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Tell EY’s Mark Weinberger To Quit President Trump’s Business Advisory Council

Posted on by Caleb Newquist
ernst young mark weinberger trump advisory council

I’m overstating the obvious here, but there’s something disturbing when the President of the United States can’t be bothered to unequivocally condemn white supremacists. The fact that I even have to write that sentence blows my mind.

This morning, in response to President Trump’s remarks, Merck CEO Kenneth Frazier announced that he was resigning from the President’s American Manufacturing Council:

Trump, in a moment of grace and humility, accepted Mr. Frazier’s resignation and stated that he had learned from his mistakes.

HAHAHAHAHA. No, not even close:

Right now, business leaders that are serving on any of the President’s advisory councils should be re-thinking that position. And by “re-thinking” I mean, they should quit. Today. Right now. Here’s the full list of them courtesy of Politico’s Dan Diamond:


Hey, look, there’s EY’s Mark Weinberger without his name crossed off.

Mark Weinberger is the global leader of a firm that has gone on record that they want their employees to talk about politics at work. Here’s an entire page on the firm’s website with videos of leaders, including Weinberger, talking about diversity and inclusion. Mark Weinberger has repeatedly gone on record about the importance of diversity and inclusion at EY. Here a video of him giving a 20+ minute speech on it:

You don’t have to watch the whole thing, you’ve heard it all before. But at 25:20, Weinberger says, “We have to back up our rhetoric with action.”

Fine, so this is the perfect opportunity to say this — If Mark Weinberger cares so much about diversity and inclusion and he believes in backing up rhetoric with action, then he needs to resign from the President’s Strategic and Advisory Council. It shouldn’t be a big deal. If Mr. Weinberger believes in all the things he says about diversity and inclusion, then this decision is easy. It would be far easier than most of the decisions that the global CEO of one of the largest accounting firms ON EARTH would have to make.

Some might say that Weinberger could help Trump learn more about the importance of inclusion, after all, he’s already the guy who’s supposed to educate him about the importance of women in the workplace. But then I’d ask those people: Do you believe that Trump listens to anyone who doesn’t come calling without a praise folder? Weinberger isn’t going to change Trump’s mind because Trump does not care.

So what’s the point of Weinberger remaining on the council? There is none. So resign, Mark! It’s the right thing to do. Do you honestly think that in 10 years — hell, 2 years! — you’ll look back and think, “Boy, I’m glad I stuck with Trump.” You will not.

And you can tell him too: Here’s Mark’s Twitter account. Just tweet at him! Something like, “Hey Mark. Please quit the president’s strategic and advisory council.” Or, “Dude! Get off Trump’s council. What’s wrong with you?” If you work at EY, email him! Don’t forget, EY says that it wants you to talk about politics at work. So talk about it! Tell your GLOBAL CEO to quit Trump. Come on, Mark. This is ridiculous.

Image: YouTube

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Making Sense of the Ernst & Young Defense

Over at Bloomberg, Jonathan Weil (who has the tendency to let the dust settle before chiming in) takes Ernst & Young to task for their lack of willingness to take responsibility for the Lehman Brothers bankruptcy and digs up a bunch of old bodies in the process.

E&Y had established itself as a repeat offender long before Governor-Elect Cuomo filed his suit. In recent years we’ve seen four former E&Y partners sentenced to prison for selling illegal tax shelters, while other partners have been disciplined by the SEC for blessing fraudulent financial statements at a variety of companies, including Cendant Corp. and Bally Total Fitness Holding Corp.

In the Bally case, E&Y last year paid an $8.5 million fine, without admitting or denying the SEC’s professional-misconduct claims. The SEC also has imposed sanctions against E&Y three times since 2004 for violating its auditor-independence rules.

After that friendly reminder (which certainly makes some people wince), JW takes a look at the E&Y’s response to the suit, specifically the part where they more or less say that Cuomo is off his rocker, “There is no factual or legal basis for a claim to be brought against an auditor in this context where the accounting for the underlying transaction is in accordance with the Generally Accepted Accounting Principles (GAAP).”

Weil says E&Y is missing the point entirely:

That isn’t an accurate depiction of the claims Cuomo brought, though. Cuomo’s suit unambiguously took the position that Lehman violated GAAP. What’s more, it’s not credible for E&Y to say that Lehman didn’t. (An E&Y spokesman, Charles Perkins, said he “can’t comment beyond our statement.”)

In the footnotes to its audited financial statements, Lehman said it accounted for all its repurchase agreements as financings. This was false, because Lehman accounted for its Repo 105 transactions as sales, a point the Valukas report chronicled in exhaustive detail.

The question is, of course, if this all adds up to fraud on E&Y’s part. Cuomo says it does. Weil says that E&Y needs to come up with a better story. Colin Barr, on the other hand, writes that E&Y could easily turn the tables:

The Ernst & Young statement suggests the firm will argue that it can’t be prosecuted under the Martin Act because Lehman, not E&Y, was the outfit actually producing the financial reports, and because it was Lehman, not E&Y, that was peddling billions of dollars of securities just months before its implosion.

In this view, E&Y was just a gatekeeper hired to vouch for Lehman’s books, something it will claim it did well within the confines of the law. This strikes lawyers who are familiar with the law as an eminently reasonable approach, if not exactly a surefire recipe for success.

“If I were Ernst & Young, I would assert I was not a primary actor,” said Margaret Bancroft, a partner at Dechert LLP and author of a 2004 memo that explained the Martin Act soon after Spitzer began brandishing it against Wall Street. “You can say that with more than a straight face.”

“Just gatekeepers,” and not “fraudsters,” is obviously the preferred view but the catch is, E&Y would be admitting that they are really shitty gatekeepers.

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