Ernst & Young, the silence is deafening!

Following is a response to the statement published by Ernst & Young.

People with things to hide generally sneak around, aiming to placate those who can advance their situation. They avoid speaking to the victim of their wrong doings, unless it is to inflict further hurt and they certainly never admit to having been wrong in the first place. These are the hallmarks of a narcissist. They are also the hallmarks of a liar.

In the second half of last year, The Economist published an article, How to tell when your boss is lying, drawing attention to detailed research by Larcker & Zakolyukina into the detection of deception in conference calls.[i] The paper is interesting in that it was specifically targeted to the accounting industry and methods used by CEOs and CFOs to deceive others about their financial position. In particular, it is the linguistic features used by Larcker & Zakolyukina that intrigue me, because many of the hallmarks are reflected in the statement published by Ernst & Young a few weeks ago in response to a post on Blak and Black regarding corporate responsibility within the accounting firm and a second post questioning their diversity credentials.

Larcker & Zakolyukina point out some of the linguistic theories underpinning non-verbal behaviour. One particular point is the brevity of a statement. Readers could simply say that Ernst & Young, in their pithy response, were simply keeping it short and to the point, but the problem is they’ve missed the most glaring point in the whole issue – the release of Pat’s personnel file, approved by Gillian Morphatt (then Manager of Human Resources, Ernst & Young Canberra) into the hands of Pat’s subordinate (the Inquisitor, an ACT Department of Treasury employee), despite the express notice to the partnership by Bradley Allen lawyers that the Inquisitor was acting ultra vires and that Pat’s file should remain confidential. In addition the Inquisitor, in a written response to Mr. Glen Gaskell (then Executive Director ACT Treasury, responsible for fraud investigations) admitted that Ernst & Young were aware that his request was personal and therefore without the authority of the ACT Department of Treasury. If this is correct, Ernst & Young appear to have knowingly colluded with the Inquisitor to create a situation in which Pat could be terminated from his employment with ACT Treasury, thereby bringing to an end the fraud investigation into the Inquisitor. It also contradicts the claim by Ernst & Young that they were acting under the National Privacy Principles, a ruse in itself since the NPP does not cover ACT Treasury.

The breach also had the effect of ceasing an action in HREOC, proposed by Pat against Ernst & Young, for a prior failure by them to protect what should have been Pat’s confidential personnel file and for alleged racist and discriminatory remarks made by Tanya Taylor (at the time an Ernst & Young Recruitment Consultant, who made all official communications in relation to Pat’s matters on Ernst & Young letterhead) at an earlier interaction she had with the Inquisitor regarding Pat’s qualifications. Tanya Taylor was aware of the proposed HREOC action against both her and a former director of Ernst & Young when she provided access to Pat’s file on the second request.

The failure of Ernst & Young to protect the documents is further underscored by the alleged manipulation of the former Commissioner’s personnel file accessed by Tanya Taylor, now attested to by several independent parties and alluded to by ‘Tom Payne’ himself. Pithiness is fine, as long as you address the substance of the claims; Ernst & Young instead are choosing to continue to play ostrich.

Another marker of deception is the use of more extreme positive emotions. Company CEOs who seek to deceive tend to use terms that are more emotionally extreme or positive. The statement points out their ‘abhorrence’ to the comments by Tom Payne and then pushes their stated company values and commitment to quality. Ernst & Young, have you by chance any idea to what ISO 9001 relates? It is about quality management, the policies, procedures, complaints and improvement processes developed and embraced by an organization, any organization and involves constant review and a willingness to deal with problems within the organization to the mutual satisfaction of all stakeholders. The statements released show absolutely no commitment to addressing or resolving the issue generated by the Canberra office. As such, how can any other potential or existing employee, let alone client, be assured of your willingness to deal with failures of confidentiality or inter-corporate disputes?

Release of the statement on the Ernst & Young website and on Big4.com without actually making contact with Blak and Black shows a clear avoidance of the issues and an attempt to control the situation. The lack of detail and indication that there will be no further comment screams “COVER UP!” The focus is shifted to the disgusting comments by Tom Payne and a glib jibe that there is no past or present employee by that name on their records. Does anyone truly believe that ‘Tom Payne’ is his real name? There are specific indicators that the writer knows people involved in the issues related to Pat, making his assertion that, “… you know who I am we worked together at Ernst & Young Canberra …” seem one of only two credible remarks in his comment (Comment 4, below the post. The other credible remark relates to Tanya Taylor).

I posit, Ernst & Young, that the evasiveness of your statement, your neglect in forwarding such directly to Blak and Black and the attempts to divert attention are all signs of your feelings of guilt in matters relating to the racist attack and annihilation of the career and reputation of the former Commissioner for ACT Revenue. Your statement, in refusing to address the issues directly show an inability to embrace them, indicating that you don’t know how to respond because you’ve never had to deal with something like this before. What’s more, the statement contact, being one Merryn Stewart, Director Strategic Communications, Oceania, suggests a strategic defence rather than any real attempt address the issues. The complete omission of reference to the actual substance of the posts detailing the failure of Ernst & Young to protect a former employee from the attack of the malicious Inquisitor, whom you knew was under investigation within his own department, suggests a collusion of purpose and hubris that continues to this day.

Dancing around the topic, ignoring the internal failures of your staff and diverting attention by pointing at others does nothing to explain the reasons for supporting the racist attack on Pat or to prove your commitment to diversity or corporate responsibility. It does nothing to explain why an accounting company would disrupt a fraud investigation into the Inquisitor, for which a terms of reference already existed as admitted to under cross examination by the Inquisitor himself. It does nothing to explain to the taxpayers of the ACT what happened to the millions of dollars in missing money from ACT Treasury.

Lies have a way of catching up with people … and organizations. James Hardie (asbestos), American Tobacco (smoking), the Office National Assessments (Andrew Wilkie and weapons of mass destruction). What is damaged in the fallout when lies are detected is trust, a commodity that can be bought, but only to a certain point and which otherwise must be earned. You have lost your right to be trusted by Pat and his family, Ernst & Young and they have every right to warn every person they possibly can about how your company continues to fail to address its failures. Keep playing ostrich. You’ve been shown for what you are. I can only think that Rob McLeod, your Maori Oceania CEO is all talk. Silence is not always golden.

“This truth is incontrovertible. Panic may resent it, ignorance may deride it, malice may distort it, but there it is.”

Winston Churchill, 17 May, 1916, Royal Assent