Accenture and the CCC Exchange Pointers in Cronyism

On Monday, April 4, 2011, the CCC Press informed us that “City Colleges of Chicago Teams with Accenture to Provide Students with the Skills They Need to Get a Job.” The press release, communicated through PR Newswire  (http://www.14wfie.com/story/14369250/update-city-colleges-of-chicago-teams-with-accenture-to-provide-students-with-the-skills-they-need-to-get-a-job), excitedly shared in stereotypical style, among several fantastic developments, the following:

The City Colleges of Chicago (CCC), the largest community college system in the state of Illinois and one of the largest in the nation has teamed with Accenture to offer a "Job Readiness Mentoring Program" designed to provide students with the skills they need to successfully enter the workforce.

"This program is an excellent experience for students," said Cheryl L. Hyman, Chancellor, City Colleges of Chicago.  "Our students are exposed to top professionals in corporate settings and are learning about the high expectations the business world has set for them."

and

The effort is part of Accenture's Skills to Succeed initiative, which plans to equip 250,000 people around the world by 2015 with the skills to get a job or build a business.

(Sound of jaw dropping.)

This is shameless. There seems to be no end to the web of cronyism that the CCC administration and Accenture have become entangled in. The CCC Reinvention site proudly proclaims how Accenture, a civically-minded partner, offers pro bono “services” for the crusade. Then a former Accenture Manager, Donald Laackman, becomes the new president of Harold Washington College. And now, Accenture gets the rights (and the contract not mentioned in the press release) to supposedly train our students in job skills. Not for a single moment believe that there is no quid pro quo here. As the press release states, this is part of Accenture’s worldwide Skills to Succeed initiative.

Accenture has a long, devious history, as we will see below. In fact, it is so controversial and rapacious that one has to wonder why would any honest person in government would be interested in doing business with them.

The following information about Accenture is a bit dated, from the early 2000s, but the sickening reach of Accenture’s shenanigans is carefully documented by the folks from British Columbia Citizens for Public Power. Below we reproduce extended excerpts from a fact sheet they put together. It can be found at http://www.citizensforpublicpower.ca/files/uploads/accenture.pdf. We are sure that since then Accenture has moved on to greater and more grotesque endeveaors.

PEARL

Who is Accenture?

Accenture is a multinational consulting company with its headquarters in Bermuda [since then it moved to Ireland], a popular tax haven for corporations. Accenture operates regional offices throughout the world and has embarked on an aggressive campaign to win government contracts for computer systems and customer services. Recently, they have also expanded into public utilities throughout North America.

Before 2000, Accenture was known as Andersen Consulting, the consulting arm of Arthur Andersen, the accounting firm implicated in the Enron scandal. In 2000, Andersen Consulting (then a Chicago-based partnership) undertook the largest re-branding initiative in corporate history. It renamed the company Accenture, went public as a corporation, and relocated their head office to Bermuda [then in 2009 to Ireland].  (Source: “Accenture and Monday employ three tax havens.” Glen Simpson, Wall Street Journal, July 3, 2002.)

Why would Accenture locate its head offices in Bermuda? It’s not for the weather. According to documents filed by Accenture in July 2001 to the Securities and Exchange Commission (SEC), taxes and legal advantages seem to be the priorities. According to Accenture’s own SEC documents:

“We are not subject to tax in Bermuda on our income or capital gains.”

“It may not be possible to enforce court judgements obtained in the United States against us in Bermuda or in other countries other than the United States where we have assets.”

“Shareholders of Bermuda companies do not generally have rights to take action against directors or officers of the company.” (Source: “Accenture: My holiday home in Bermuda.” Philippe Rose, Le Monde Informatique. ITworld.com. November 23, 2001 and Accenture SEC filings: http://biz.yahoo.com/e/l/a/can.html)

Accenture has a history of controversial deals.

Florida

Members of Florida’s Joint Legislative Auditing Committee have blasted a nine-year, $69 million deal to hire Accenture to provide a call centre and online licensing system for the Department of Business and Professional Regulation. State Auditor General Bill Monroe says that the deal will wind up costing the state $30 million more than the current system – an allegation Accenture denies, claiming that the state will save more $93 million. Republican Senators criticized the deal as “sloppy” and “pretty poor business practices.”  (Source: “Agency defends Accenture contract.” Nancy Cook Lauer, Tallahassee Democrat, January 29, 2002.)

