PwC global snubs Australian Parliament over tax leak investigation

PricewaterhouseCoopers continues to treat the Australian Parliament with contempt, with the latest development seeing its international boss refuse to hand over a report requested of him by a powerful Senate committee.

PwC’s global chairman Bob Moritz will not comply with the Senate’s request for the company to table a copy of the findings of a high-level investigation into how PwC massively betrayed the government by leaking confidential Treasury information for its own commercial gain.

Citing legal professional privilege, the firm’s international headquarters hasn’t even shared the report with PwC Australia.

Law firm Linklaters undertook the inquiry and while it was hoped the investigation would be independent, PwC will not provide a copy of the report.

Last year it issued a statement from London vaguely outlining some of the investigation’s findings.

“Linklaters have now concluded their review and found no evidence that any PwC personnel outside of Australia used confidential information from PwC Australia for commercial gain,” the statement said.

“With respect to those PwC people who did receive confidential information from PwC Australia, most did not know the information was confidential.

“However, the review found that six individuals should have raised questions as to whether the information was confidential. To the extent that they are still with PwC, their firms have taken appropriate action.

“As PwC said previously, in relation to the breach of confidentiality, our clients were not involved in any wrongdoing and the confidentiality breaches did not result in any clients paying less tax.”

Mr Moritz added to the September statement his own condemnation of the breach of trust incident.

“The unauthorised sharing of confidential information and related leadership failings are completely unacceptable and go against PwC’s culture and values,” he said.

“At the same time, I want to acknowledge the important steps that PwC Australia has taken to date as well as the actions outlined in their management response, which clearly demonstrate a commitment to change.

“The situation that arose in PwC Australia is a reminder to the PwC Network that maintaining a culture of quality and integrity is a continuous process that requires focus, effort and dedication. There are always lessons to be learned and things that we can do to improve as a network.”

But that’s as far as Mr Moritz wants to take it and he has flatly refused to give the Senate a copy of the investigation.

Senators are not happy about it and will pursue further interrogation of the giant accountancy firm.

Sanctions could follow.

Labor’s Deborah O’Neill, who has been highly critical of PwC’s behaviour, described the refusal as “deeply disappointing” and suggested it was not the end of the matter.

“If the involvement by international partners in this scandal is minimal, then there would seem to be little justification for hiding behind legal privilege,” Senator O’Neill said.

“Australian partners of the firm have already paid a substantial penalty for their involvement in this issue. I see no reason why their international peers should be spared that scrutiny, just because we are told by PwC that there is nothing to see here.”

But PwC claims it has been cooperating with the Senate inquiry and other parliamentary investigations.

“While we note the desire for the Senate to have access to legal advice received by others in the PwC network, we are mindful of the basic legal right of legal professional privilege that operates in many jurisdictions including in Australia,” it said in its statement to the Senate inquiry.

“PwC has cooperated with regulators investigating these matters and produced materials in response to those investigations.”

In 2016, while a PwC partner advising the government on tax matters, Peter-John Collins allegedly revealed confidential Treasury information to executives throughout the consultancy firm and to its international clients, devising a scheme to help them avoid paying the very taxes he was helping to establish.

Mr Collins has since left the company and was deregistered by the Tax Practitioners Board, with the fallout also seeing the exit of other senior PWC officials, including its then chief executive officer Tom Seymour.

In May last year, Secretary to the Treasury Steven Kennedy referred the matter to the Australian Federal Police for investigation.

“PwC Australia’s former head of international tax, Mr Peter Collins, improperly used confidential Commonwealth information,” he said when announcing the referral.

“The emails that the Tax Practitioners Board tabled in Parliament on 2 May 2023 highlighted the significant extent of the unauthorised disclosure of confidential Commonwealth information and the wide range of individuals within PwC who were directly and indirectly privy to the confidential information.

“In light of these recent revelations and the seriousness of this misconduct, the Treasury has referred the matter to the Australian Federal Police to consider commencement of a criminal investigation.”