PwC won’t make Linklaters report public, saying it is confidential and privileged

The embattled accounting firm has provided more information around the secretive Linklaters report as it hits back at allegations of lack of co-operation.

PwC International chairman Bob Moritz has told the Senate that the firm won’t be providing the full contents of the Linklaters review into PwC Australia. Picture: Ore Huiying/Bloomberg

PwC International won’t publish the Linklater review in full or make it available to a Senate inquiry probing its Australian arm’s tax scandal, saying the contents are legally privileged and confidential to the firm.

The decision comes as the firm hits back at suggestions that it has been secretive by saying PwC International and member firms are entitled to engage in confidential and privileged communications with their lawyers, without suggestion that doing so is a failure to co-operate.

In correspondence to the Parliamentary Joint Committee overseeing a probe into consulting firms, PwC International global chair Bob Mortiz rejected the request to provide the Linklaters document.

But upon request from PwC Australia, PwC International has made public additional non-privileged information around the review and findings public about the leaking of confidential Treasury information on tax policy that were shared locally and overseas.

“The Australian firm and the global network holds the view that PwC International and its member firms are entitled to engage in confidential and privileged communications with their lawyers in a manner which is protected under applicable laws in those jurisdictions without any suggestion failing to do so is a failure to co-operate,” the PwC Australia’s co-operation with the Senate submission said.

PwC Australia CEO Kevin Burrowes has told the Senate inquiry into consulting services that the Linklaters review has been kept from him. Picture: Martin Ollman/NCA NewsWire

“PwC has acknowledged that PwC personnel outside of Australia were recipients of some emails that contained confidential information. Accordingly, as was appropriate, PwC International retained Linklaters to form an independent review of what happened.”

Labor Senator Deborah O’Neill, who has been probing PwC in parliament, said Mr Moritz missed an opportunity to show that PwC was dealing with the legacy of its behaviour in Australia.

“That will require a commitment to transparency and openness,” she said. “If the involvement by international partners in this scandal is minimal, then there would seem to be little justification for hiding legal privilege.”

“Mr Moritz’s denial does not mark the conclusion of this matter.”

In the interest of transparency, PwC Australia has said that the independent investigation by London-based law firm, Linklaters, had access to the same evidence held by both the Australian firm and local regulators.

The International Review focused on PwC member firms whose personnel were identified as potentially or did receive confidential information from personnel at PwC Australia. PwC has disclosed that the investigation spanned multiple jurisdictions and included forensic searches for documents.

PwC has maintained that while its six international members should have raised questions as to whether certain information received was confidential and while they may have fallen short of its standards about raising their hands in such a situation, it was not the same as having breached professional standards.

Further information about the Linklaters review into PwC Australia said that PwC’s BEPS project was not limited to Australia and included many worldwide consultations, which were public in nature.

“It is not surprising, therefore, that the receipt of OECD updates by tax professionals outside Australia, in and of itself, did not raise alarm among recipients or cause them to conclude a breach of confidentiality had occurred, absent any indications to the contrary,” documents show.

Tax Practitioners Board chairman Peter de Cure last month told the Senate inquiry that while he had not seen the Linklaters report, he had a good idea who the six partners identified in PwC’s summary of its findings were.

“I have a reasonable idea that they’re in New York and I think somewhere in California, but that’s an inference from what I’ve read,” he said.

“I’ve read the relevant emails. I didn’t read them for the purpose of trying to conclude who the Dirty Six are.”

Although the PwC noted the review determined that six individuals should have raised questions, none of them further shared the information outside PwC or used the information to obtain a commercial benefit.

“While the International Review confirmed that a number of PwC professionals outside Australia received confidential information, it found that most of the recipients did not know, nor should they have known, that the information was confidential.

“These findings are consistent with the findings of PwC Australia’s investigation as disclosed in its publicly available Statement of Facts.”

PwC Australia said it continued to co-operate with regulators and had not withheld from production the names of any individuals outside of Australia who received confidential Treasury information. This same evidence was shared with PwC International, it noted.

PwC Australia has come under mounting pressure since details of its tax scandal were made public last year. Picture: Gaye Gerard/NCA NewsWire

Greens Senator Barbara Pocock said the refusal by Moritz and PwC to release the report flies in the face of their claims to good governance and is a slap in the face to the Australian people who have paid through the nose for PwC contracts with government agencies for decades.

“Bob Moritz is behaving like Doctor No in the James Bond movies, coordinating a shadowy global network of power from an island hideout somewhere in the north Atlantic, accountable to no one and manipulating his puppets around the globe,” she told The Australian.

“PwC International is once again hiding behind legal privilege to avoid any light being shone on their attempts to thwart global efforts by the OECD to clamp down on multinational tax evasion. That’s what this is all about and the leaks by PwC Australia of secret Tax Office information is just a small part of a much bigger effort to help companies all over the world avoid paying their fair share of tax.”

The Linklaters review was kicked off by PwC, at the behest of Mr Moritz, after the firm’s international leadership grew concerned about the potential for the scandal to engulf its profitable business with some of the world’s biggest tech companies.

The full findings of the report have been kept secret from PwC Australia, with local chief executive Kevin Burrowes telling a Senate hearing that he had not seen a copy of the report despite his repeated requests.

PwC said it understood the importance of investigations underway and would continue to co-operate with all of its regulators in relation to these investigations.

Last week, PwC Australia announced that at least 329 staff will lose their jobs and a further 37 partners would leave the embattled accounting and advisory firm as part of a “simplified, efficient and centre-led” restructure.