pottinger of playing a “central role in facilitating state capture”. It has urged KPMG and McKinsey clients to drop the firms.
KPMG has denied that it “was involved in, or condoned, any alleged money laundering activities” connected to Gupta-owned companies or facilitating offshore tax evasion.”
President Trump was back on his feet: “I am particularly concerned by these unsavoury developments because when I hosted African leaders last month in New York during the United Nations General Assembly, I assured them that the United States of America is re-assessing Africa with a view to designating it as the new frontier for American companies for investments. The response has been most encouraging.
Auditors play a crucial role in ensuring the stability and integrity of the financial system. I have already implored the President of the World Bank Dr. Jim Yong Kim; Mr. Antonio Guterres, Secretary-General of the United Nations; and Mrs. Christine Lagarde, President of the International Monetary Fund to set up a committee to thoroughly investigate all these complaints against auditors – without compromising the lessons learnt from the demise of Arthur Andersen following the Enron Scandal.
I intend to nominate, Mr. Barry Melancon the President of the Association of International Certified Professional Accountants; Ms. Rachel Grimes the President of the International Federation of Accountants [IFAC] and Mr. Nick Parker, President of the Institute of Chartered Accountants in England and Wales [ICAEW] to join them.
We must restore confidence in auditors and dissuade accountants from mortgaging their souls, regardless of whether or not they have retired.” President Trump was not done yet. “I believe in leadership by example and that is why it is not sufficient for me to urge American companies to invest in Africa.
The first Super Trump Tower in Africa is going to be built on the site of the demolished Chief J.K Randle Memorial Hall and the adjacent Dr. J.K. Randle Swimming Pool plus what was previously known as the Love Garden. Consequently, we shall serve notice on Construction Kaiser Limited and Ford Foundation as well as others (particularly the government) who have invaded the land. The ethos of American business and philosophy of enterprise is that whatever can be handled by private endeavour should be left to the private sector. The government has no business in business. The rule of law must be seen to prevail; otherwise business cannot thrive. Indeed, unless Africa can get its act together, the United States of America and Europe will continue to be burdened by the refugee problem and the hopelessness which ISIS; Boko Haram; Al Shebab and other insurgents have capitalised upon and exploited cynically/ ruthlessly.
Let me quote General Thomas Waldhauser - “With all the challenges with the youth bulge, the poverty, the lack of governance, the wide open spaces, these are areas where extremists like ISIS or Al Qaeda thrive. In places like the Sahel, in places like Somalia, ISIS continues to look for location, looks for places to establish itself.”
Most unexpectedly, Donald Trump declared his commitment to Africa:
“I have made it clear that America comes first in my vision and strategy. Regardless, I shall devote significant time to Africa and its 1 billion people. We must abolish the permanence of suffering. By the same token, we cannot expect Africans to embrace triumph and disaster with the same phlegmaticsm. There will always be consequences.
I would like to seize this opportunity to let the retired partners of KPMG who are still awaiting their gratuity and pension that as we speak, some of the interventions and initiatives I spoke about will commence shortly.
We have reached the tipping point and the tide must rise in our favour.”
It’s all over Washington D.C. The rumour is that President Trump is really only comfortable in the company of fellow billionaires. As he made his exit, we caught a glimpse of his billionaire pals – the heavyweights of American business – led by Peter Thiel, the venture capitalist and a co-founder of PayPal. Ironically, Jeff Bezos of Amazon; Tim Cook of Apple; Mark Zuckerberg of Facebook and Sundar Pichai of Google Inc. insisted that their lunch meeting with President Trump had nothing whatever to do with politics – just business, especially Information Technology and its impact on business.
As for Bill Gates, former Chairman of Microsoft, he was adamant that his main focus is on fighting poverty and disease in Africa. The more money he gives away through his Bill and Melinda Gates Foundation, the more his wealth grows by leaps and bounds. Amazing!!
Then Came the Breaking News:
“PricewaterhouseCoopers (PWC) estimates that 38 per cent of all jobs in the U.S. could be lost to automation in just 15 years.”
“More than a third of U.S. jobs could be at “high risk” of automation by the early 2030s, a percentage that’s greater than in Britain, Germany and Japan, according to a report released Friday.
The analysis, by accounting and consulting firm PwC, emphasised that its estimates are based on the anticipated capabilities of robotics and artificial intelligence, and that the pace and direction of technological progress are “uncertain.”
It said that in the U.S., 38% of jobs could be at risk of automation, compared with 30% in Britain, 35% in Germany and 21% in Japan.
The main reason is not that the U.S. has more jobs in sectors that are universally ripe for automation, the report says; rather, it’s that more U.S. jobs in certain sectors are potentially vulnerable than, say, British jobs in the same sectors.
For example, the report says the financial and insurance sector has much higher possibility of automation in the U.S. than in Britain. That’s because, it says, American finance workers are less educated than British ones.
While London finance employees work in international markets, their U.S. counterparts focus more on the domestic retail market, and workers “do not need to have the same educational levels,” the report said. Jobs that require less education are at higher potential risk of automation, according to the report.
Other industries that could be at high risk include hospitality and food service and transportation and storage.
Analysts have said truck driving probably will be the first form of driving in the U.S. to be fully automated, as long-range big rigs travel primarily on highways — the easiest roads to navigate without human intervention.
But robots won’t necessarily replace so many human workers. The report highlights several economic, legal and regulatory hurdles that could prevent automation, even in jobs where it would be technologically feasible.
For one, the cost of robots — including maintenance and repairs — could still be too expensive compared with human workers. And in the case of self-driving vehicles, questions remain about who is liable in an accident. In other words, moving robots outside of a controlled environment is “still a big step,” said John Hawksworth, chief economist at PwC in Britain.
Treasury Secretary Steven Mnuchin said Friday that he wasn’t worried about artificial intelligence taking over American jobs.
“I think we’re so far away from that that it’s not even on my radar screen,” he told Axios Media. “I think its 50 or 100 more years.”
Mnuchin also said automation would enable human workers to do more productive jobs at higher wages. “It’s taken jobs that are low-paying,” he said. “We need to make sure we are investing in education and training for the American worker.”
Automation could end up creating some jobs, the PwC report said. Greater robotic productivity could boost the incomes of those behind the new technology, which Hawksworth said could flow into the larger economy.
Sectors that are harder to automate, such as healthcare, could also see a rise in jobs, he said.