Cutting Through The Tax Glass Ceiling With Maureen Pechacek

By Doug Sheppard, Tax Notes State commentary editor

They say accountants are boring. But when Maureen Pechacek retired from PwC LLP on June 30, her 39-year legacy included helping build a prominent state and local tax practice for a major accounting firm, speaking at numerous tax conferences, launching an annual PwC women’s SALT partner/managing director meeting, and serving on boards for the Committee (now Council) On State Taxation, the New York University Institute on State and Local Taxation, and the Paul J. Hartman SALT Forum.

She even successfully sued a country club for discrimination in a high-profile case.

She’s widely acknowledged as a pioneer for women in SALT, and on her last day at PwC, her colleagues weren’t about to let Pechacek go without recognition. Even these quarantined, socially distanced times couldn’t stop them, as they produced a book summarizing her accomplishments and celebrated her career in a Zoom meeting in which many acknowledged the impact she had on their lives and careers. Not one to lose her steely, tenacious exterior easily, Pechacek was moved to tears.

“That was definitely a day I cried my eyes out,” she recalled. “What was really special is that my team put together this book — and it’s many, many pages — with my history, my career, my milestones, and all these letters from people I impacted. It’s just about how much of difference I made in lives of others. I can’t even tell you how amazing it is.”

The meeting was perhaps a fitting tribute to a career that no one — not even Pechacek herself — had anticipated, particularly given her background and outgoing personality. The contrast between the dryness of accounting and Pechacek’s relentless extroversion hasn’t been lost on her husband of 27 years, Maynard Howe, a PhD in clinical psychology who once asked his wife: “How can somebody like you, who’s so extroverted, be an accountant?”

“Do you know how much an accountant with a personality can make?” Pechacek responded with a chuckle.

From Farm to Boardroom Table

The sixth of eight children, Pechacek was born and raised in Ellsworth, Wisconsin, a small village roughly one hour from Minneapolis-St. Paul that’s best known for its Cheese Curd Festival.

The Pechacek family farm produced no dairy — just hogs, beef cattle, corn, crops, and hay — but it did instill a work ethic that’s carried through to her career.

“Obviously, on that farm we learned to work very hard,” Pechacek said. “We didn’t have much.”

Undoubtedly, Pechacek picked up her parents’ hardworking habits. Her father Donald, a World War II ranger who’d climbed the cliffs at Normandy on D-Day, worked as a mail carrier in addition to farming. He’d met his wife Elizabeth (Peggy) while training for that D-Day mission in Wales, prompting her to emigrate to the United States.

Work was so ingrained in Pechacek’s psyche that she even enjoyed the otherwise routine jobs she did as a teen, including waitress at the Hilltop, corn saleswoman, and SuperAmerica clerk.

But when she landed her first job out of high school as a secretary at First Trust Co. of St. Paul in 1978, something she’d been trained to do via her coursework, that all changed.

“I had no work to do and was extremely bored working for my boss, who was an accountant,” Pechacek said. “And I remember sitting there waiting for the 11 a.m. break to watch The Young and the Restless for 15 minutes.”

One of the youngest and certainly most restless of all, however, was Pechacek herself. “This can’t be the rest of my life,” she said at the time.

College, which hadn’t entered her mind up to that point, suddenly became the objective. Recalling how she excelled in her bookkeeping class in high school, Pechacek plotted her next move.

“I decided to go to college two weeks before it started, so I went to the University of Wisconsin-River Falls, which is near Ellsworth. I talked to them about allowing me to go based on my grades,” she said. “As long as I had good grades, I could get into college — even though I never took an SAT — and they allowed me to do that.”

The admissions office must have been pleased with that choice, as Pechacek relentlessly pursued her studies, attended summer school, and earned her bachelor of science in accounting degree in just three years by 1981.

While enrolled in college, she also interned at KMG Main Hurdman, which just happened to be where she landed her first post-college job as well.

Ascent to the Top

In 1981 the Minnesota Twins were on the verge of erasing a decade of irrelevance by building a team that would win the World Series in 1987 and 1991. Hüsker Dü, the Replacements, and Prince were about to give the Minneapolis music scene its highest profile and prestige since the Trashmen, the Castaways, and Crow had national hits in the 1960s. And in SALT, Maureen Pechacek was about to use a precision glass cutter on every ceiling above her over the next four decades.

Before Pechacek was hired, KMG Main Hurdman required two years in audit before a transfer to the tax practice for those without a master’s in tax. But in a move that would typify her groundbreaking career, the policy was changed just in time for her hiring.

