How accounting giants craft favorable tax rules inside government
This year Mr. Harter returned to PwC.
“I have fully complied with the Treasury Department’s conflict rules by not meeting with PwC officials” during a two-year “cooling off” period that prevents government officials from meeting with their former employers, said Mr. Harter. Although he was involved in building the overseas tax break and met with corporate lobbyists, Mr Harter said he had no recollection of meeting Ms Olson or others. PwC officials on the subject.
Ms Olson referred the questions to PwC.
An indoor track
The 2017 tax overhaul included a provision allowing certain people to benefit from a 20% tax deduction on certain types of business income. But the law – known as Section 199A – largely excluded an undefined category of “brokerage services”. In 2018, lobbyists from several industries, including real estate and insurance, went to the Treasury to try to persuade officials that the broker ban should not apply to them.
On August 1, records show Ms Ellis met with her former PwC colleague, Mr Feuerstein, and three other lobbyists for her client, the National Association of Realtors. They wanted real estate brokers to be entitled to the 20% deduction.
The meeting took place even before the first draft of the proposed rules were made public, which meant that from the start Ms Ellis’ former PwC colleague and her client had a privileged lead.
When the Treasury released its first version of the proposed rules a week later, real estate brokers were eligible. The National Association of Realtors took credit for the victory on their website. (The final rules only applied to brokers in stocks and other securities.)
Ms Ellis’ meeting with Mr Feuerstein appeared to violate a federal ethics rule that bars government officials from meeting with their former colleagues in the private sector, said Don Fox, acting director of the Office of Government Ethics under the administration and, before that, lawyer in the Republican and Democratic administrations.
Mr. Fox called the meeting improper. “It will definitely call into question the way this regulation was drafted,” he said. “There’s no way to undo the taint that’s going to be attached to it now.”