Tuesday, October 13, 2026

Op Rosny: The Global Rise of Electoral Dictatorships. Is the U.S. Next? Midterms Could Decide

 “People expect governments to operate with transparency, and they expect strong safeguards against undue influence.”


Crackdown on lobbyists after explosive anti-corruption inquiry

Third-party lobbyists will be forced to disclose links to local councils for the first time in a significant shake-up of integrity laws after the explosive Operation Rosny anti-corruption inquiry uncovered links between a slew of senior Liberal Party operatives and fugitive property developer Jean Nassif.
The Minns government will on Monday announce a series of reforms aimed at tightening lobbying laws, including new investigative powers that will formally establish the NSW Electoral Commission as the regulator for lobbyists, and hand the agency new powers to investigate any suspected breaches of the laws.
The Minns government will extend lobbying rules to local government after the Operation Rosny inquiry uncovered links between senior Liberal Party operatives and fugitive property developer Jean Nassif, right.ARTWORK: MARIJA ERCEGOVAC
The changes will also introduce rules restricting post-separation employment for senior bureaucrats, as well as recommending greater disclosure of contact between public servants and lobbyists, and requiring ministers to disclose meetings with lobbyists at political fundraisers.
The reforms, which come five years after ICAC recommended a major overhaul of lobbying laws in the state, are a watered-down version of reforms announced but never passed by former premier Dominic Perrottet before he lost power.
In the most significant change, the local government sector will be covered by lobbying rules for the first time.
While third-party lobbyists who work in the state and federal government spheres are required to be listed on a lobbying register and to adhere to ethical standards, no similar rules apply for local government. The NSW Special Minister of State John Graham said that “needs to change”…

Trump’s Unlikely Strategy to Control History: Footnotes

The Atlantic, no paywall: “Most of Donald Trump’s efforts to control the nation’s largest museum complex have been loud. 

He tried to fire a Smithsonian museum director on social media, ordered the placement of warning signs outside its American-history museum, and demanded that the museum take down a modernist sculpture he dislikes. But while this political theater plays out publicly, the White House’s Office of Management and Budget is quietly using an obscure funding power as part of its campaign to influence how the Smithsonian tells the American story. 

Late last month, according to previously unreported public records, OMB included a footnote in two recent apportionments of federal funds that conditions nearly $190 million for the Smithsonian on the institution’s compliance with Trump’s March 2025 executive order accusing it of spreading “divisive narratives.” Essentially, the White House is trying to force adherence to its preferred version of history through a little-known but legally binding budget mechanism. The fiscal-year-2027 footnote, which applies to funds carried over from last year in two of the Smithsonian’s main salaries and expenses accounts, reads:

To the extent permitted by law, amounts apportioned shall be available for obligation in a manner consistent with Executive Order 14253 (March 27, 2025), “Restoring Truth and Sanity to American History.”
That executive order marked the beginning of the Trump administration’s campaign to change the Smithsonian, alleging that the institution had come “under the influence of a divisive, race-centered ideology” and prohibiting “expenditure on exhibits or programs that degrade shared American values, divide Americans based on race, or promote programs or ideologies inconsistent with Federal law and policy.” The footnote does not specify how the Smithsonian should apply the order’s vague prohibition. But it is more than simply a threat: 
Apportionment footnotes are enforceable under the Antideficiency Act, the violation of which can carry criminal penalties. Such footnotes are one of several tactics that the Trump administration has used to try to supplant Congress’s spending power. In this case, the footnote suggests that the fight over the Smithsonian’s purpose goes much deeper than Trump’s most visible attacks…”

The Global Rise of Electoral Dictatorships. Is the U.S. Next? Midterms Could Decide

The Emancipator: “When Americans first elected Donald Trump president in 2016, there were nearly 4 billion people living in nations where they could vote in fair and competitive elections. 

Last year, when Trump took office again, this estimate had fallen by half, to barely above 2 billion  In the intervening years, the number of people barred from voting within conventional dictatorships (or “closed autocracies”) increased from an estimated 1.74 billion to 2.27 billion. But most of the decline in people who can vote in fair and competitive elections can be attributed to the global rise of what I call electoral dictatorships, also known as “electoral autocracies.” 

While elections are banned in conventional dictatorships, elections are regularly held in electoral dictatorships. But to ensure their continuous grip on power, the electoral dictators—who identify as presidents and prime ministers—hold uncompetitive and unfair elections after aggressively suppressing political opponents.

