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. Last Updated: 07/27/2016

EDITORIAL: 'Exoneration' Should Not Be for Sale




Boris Berezovsky received a measure of vindication Monday when the auditing firm PricewaterhouseCoopers exonerated one of his companies [Forus] in a long-running investigation into embezzlement ?


f The New York Times on Tuesday


When news broke that the Central Bank had for years been funneling billions through a Channel Islands shell company with no offices or employees, the IMF was not amused. It demanded an accounting of the Financial Management Co., or FIMACO. Central Bank Chairman Viktor Gerashchenko turned to PricewaterhouseCoopers, his bank's official auditor. PWC duly investigated.


The resulting report was both highly valuable f largely because the IMF posted it on the Internet f and highly incomplete.


That the report had any meat at all to it was to PWC's credit: The Central Bank is a big client, and it might have been tempting to help Gerashchenko whitewash shennanigans at his bank. Instead, PWC's report confirmed the bank secretly invested its reserves via FIMACO f earning profits that have never been publicly accounted for.


"Were we lied to?" harrumphed Stanley Fischer, the No. 2 man at the IMF, after reading PWC's report. "The answer to that, coming out of [the report] is unfortunately 'yes.'"


That the report was incomplete, moreover, was hardly the fault of PWC. "The report is based solely on financial and other information provided by, and discussions with, the persons set out in the report," PWC warned. "PricewaterhouseCoopers have not carried out any verification work which may be construed to represent audit procedures."


PWC's admonitions aside, Gerashchenko seized the report and held it up like a shield. Exoneration! he cried f predictably. His allies referred to a PricewaterhouseCoopers "audit" that found nothing. And PWC, bound by professional ethics not to discuss its clients, watched and stewed.


Fast-forward a year, however, and what do we have? Oligarchs like Berezovsky have realized they can hire an auditor like PWC and pay them to write: "We were offered various scraps of information, and amid those scraps we have found no criminal activity."


And then the Berezovskys can cry "exonerated!" while PWC sits silent.


It's one thing to put together a for-the-public report about one's client, the Central Bank, and then to weather the regrettable political fallout. It's another entirely to take on a new, highly politicized client under investigation for embezzlement, knowing your work will be intentionally misrepresented to spruce up that company's political image. After all, some clients can be turned away, and not everything should be for sale.