Nothing For Nothing: HP Pays Dearly For Ernst & Young Tax Testimony
Last September Senator Carl Levin’s Permanent Subcommittee on Investigations called auditor Ernst & Young to Washington DC to explain how its client HP moves profits offshore to avoid taxes. Beth Carr, the partner responsible for the tax-related services provided to audit client HP, testified on behalf of Ernst & Young. Ernst & Young’s testimony cost HP almost $2 million dollars, according to HP's latest proxy. All other fees included reimbursement of approximately $2.0 million in costs relating to responding to a request for EY information from, and EY providing testimony before, the U.S. Senate Permanent Subcommittee on Investigations relating to taxation of earnings generated outside of the United States as well as fees for advisory services relating to HP’s services business. The $2 million paid to Ernst & Young for showing up is shown as “Other” advisory fees, not audit-related or even tax services, in the proxy. For that much walking around money, I'm sure the firm, and Ms. Carr, are more than willing to sit through some grilling by Levin.