  • In 2016, an estimated 1.94 billion people lived in electoral dictatorships.
  • In 2025, 3.77 billion people did.
  • If Republicans retain control of Congress in the midterms, then an electoral dictatorship is likely to emerge in the United States…”

American High School Students Are Selling Guns Bound for Cartels

The New York Times, no paywall:  Drawn by money and status, teenagers in Arizona are buying, stealing and selling weapons destined for criminal groups in Mexico. They are too young to buy a beer and barely old enough to drive, yet these four teenage boys have already found their way into the criminal underworld. On weekends, they drive into the Sonoran Desert outside Phoenix. I watched them line up AR-15s and AK-style rifles against their cars, pose for photos and spend the afternoon shooting targets. 

At night, they head to parties, smoke pot and scroll endlessly through their social media feeds. These teenagers are part of a growing network of American high school students and young adults who are helping to arm some of Mexico’s most powerful and violent cartels, according to U.S. officials and trafficking experts who are tracking the trend. They source weapons like handguns and high-caliber rifles, and sell them almost exclusively to cartel operatives based in the United States, the teenagers said…”

See also CBS News: “…Gun rights: Viramontes v. Cook County and Grant v. Higgins. This latest Second Amendment dispute to arise following the Supreme Court’s landmark 2022 decision expanding gun rights involves state laws banning AR-15s and similar semiautomatic weapons. The two cases, which will be argued Dec. 2, involve a Connecticut law and an ordinance in Cook County, Illinois. Cook County’s prohibition was put in place nearly 20 years ago, while Connecticut tightened its rules for semiautomatic firearms after the 2012 mass shooting at Sandy Hook Elementary School.

 More than 10 states and the District of Columbia prohibit AR-15-style semiautomatic weapons. In both of the cases from Illinois and Connecticut, lower courts upheld the bans. The appeals courts each applied the new standard for determining the constitutionality of gun restrictions that the Supreme Court laid out in 2022, which requires the government to show that a law is consistent with the nation’s historical tradition of firearms regulation. In its ruling then, the Supreme Court recognized for the first time that the Second Amendment protects the right to carry a firearm outside the home. The justices have been asked to take up a number of challenges to longstanding federal and state gun laws in the years since. In 2024, the Supreme Court upheld a federal law that bars people subject to domestic violence restraining orders from having guns. 

Then, last year, it said that under the Second Amendment, the government cannot prosecute a habitual marijuana user for having a firearm. The high court also struck down a Hawaii law that required concealed-carry permit holders to receive permission before bringing their firearms onto private property that is open to the public. The Supreme Court had turned away challenges to laws from Maryland and Illinois banning AR-15s and other semiautomatic weapons, leaving those restrictions in place…”

Relevant and related, via The New York Times: Justice Dept. Turns to Partisans and Conspiracists to Fill Depleted Ranks. The civil rights unit has recruited people whose questionable work histories and dearth of education and experience might have disqualified them in the past, former officials said. 

A former prosecutor forced off a high-profile murder case for peeking at the defense team’s strategy documents. A onetime gambling executive who promoted conspiracy theories about the Las Vegas massacre in 2017. A Florida activist who once served 20 days in jail for hacking a local elections system. 

They are among the 130 lawyers who have recently joined the Justice Department’s short-staffed civil rights division as the Trump administration has struggled to fill the depleted ranks of a unit that was once a magnet for legal talent. Since early 2025, upward of 300 nonpolitical career employees, representing decades of experience, have left the division after its leader, Harmeet Dhillon, repurposed it to pursue President Trump’s agenda…”

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Monday, October 12, 2026

Edmund Tadros - KPMG culture inquiry reveals pressure to cheat

Fears about speaking up …

 

 KPMG culture inquiry reveals pressure to cheat by Edmund Tadros

Oct 11, 2026 – 4.00pm
An investigation into KPMG has found that the firm systematically mistreated, marginalised and took retaliatory action against anyone who spoke up internally about unethical behaviour, confirming a whistleblower’s allegations about its practices.
The report by consultancy Principia Advisory, released to partners on Friday, also found that a relentless commercial pressure to win work and increase revenue fuelled a culture of systemic internal cheating – driving partners to steal sales credits, under-cost proposals and pressure staff into under-reporting actual hours worked.
A new report has painted a dire picture of KPMG’s culture. Thomas Wielecki
It found there was widespread uncertainty across the firm about how to handle confidential information and that the previous executive team was perceived as insular and resistant to bad news.
The report said that these deep-seated cultural problems had developed despite the firm making a “meaningful investment in systems and processes designed to reinforce its ethical culture”.
But Principia concluded that while the firm had a “substantial ethical culture architecture” around expected behaviour, this system “was sometimes compromised by complexity and fragmentation”.