Earning the respect of a manager, attorney Jerry Halbach, led Pechacek to follow him to the tax department at 3M by 1983. She was also enrolled in the master of business taxation (MBT) program at the University of Minnesota’s Carlson School of Management.

As a tax consultant for a 3M subsidiary, Pechacek handled state, federal, and international taxes. Because the individuals representing the various subsidiaries could be arguing for different state tax positions and “unknowingly hurting each other,” according to Pechacek, 3M elected to specialize with a state and local tax group in 1984.

“We determined that having one person handling all state tax issues and knowing what’s better for the overall corporate situation, would be more effective than focusing on each individual company,” she said.

It was at this time that Pechacek also became involved with COST, which is also how she met Paul Frankel, with whom she would share stages at tax forums for the next three decades. “He’s really the guy who got me to fall in love with state taxes,” she said.

After finding her niche in state and local taxes at 3M, Pechacek was one of a select few chosen in 1987 to do a 10-year rotation: two years in internal audit, two years in general accounting, two years in controllers, two years in treasury, and two years in tax.

Pechacek was honored, but also didn’t want to abandon the field in which she was pursuing her master’s (which she earned in 1988) — prompting her to look for opportunities elsewhere.

Word of Pechacek’s search reached Ron Fulks of Arthur Andersen LLP, with whom she’d been very involved in a federal tax deduction case that 3M was pursuing in North Dakota. Pechacek had met Fulks (then in the oil industry) through her extensive interactions (including testimony) with the North Dakota Legislature.

In turn, Fulks contacted Jack Jasper, head of tax for Arthur Andersen’s Minneapolis office, to recommend they pursue hiring her. Jasper, who met with Pechacek while doing work with 3M, agreed.

Eventually, Pechacek had to choose between Arthur Andersen and Price Waterhouse. The latter firm wanted her to move to Houston, so Arthur Andersen won out. Again, Pechacek set a precedent.

“I was the first person ever hired at Arthur Andersen in the Minneapolis office that didn’t start at the firm directly out of college. I came in as a manager,” she said.

The Arthur Andersen Years

Coming in as a manager at Arthur Andersen was the good news. The bad news — or at least the challenge — was that the firm’s SALT practice was very small and there was nothing to do.

Following up on leads she’d discovered during her tenure at 3M, Pechacek began seeking clients and giving them a pitch: “I don’t have any work to do, but I really can work hard. If you give me your tax returns, I’ll look at them, and you only have to pay me if I find you money.”

“I did almost all my work on a contingency-fee basis,” Pechacek said. “Several large companies allowed me to look at their returns, and I learned so much, got my confidence up, found numerous controversial issues, negotiated several deals, and obtained significant refunds and/or audit reductions for the companies. So many of the rules are gray and there was so much opportunity to be found. As a result, I was able to build a team of some 20 people in Minneapolis in 1990. We were the largest SALT practice in Minneapolis at that time and we dominated the marketplace.”

Pechacek also noted that Arthur Andersen branches in other cities were not doing what the Minneapolis office was doing, so she helped launch a national practice. In turn, this practice sold clients its STAR (State Tax Analysis and Review) package, in which it would examine a company’s state tax situation, and — in Pechacek’s words — “look for refunds and restructuring opportunities.”

“I built that practice nationally, but the goal of that was different,” she said. “It wasn’t a separate practice; we were supposed to help the local offices get into the clients, and then team with the local offices to do the work.”

Pechacek’s growing reputation as a speaker didn’t hurt her firm’s development, either.

Crediting Frankel with “really help[ing] me get a lot of exposure when I was very young,” she regularly spoke about current developments on tax panels with him — including many for the Tax Executives Institute. In turn, preparing for the speeches enhanced her knowledge, a boon to her practice.

“I had an ability to speak, and people could understand what I was saying, and I could make tax interesting — because I think it’s really interesting; I love it,” Pechacek said. “And I love the fact that it changes all the time. So one of the ways that I was able to keep up on all 50 states — not that I knew everything, but I kept up on what was happening nationally — is because I spoke so often.”

By 1992 Pechacek attained her goal of becoming the first woman partner in the Minneapolis office, not to mention the first woman SALT partner at Arthur Andersen.

But that was only part of the objective: She wanted to help other women attain partner status as well. As Arthur Andersen’s SALT practice grew, so did the number of women in the department.

Pechacek was particularly gratified when her friend Susan Haffield — who started working for Pechacek at the firm in 1988, left for Cargill in 1992, then returned in 1996 — made partner in 1999.