Ontario

While Accenture considers the privatization of the Ontario welfare system a success, many critics, including the province’s Auditor General disagreed. At one point Accenture billed taxpayers $26,000 in unreceipted expenses and Accenture management was paid up to $575 an hour. In 2001, the Provincial Auditor reported that the cost ratio of having Accenture perform the work rather than public servants was 6 to 1 and that in 2000, while the Province saved $89 million (primarily from cutting welfare payments), they paid Accenture $193 million. (Sources: www.polarisinstitute.org, “Workfare Fiasco”, Toronto Star, September 28th, 1999; “Opposition accuses consulting firm of hosing taxpayers”, Wendy McCann, Canadian Press Newswire, December 9th, 1999; “Some Consulting Service Fees Higher, Ministry Confirms”, Theresa Boyle, Toronto Star, December 10th, 1999; “Welfare Critics Rip Expansion of Computer System”, Peter Van Harten, Hamilton Spectator, September 5th, 2001; “Welfare contract called $194 million boondoggle; Ont Says money being saved” Colin Perkel, Canadian Press Newswire, October 11, 2001; “MPPs slam provincial welfare deal”, Caroline Mallan, Toronto Star, October 12th, 2001; “Accent on Savings”, Ottawa Citizen Editorial, October 22, 2001; “Consultants Cost Province millions”, Richard Brennan and Katherine Harding, Toronto Star, December 1, 2001)

At one point, Accenture fitted social service workers with electronic tracking devices to record their every movement. Eventually, these were shelved under a storm of controversy. (Sources: www.polarisinstitute.org, “Big Brother is watching Ontario’s bureaucrats: Workers fitted with tracking devices”, Tom Blackwell, Montreal Gazette, March 30, 2000; “Mike Harris, not social workers, should be fitted with an electronic tracking device, opposition says”, Canadian Press Newswire, March 30, 2000)

Ohio

Up until 1998, the former welfare director of Ohio, Arnold Tompkins, awarded nearly $26 million in unbid contracts to Accenture/Andersen Consulting. After leaving public office, Tompkins was given a $10,000 a month job from Accenture. The contracts themselves were fraught with problems and eventually led to the reinstatement of original computer systems after too many complaints from workers and clients. The state was billed up to $450/hour per manager and one consultant was paid $123,000 for working 492 hours in a month (or 16 hours per day for 31 days.) (Sources: www.polarisinstitute.org, “State Agency’s Former Leader Accused of Wrongdoing” Columbus Dispatch, June 30, 2001; “State Probes $26 million no-bid deal”, Cleveland Plain Dealer, January 26, 2001; Ohio Works Problems Lead to Reinstatement of old job-matching, Dayton Daily News, March 12, 2001; “Tompkins’ Sweet Deal”, Cleveland Plain Dealer, November 13th, 2001; “Ex-Official Sentenced to Fix Computers”, Tim Doulin, The Columbus Dispatch, November 3rd, 2001; “Ex-State Official to be Sentenced November 2, Catherine Candisky, September 15th, 2001”; “Job & Family Services runs into still more computer problems”, Ted Wendling, Cleveland Plain Dealer, February 5th, 2002)

New York

A system to enable private and public agencies to track child abuse reports has been filled with problems. It is incomplete, was nearly 3 years overdue, and cost $362 million up to early 1999—3 times the original price tag. For example, Accenture/Andersen Consulting projected 5,448 billable days of working on the project, and it has grown to over 28,000, all at the expense of taxpayers. (Sources: www.polarisinstitute.org, “Foster Care Agencies Fault Statewide Computer System”, Somini Sengupta, New York Times, May 13, 2000;”“Computer Costs Soar, Study Says”, The Times Union (Albany, NY), March 11, 2001; “Experts offer a $54 million solution”, James M. Odato, March 17, 2001)

Texas

Accenture/Andersen Consulting billed the state $75 million, $63 million more than the original estimate to develop a system to track child support in Texas. (Sources: www.polarisinstitute.org, “Consulting Company has a track record of boosting billing,” Wendy McCann, Canadian Press Newswire, November 4, 1998)

Nebraska

Accenture/Andersen Consulting billed Nebraska $24 million over the original estimate to automate social services programs. The state auditor called the project “the most wasteful I have ever heard of. It’s like pouring money down a deep dark hole.” (www.polarisinstitute.org, “Consulting Company has a track record of boosting billing”, Wendy McCann, Canadian Press Newswire, November 4, 1998)