Principia made 14 recommendations, including that the firm reform the way its board operates to give it more independence, teach partners and staff about ethical decision-making, place more emphasis on ethical behaviour in its performance evaluation systems, and bolster the way it polices conduct.
KPMG chief executive John Sams and chairman Michael Ebeid said they accepted Principia’s findings and would incorporate all the recommendations into the firm’s evolving action plan to reform the way the partnership operates.
The report follows a separate investigation by consultancy Andrews Group on the firm’s treatment of the whistleblower after he raised allegations that audit partners misused confidential client data to win contracts. KPMG has been in crisis since those allegations became public.
That report found the firm systematically mistreated the whistleblower and buried his allegations in an ineffective, conflict-ridden process.
Sams and Ebeid said that Principia had identified a gap between the firm’s stated values and how personnel behave, that ethical issues were “compounded by structural weaknesses in our governance and oversight” and that the “high degree of variability in culture across the firm” led to a reluctance to speak up about bad behaviour.
“We are already taking steps that will help to address these findings – particularly in relation to our governance arrangements – but we fully acknowledge that there is more to do,” they said in a joint statement.

Fears about speaking up

The scandal has led to most of KPMG’s former executive team resigning, including chief executive Andrew Yates, chairman Martin Sheppard, and audit partners Kim Lawry, Paul Rogers and Julian McPherson. Former chief operating officer Eileen Hoggett was sacked.
The Principia report was one of nine external reviews or investigations into aspects of the scandal. As part of its investigation, Principia spoke to almost 500 KPMG partners and staff, surveyed 3400 personnel, reviewed 176 documents and reviewed 14 randomly selected cases from the firm’s whistleblower hotline.
The 69-page report found there was a widespread fear that speaking out about unethical behaviour would lead to negative outcomes.
“During walk-in interviews, we heard recurring reports of adverse consequences that were perceived to be associated with speaking up, including impacts on performance processes, reduced access to work, diminished progression opportunities, reputational harm and deterioration in workplace relationships,” the report stated.
Principia also found the firm’s ethical rules were overly complex and disjointed, making it difficult for partners and staff to understand or apply the rules effectively in day-to-day practice.
“Recurring feedback suggests that the number and variety of [ethics] initiatives launched over time made it difficult for people to see how they connected as a coherent whole or to understand the principles that unified them.”

‘Insular’ leadership

Partners were also critical of the former leadership team as “insular” and which “actively discouraged challenge”.
“We heard recurring accounts of a reluctance to share or receive unwelcome information,” Principia reported. “The evidence supports concern about the quality and independence of challenge within the former senior leadership environment, but not that NEC [national executive committee] members never disagreed or challenged one another.”
Principia also found that KPMG partners and staff felt the firm’s previous leadership “took actions that were increasingly misaligned with the firm’s stated ethical and cultural aspirations and purpose”.
“This gap between what the firm said and what it did shifted behavioural incentives and created a strong signal as to what is expected and valued,” the report stated.
This problem was compounded by “weaknesses in governance and oversight that limited the firm’s ability to identify, challenge and correct misconduct by leaders” and the “high degree of variability in experienced culture across the firm”.
While highly critical of the firm, Principia also complimented aspects of the firm’s culture. The report noted “the great majority of KPMG people are committed to acting with ethics and integrity” and that “KPMG people consistently express[ed] a desire to do the right thing, and to work in a firm that values and supports ethical integrity”.
Principia was first brought in to complete a similar cultural review at KPMG Australia in 2021, after a scandal involving auditors cheating on internal tests.
Find out the inside scoop about Accenture, Deloitte, EY, KPMG, PwC and McKinsey. Sign up to our weekly Professional Life newsletter.
 leads our coverage of the professional services sector. He is based in our Sydney newsroom. Email Edmund at edmundtadros@afr.com.au

  • Deloitte Cyprus and its spin-off Meritservus falsified at least 1,000 corporate papers on behalf of Roman Abramovich

  • Deloitte staff used fake timestamps to rewrite the historical record before the firm acted as “independent auditor” to sign off the accounts

  • The scheme helped Abramovich hide billions of dollars in assets and evade millions in tax