“My proudest moment was the day she made partner,” Pechacek said.

By 2002 Arthur Andersen had “more woman SALT partners than anybody by a lot,” according to Pechacek. Unfortunately, that wasn’t the only thing the firm had that year.

Out of the Frying Pan Into the Waterhouse

Arthur Andersen was on the ropes after becoming embroiled in the widely publicized Enron scandal in 2001 and, by 2002, the writing was on the wall: The firm was doomed.

For Pechacek, the months leading up to its demise in August 2002 were like the part in every James Bond movie when the evil mastermind’s fortified hideout collapses into ruins amid gunfire and explosions over a lively yet dramatic orchestrated soundtrack.

But this was no movie, and Pechacek looked on in disbelief as the practice she’d spent 15 years building, the one that grew from 13 people firmwide when she was hired to 900 by the time she left, dissipated.

“When Arthur Andersen was falling apart, I honestly didn’t believe it was going to fail,” Pechacek said. “I was going to go down with the ship, because I truly did not believe that the ship was going down.

“At the end of the day,” she added, “I was devastated. I loved Arthur Andersen, and anybody who worked there loved it.”

Pechacek, who’d turned down offers to leave Arthur Andersen for years, was now back on the market. After weighing several offers, she landed at PricewaterhouseCoopers LLP (now PwC), taking quite a few ex-Andersens with her.

“Over 130 people came with me to PricewaterhouseCoopers, so whatever firm I was going to go with, a big chunk of the SALT practice from Arthur Andersen was going to go,” she said. “So it was an extremely big decision which firm I went to.”

Fortunately for Pechacek, clients also followed her: “If you really care about doing a great job for your clients, they feel it and they know it, and they’ll stand by you. And when Arthur Andersen fell apart, every one of my clients came with me except one — and that was because they were a PricewaterhouseCoopers audit client, and they had a Sarbanes moratorium that did not allow their auditing firm to do tax work.”

Pechacek’s tireless advocacy for women also continued, but this time it extended beyond the tax world. Fairbanks Ranch Country Club of San Diego, of which she was a member, built a new clubhouse area in 2002 — declaring that it was a men’s grill that women couldn’t enter.

An appalled Pechacek, who had already pushed back against the Saturday morning prohibition on female golfers at a Minnesota club, immediately spoke up to the club’s management. When that didn’t work, she took it to court — leading to an eventual settlement in 2007 that opened up the grill to women.

The story made local and national headlines.

“That’s something I’m very, very proud I did — even though it got very controversial,” Pechacek said. “The one place where discrimination is still rampant is in the golf world, and I hope that this continues to change over time.”

Advocacy for Women

Until she joined PwC, Pechacek tended to shun women’s-only events at accounting firms — believing that individual advocacy was far more effective.

But a two-day women’s leadership event in Dallas that her firm held for its tax partners and directors around 2006 changed all that.

“It was something that just opened my eyes — and I knew I should have realized it,” Pechacek said. “We were going through the different characteristics between women and men. And what I really learned, and this isn’t necessarily a positive, is that I think and act in business more like a man, more than I do a woman. I believe that a lot of the women who made partner early on had similar characteristics.”

As the differences between the sexes were outlined — “how women don’t take credit for what they do, how women don’t like to brag about themselves, how you have to tell women how great they are” — it suddenly hit Pechacek.

“I was thinking about it: I have told so many women how great they are, and so many of them how much they had the potential to make partner — and I never had to tell any guy that in my whole career,” she said. “And it just made me realize: Yeah, we need to really be outspoken advocates for women in the business and help more women succeed.”

With those realizations in mind, Pechacek helped organize PwC’s annual women’s SALT partner/managing director meeting in 2008, which the firm has continued for the last several years.

“PwC has provided tremendous support for the event, and our group really worked hard to increase the number of our female SALT partners. I am very proud to say that our numbers are significantly higher,” she said. “We now have a number of women SALT partners, and in fact, last year we had nine SALT partners made — and five were women. It’s the first time ever that there was a majority of women partners made, so that was really apropos for the year of my retirement.”

At the time of the first women’s SALT partner/managing director meeting, Pechacek asked the existing group to do short video clips about themselves and outline how they became partners or managing directors.

The video “described what our paths to partnership or managing director were, so women could see that there’s no set standard,” Pechacek said. “We also learned that if you have a woman partner in your office, you had more women partners in the pipeline. But if you didn’t have a woman partner, it was really hard to get that first woman partner admitted. The situation has changed, as we have several women partners in the firm. But back then, getting that first partner admitted was really important.”

