2 April 2024

Senators condemn PwC for continuing to cover up its behaviour

| Chris Johnson
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PwC building in Barton

The second interim Senate committee report into PwC is scathing. Photo: David Murtagh.

The Senate committee scrutinising consulting giant PwC’s outrageous breach of trust has told the nation what everyone already suspected anyway – that the company is trying to cover up just how extensive the leak of confidential tax information was.

In its second interim report into the scandal, the Senate Standing Committee on Finance and Public Administration says PwC was rife with leadership failures that allowed a partner to illegally spread information to the firm and its clients about how to avoid paying taxes he was helping Treasury to establish.

The scathing report clearly accuses PwC of being less than forthcoming in what it has told the parliamentary inquiry.

The firm denies withholding information about its international partners, but the cross-party Senate committee says otherwise.

The report’s title, The Cover-Up Worsens the Crime, leaves little doubt about the conclusions senators have drawn about PwC’s behaviour.

“Beyond superficial commitments to change, the committee has seen nothing of real substance yet,” committee chair, Liberal Senator Richard Colbeck, states in the report.

“PwC have still made no genuine effort to fully investigate and address the issues.

“Rather, their ongoing approach appears to be to hide behind legal professional privilege and hope it will all go away.”

READ ALSO PwC global snubs Australian Parliament over tax leak investigation

In its first interim report, released in June last year, senators recommended PwC be “completely honest and open” as the inquiry continued.

The latest interim report, tabled in the Senate right before the Easter long weekend began, insists the firm has failed to follow those recommendations.

“The committee does not see how PwC can recover its reputation while it continues to cover up because the two are incompatible. Indeed, the cover-up worsens the crime,” it states.

Committee member Labor Senator Deborah O’Neill has been highly critical of PwC and issued a statement on the release of the interim report expressing her “disappointment” that so much remained unknown about the firm’s misconduct because of its behaviour.

“The report highlights both the immense failures of leadership, professionalism and ethics which enabled the tax leaks scandal to occur in the first place and the gross failures of professional accountability which saw it go unacknowledged and unpunished for so long,” Senator O’Neill said.

“There is no question that PwC has engaged in misconduct by creating and sharing a product that was expressly designed to deny Australians taxation revenue which they were fairly owed.

“The reputational and financial damage that the firm has deservedly suffered as a consequence of their misconduct is not easily erased despite the firm’s attempts to cauterise its Australian operations from its global network.”

READ ALSO Senate delivers Labor an ‘almighty backfire’ over its deportation bill

After it was caught red-handed leaking highly confidential Treasury information from a project on which it was advising the Federal Government, PwC sold off its state and federal government advisory business to Allegro Funds for $1, which in turn created a new firm called Scyne Advisory.

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

Mr Collins has since left the company and was deregistered in 2022 by the Tax Practitioners Board. The fallout also resulted in other senior PWC officials, including its then-chief executive officer, Tom Seymour, falling on their swords.

In May last year, Treasury Secretary Steven Kennedy, on orders from Treasurer Jim Chalmers, referred the matter to the AFP for investigation.

“PwC Australia’s former head of international tax, Mr Peter Collins, improperly used confidential Commonwealth information,” Mr Kennedy’s May statement said at the time of referral.

Original Article published by Chris Johnson on Riotact.

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