The Albanese government has been warned that a potential surge of people paying the Australian Taxation Office by credit card without incurring a fee and earning reward points could blow out the cost of a reprieve from a proposed ban on the payment method.
The ATO is trying to negotiate lower fees with credit card companies and the Reserve Bank of Australia for continuing to accept tax bill payments by credit card until June 30 next year after Treasury said it would subsidise a seven-month delay to a ban it had initially proposed from December.
Assistant Treasurer Daniel Mulino. Alex Ellinghausen
Assistant Treasurer Daniel Mulino said the negotiations with card providers were trying to reduce the cost for the ATO, which has warned it faces a $200 million annual cost for absorbing the cost of the RBA’s new prohibitions on surcharges.
The government said on Friday it would grant the ATO extra funding if it pushed back its plan to ban credit cards from December 1 until the end of June 2027, following a fierce small business backlash over cash-flow risks.
“The [budget] costs are partly dependent on ongoing negotiations between the ATO and the credit card companies; those conversations will hopefully yield benefits for the taxpayer,” Mulino said on Monday.

Previously, the ATO charged taxpayers between 0.9 per cent and 1.5 per cent to pay monthly, quarterly and annual PAYG and GST bills by credit cards, including Visa, Mastercard and American Express.

The ATO estimates that only 2 per cent of individuals and 5 per cent of small businesses have been paying their tax bills by credit card.
Industry participants in the payment system warned on Monday that because taxpayers will no longer have to pay a surcharge on their credit card bill and this has received widespread publicity, many more taxpayers could opt to pay via credit card for the next nine months.
“Without these surcharges all these small businesses are able to pay their taxes on credit card and essentially only pay the Tax Office 99 cents on the dollar,” said an observer close to the issue, who spoke on the condition of anonymity.
“If you suddenly take away surcharging, that number could be a lot more.”
The incentive to collect credit card reward points, pay no surcharge and benefit from an interest-free period could be too good to ignore.
“If you’re someone who likes collecting points, paying the surcharge previously may not have been worth it for points,” the source said.
“But now the points become completely free, plus you get between 15 and 45 days interest-free, then that is a no-brainer. Everyone should want to pay their tax via credit card.”
Paying tax bills via credit card usually only made financial sense for small businesses if they pay off the credit card bill within the interest-free period, otherwise they face interest rates of 20 per cent to 25 per cent.
Tax commissioner Rod Heferen said last week the ATO had tried to negotiate lower fees for the ATO with credit card providers, before announcing the ban on card payments.
“Unfortunately, the credit card providers were unable to offer sufficiently low fees to enable the ATO to continue to accept credit cards,” Heferen said in a letter responding to shadow treasurer Tim Wilson.
Mulino’s comments on Monday suggested those efforts were ongoing.
The ATO is also in talks with the RBA about trying to lower the fees it pays to banks and credit card companies.
Large merchants such as Coles and Woolworths do not impose a surcharge and have used their size to negotiate discounted interchange fees with banks and credit card companies of about 0.2 per cent to 0.3 per cent of the transaction value.
These deals are known as strategic merchant agreements and were far cheaper than the up to 0.8 per cent small business merchants paid for interchange fees.
In its reforms accompanying the surcharge ban, the RBA reduced the cap on the interchange fee from 0.80 per cent to 0.30 per cent for consumer cards but did not impose caps on scheme fees, although it did seek more transparency around them.
Payments by a merchant or government department comprise three fees: a “scheme fee” imposed by Visa or Mastercard, the “interchange fee” which goes to the card issuing bank and the fee to the payment service provider such as Square or Tyro.
Furthermore, for corporate credit cards, the RBA maintained the 0.8 per cent interchange fee cap. The additional revenue banks can earn from issuing corporate cards allows them to fund generous points offers for business customers.
Minister for Regional Development Kristy McBain said the RBA took the right step in banning credit card surcharges for consumers that were costing consumers $1.6 billion a year.
“But they needed to take the next step, and that was to ban the on-charging to small businesses of these point-of-sale terminals,” she said.
Banks should foot the bill, she said.
“I mean, businesses are already paying a range of account-keeping fees and fees to banks, which are making billions of dollars in profit. They shouldn’t be charging for these point-of-sale machines, which is what the banks have told them they want to institute now.
“I think the banks need to take a good hard look at themselves here and make sure that they’re not passing those costs on to consumers.”
A Visa spokeswoman said: “We look forward to further discussions with the ATO to facilitate the ongoing usage of credit cards by small businesses for the payment of tax obligations.”
Mastercard was also contacted for comment.

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 is The Australian Financial Review’s economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the AFR in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.

 


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