PwC’s UK, US operations caught up in tax scandal investigation

PwC’s US and UK operations have confirmed they will co-operate with an international investigation of the tax scandal engulfing the firm in Australia in the clearest signal yet that it has become a global problem for the consulting group.

The spread of the investigations at the embattled group comes after the firm last week appointed former NBN co-chairman Ziggy Switkowski to lead an independent review of PwC’s troubled Australian operations, with the power to recommend the firing of people involved, as former chief executive Tom Seymour announced his resignation from the firm.

The leak of a confidential government plan to combat corporate tax avoidance has created a global crisis for PwC. Artwork:Credit: Aresna Villanueva

Seymour led PwC’s tax operation when confidential information was widely shared within the firm and marketed to multinational clients following a confidentiality breach by PwC partner Peter Collins.

A document released by the Senate inquiry showed Collins repeatedly leaked confidential information with senior PwC staff about government plans to combat tax avoidance over three years, for PwC’s benefit. The information spearheaded a push for new business, including the Silicon Valley-based US tech giants and a group dubbed the “dirty 34”.

A spokesman for PwC global said an international law firm would lead the global investigation.

“As we continue to investigate the unacceptable sharing of confidential information by PwC Australia, we have appointed the international law firm Linklaters to form its own independent assessment of what happened across our network,” said the spokesman.

“They will have unrestricted access to what they need to enable them to investigate and to inform their recommendations for change.”

PwC UK confirmed over the weekend that it is taking part in the investigation, as did the US operation, which said it will “take appropriate action in the US as warranted.”

Partners from both of these operations will be exposed if a senate estimate hearing, and a separate senate inquiry, succeed in obtaining the names of the partners implicated in the scandal and the global companies they targeted. Three of the largest global corporations – Apple, Google and Microsoft – are believed to be among the targets.

The senate economics committee, through question put on notice by Senator Deborah O’Neill – released the damning 148-page document revealing the scale of the firm’s profiteering from leaking confidential government tax plans to potential clients – said PwC needs to come clean now and not wait for the results of its Australian investigation, which is due in September.

“I call on all those at PwC who understand the enormity of what has occurred, the scale of the moral and ethical failure now publicly documented, to demand that their current leadership team PwC Australia and PwC Global do the right thing by the Australian people. Name the names,” she said.

“Current PwC staff who want to distance themselves from the public documents and scandalous cultural practices need to press for the leadership to shift today. No more obfuscation and cover-up.”

Ahead of his resignation from the top job at PwC Australia, Seymour confirmed he had received the emails but denied he was aware the information was from a breach of confidentiality agreement by PwC partner Peter Collins.

Collins received a two-year professional ban from the Tax Practitioners Board earlier this year in response to his breach of the confidentiality agreement.

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