Who knows, who cares?

As I’m getting ready to close out this annis horribilis I read this beautfiully crafted piece from Alan Rusbridger, editor in chief of The Guardian. It candidly chronicles the issues surrounding its botched reporting of Tesco’s tax avoidance schemes in the middle of 2008 and the difficulties the paper had in unraveling the story. While Alan doesn’t play up the points, a few nuggets are worthy of mention:

Some of the most critical developments concerning economics, security, the environment, and social policy are immensely complex and worthy of careful explanation. But they do not necessarily sell newspapers. News organizations in the Western world, struggling with declining audiences and revenue, are shedding journalists, closing down foreign operations, and cutting costs. But they are also increasingly inhibited by efforts—of government officials and of private corporations—to prevent them from protecting sources or from carrying out difficult investigations. Many minds are rightly focused on the regulatory, economic, technological, and legal issues that news organizations committed to serious journalism should be addressing.

It is a sad fact of life that the things which are of interest to me in this realm will never garner a mass audience. To many people, the topic of ethics in the profession are too divorced from the day to day realties people face. Matters not. And I won’t shed any tears for the demise of dead tree technology. Yet there is a certain truth in his assertions. In order to properly uncover some of these highly technical stories, media needs expertise. It turns out The Guardian didn’t have that expertise to hand for the story it was trying to uncover. As becomes clear in Alan’s account, a strategy of partial obfuscation was always going to keep The Guardian at least one step removed from the truths they were endeavoring to understand and expose:

Essentially, the only people qualified to produce wholly authoritative libel-proof assurance are the very people involved in constructing the strategies under scrutiny. They do not come cheap—and many of them have conflicts of interest.^[4] Some would give advice in private, but would not speak in public or in court.

It is hardly surprising Tesco employed a particularly aggressive set of tactics in an effort to not only muzzle The Guardian, but effectively warn it off from attempting further investigative reporting. Even so, Tesco itself incurred significant costs in interpreting its own information such that it could be made available for public consumption. Such is the state of tax planning in the UK that Alan concludes:

The truth is that the advanced tax planning undertaken today by most global companies is as intelligible to the average person as particle physics. This state of incomprehension extends to most journalists, editors, parliamentarians, and, importantly, company directors themselves—executive and nonexecutive.

He is right. I reckon I’m a reasonably smart fellow when it comes to understanding tax schemes – heck I had a bit of a career in that regard many years ago. But I recall many a conversation with Richard Murphy around that time attempting to grasp the implications of what was going on. The fact is when the accountants and lawyers choose to make life opaque, they’re darned good at it. That doesn’t make it right but serves to make it incomprehensible to all but the sharpest minds. The same goes for media endeavoring to untangle the global financial crisis. As Francine McKenna so eloquently put it on audit matters:

The mainstream media demonizes “bad” mortgages, especially if they were given to “marginal” people.  They demonize greedy CEOs.  Well, you’re getting closer.  They demonize the ratings agencies.  Does the average consumer with a 12 year old financial education know who or what the ratings agencies do?   They tried to demonize “fair value accounting,” but no one in Congress really understood what the hell anyone else was talking about so it was hard for the Senators and Congress-people to shout down an accounting standard.  It’s just as well they didn’t try to demonize the Big 4.  Those still watching network news for their updates have no idea of their role either.

It’s not that media doesn’t try. Goodness knows it does its best in a world dumbed down by sound bites. Alan’s essay is testament to that. The harsh reality is that independent experts prepared to do the hard work for the public good are in very, very short supply. If in reading this you’re getting bored with my continuing to mention Francine and Richard then that’s telling you something about the lack of heroes prepared to put their head above the parapet and use their skills to unpack the real story. And if you’re thinking ‘What about Woodward and Bernstein?’ then remember they had ‘Deep Throat’ to guide them all the way. You are very unlikely to find those types of character prepared to come forward in the multi-billion dollar tax and audit world.

Collectively and with others like Prem Sikka, we have voices that are increasingly being heard. We may have slightly different agendas but on one thing I am certain we are agreed. The profession is at real risk of being relegated to history as an artefact of a bygone age. It doesn’t have to be that way. I’ve always held the view that professionals have a pivotal role to play in guiding business. But…the profession has to change. Allowing itself to be bulldozed is not a great starting point.

My hope for 2009 is that the transparency so many of us have been screaming for will finally start to become a meaningful concept in the context of business that has become dangerously opaque. If we see progress on that front, then perhaps it will become much easier to explain what’s happening to the public and in so doing, bring attention to matters which affect us all.

Pic source

Related articles by Zemanta

• Roy Greenslade: Tesco versus The Guardian, by Alan Rusbridger

Tagged as: Alan Rusbridger, Francine McKenna, Tax avoidance and tax evasion, Tesco, The Guardian