PwC Australia tax leaks should have been questioned overseas, report finds

PwC Australia’s controversial leaking of confidential information from Australian government tax briefings should have been questioned by six individuals across the Big Four accountancy firm’s global network, an independent report into the matter as found.

PwC’s Irish business was dragged earlier this year into the international fallout over the leaking, when it emerged that former PwC Australia tax partner Peter-John Collins, who was banned in January from practising as a tax agent after sharing secret information about the Australian government’s plans to clamp down on multinational tax avoidance, sought in 2015 to tap PwC Ireland’s contacts with technology companies in the United States to share his insights.

That was according to information contained in partially redacted internal PwC emails released in May by an Australian senate committee that was looking into the matter. Other emails were sent by Mr Collins to PwC network colleagues in Australia, the UK and the US in an effort to win business.

PwC Ireland has repeatedly declined to disclose the identity of the individual in its firm that received the email, or whether they received any confidential information on Australian tax plans.

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Months of outrage over the leaks have forced out 12 PwC Australia partners, including chief executive Tom Seymour, prompted public- and private-sector clients to freeze ties and entangled clients such as Google, Uber and Facebook.

An independent review of the PwC Australia, written by Ziggy Switkowski, a senior Australian business figure, and published on Wednesday, revealed a series of previously unreported leaks by various partners, many who remain unnamed, from government consultations on topics including the taxation of digital currencies and the “black economy”.

PwC’s Australian partners overlooked rule-breaking by “rainmaker” colleagues in the pursuit of revenue growth, according to a damning report on a scandal involving the misuse of government tax secrets. The partnership’s “overly collegial” culture made staff reluctant to call out misbehaviour, especially from big fee-earners who were described as “untouchables” to whom “the rules don’t always apply”, it found.

However, PwC said on Wednesday that a separate review by law firm Linklaters into the global PwC network – in which the Irish firm participated – concluded that there was “no evidence that personnel outside of Australia used confidential information from PwC Australia for commercial gain”.

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

The PwC Ireland spokeswoman declined to say whether any staff in the Irish firm received confidential information – or were among the six unnamed individuals globally.

PwC Australia promised on Wednesday to install an independent chair above the chief executive and agreed a series of other governance changes, hoping to help draw a line under a political scandal that has tarnished its reputation in the country and prompted multiple investigations across the firm’s global network.

PwC Australia conferred “excessive power” on the chief executive, according to the report from Mr Switkowski, a former chief executive of Telstra, the Australian telecoms group.

Mr Switkowski’s report said an “aggressive growth agenda overshadowed and occurred at the expense of the firm’s values and purpose”, adding that a focus on “whatever it takes” seems, at times, “to have contributed to integrity failures”.

In June PwC Australia sold its government consulting business for a nominal one Australian dollar (€0.60) to try to ringfence contracts from the scandal’s political fallout.

Australia’s government is also pursuing measures in response. Last week it proposed four pieces of legislation cracking down on corporate tax-avoidance schemes and expanding the powers of the regulator for tax professionals. – Additional reporting: the Financial Times