The ‘Departing Dozen’ walk the PwC plank

Call them the “Departing Dozen” – they are the partners that PwC’s investigation has implicated in having an involvement in the firm’s tax-leak affair or its cover-up.

They include the former chief executive, Tom Seymour; the ex-chairman; the chief risk officer; and the firm’s head of government. It’s quite a haul.

Four had been singled out a few weeks ago and a further eight followed on Monday.

An additional eight PwC partners have exited the firm.Credit: Martin Ollman

Had PwC taken this action six months ago, having weeded out the partners who used confidential government plans in order to help PwC clients sidestep Treasury moves against tax avoidance, the situation could have played out differently.

Had those with knowledge of former partner Peter Collins’ breach of confidentiality appropriately and promptly responded to the gravity of the failings, the scandal would likely not have snowballed.

The group of partners who are now walking the plank have been shown the door by the firm over their involvement in the breach or in its hamfisted cover-up. For PwC Australia, this was a sliding door moment. Be it due to poor judgment, hubris or a lack of ethical understanding, some of the firm’s management and senior partners took the wrong door.

Unfortunately for the lion’s share of PwC staff who are in no way implicated in this debacle, PwC’s attempts to draw a line under this scandal by kicking out eight partners won’t be enough. This situation has an inexorable momentum, even as the scalps start adding up.

Canberra is out for blood. Spearheaded by the Greens, the newly minted National Anti-Corruption Commission (NACC) has already received a referral to look into PwC in Australia. Regardless of whether this independent agency, established to investigate serious corrupt conduct in the public sector, decides to baptise itself with an investigation into PwC, the referral represents further pressure on the accounting firm.

Having earlier dropped a criminal investigation into PwC, the Australian Federal Police has re-ignited its probe (without identifying any individual targets) and the firm has appointed outsider Ziggy Switkowski to conduct its own examination of PwC’s conduct, culture and governance.

There were 63 professional staff inside PwC who were in receipt of confidential emails, so outing 12 could be merely a starting point. (This isn’t to suggest that all 63 were involved in the transgression. Many were just hapless recipients of a group email, did not act on the information or had no understanding of its import.)

Between now and when Switkowski is due to release his findings, events may overtake whatever the former Telstra chief executive finds out about who said what to whom. His report might stand as little more than a footnote in the history of the PwC saga.

Since his appointment, the global PwC mandarins have been parachuted in to troubleshoot – an attempt to cauterise damage from the Australian business lest it spread beyond the borders and into the global network.

Decisions from head office will be far more dispassionate.

The findings released by PwC on Monday were certainly brutal.

“The investigation identified a number of specific examples where professional standards were breached with respect to misuse of confidential information or other matters reviewed by the ATO. Furthermore, the investigation identified a failure of leadership and governance to adequately address the matters, either at the time or whilst the matters were under investigation by the Tax Practitioners Board or ATO. This enabled poor behaviours to persist with no accountability.”

Now PwC is just in damage control. It is attempting to save up to 2000 staff housed in its government consultancy division (which earned 20 per cent of the firm’s revenue), by selling this business to private equity player Allegro for the token price of $1.

But it will be difficult to remedy the damage wreaked to the unit by changing its name. Even if this transaction is completed, the new firm would have ongoing challenges.

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