Citing a 2000 Harvard study that found that blind auditions had increased the number of women in orchestras from roughly 10 percent in 1970 to 35 percent in the mid-’90s, Pechacek has set that number as a goal for female SALT partners.

“I was always an advocate for women, and I said: ‘We need women’s events until we have 35 percent women partners,’” she said.

Colleagues certainly noticed the impact of Pechacek’s efforts to reach that goal.

“To use a 2020 metaphor, Maureen’s passion for state taxes was ‘infectious’ to all those around her,” Haffield said. “This passion, her work ethic, and determination made her a role model for so many in our profession, and her legacy will continue on in all those she mentored.”

Kendall L. Houghton of Alston & Bird LLP, who first met Pechacek while with COST in 1993, likewise described her as “a role model to women in the state tax profession.”

“In the subsequent years — decades! — I watched Maureen build and lead a robust state tax consulting practice, serve on numerous professional advisory and conference boards, deliver advice to clients (for which we collaborated) in a fashion that earned her their complete trust, and advise younger tax professionals on how to develop their own careers,” Houghton said. “The fact that she is an energetic and unfailingly upbeat individual is the icing on the cake.”

Pechacek’s efforts have also been recognized in several industry honors, such as the NYU Outstanding Achievement in State and Local Taxation, COST’s Paul H. Frankel Excellence in State Taxation Award, and induction into the University of Minnesota MBT Hall of Fame.

The Evolution of SALT Practice

The increased presence of women in SALT practices isn’t the only change that Pechacek has noticed over the past 40 years. She’s also seen SALT itself evolve from a small niche in the 1980s to the booming field it is today.

“I do think there is a sea change in how companies approach state taxes these days, where it seems to me like industry’s gone to less specialization,” she said. “It used to be state, international, and federal — and now it’s more compliance controversy and consulting. Also, everything’s about technology now, so that’s the next frontier for everybody.”

The most significant change that Pechacek has witnessed, however, is the emergence of specialists — which were unheard of at accounting firms when she started.

“I think the big evolution is that companies used to have deep specialists, and now they’re going to all be in public accounting or the law firms, because there’s just so much outsourcing of everything — even outsourcing to India,” Pechacek said. “I think you’re going to see the specialists be in public accounting and the generalists be in industry. And when I started, it was exactly the opposite: The specialists were in industry and the generalists were in public accounting.

“And I don’t see that changing. I see the specialists staying in public accounting, but one of the things that I do see is: How do you create the people to be qualified for VPs of tax? There are a lot of VP of tax positions, and if you’ve done one thing in your career like state and local or international, how do you become a VP? So people want people to move around more to make sure people have a little bit broader experience to become the VPs in industry.”

Retirement

Since her last day, Pechacek and her spouse have settled into life in Las Vegas, where they’ve resided for the past two years.

While craps tables, slots, card games, or even the renowned Psycho Las Vegas festival (billed as “America’s Rock ’n’ Roll Bacchanal”) are unlikely to be in their future, hiking in nearby mountains and valleys, socializing, and community involvement are.

“If you ever would have told me 20 years ago that I’d be living in Vegas, I’d have thought you were crazy,” Pechacek said. “I think it’s this hidden gem of a retirement community that people don’t realize; they associate it with gambling.”

And while her days as a tax practitioner are over, Pechacek hopes to contribute to the business and local communities in some meaningful way. As an appreciation for the education she received that contributed to her success, Pechacek gave back to the universities she attended.

She not only contributed and raised significant funds for an endowed scholarship in the name of Fred Jacobs, founder of the University of Minnesota’s MBT program, but also started an accounting scholarship in her name at the University of Wisconsin-River Falls for a rural farm student from Minnesota or Wisconsin.

“What I am interested in next is getting on some for-profit boards, and also continuing to be a mentor for those that I have worked with and helping them navigate through their careers,” she said. “I am staying in touch with a lot of people and will always have a passion for state taxes.”

The number of people who share that passion for the SALT field has certainly grown over the last 40 years.

“I do think people appreciate state and local tax more now than ever, and they realize the significant dollars that are at stake,” Pechacek concluded. “I think it’s going to get even bigger and bigger with all this federal tax reform. It was hard for me to retire in one way, because I believe it’s going to be so much fun — as there are so many great issues right now. But at the same time, I decided to leave those opportunities for the younger people.”