Deb O’Neill: PwC tax scandal shows ‘threat to democracy’ from attempts to subvert our laws

Labor senator Deborah O’Neill says the scandal surrounding consulting giant PwC ­Australia reveals ‘spiderweb-like global networks’ working to defeat good governance.

Senator Deborah O'Neill at the Inquiry.

The scandal surrounding big four consulting giant PwC ­Australia reveals “spiderweb-like global networks” working to defeat good governance, with Labor senator Deborah O’Neill warning that governments face a huge challenge in taming the sector’s excesses.

Writing in The Australian, Senator O’Neill, who also chairs the parliamentary and joint committee on corporations and financial services, said revelations a senior member of PwC’s tax practice, Peter Collins, worked to subvert Australia’s tax laws shows the problems in the sector.

Ms O’Neill, who also sat on the finance and public administration Senate committee which also investigated the PwC scandal, said Mr Collins’s actions showed “big consulting firms weren’t always acting in our interests”.

Pointing to the 144-pages of internal PwC emails published by the Senate, Ms O’Neill said the “stench” of scandal surrounding the firm had only continued to “waft from PwC” amid continued turmoil and blowback after Mr Collins “enveloped his former partners, significantly damaging its brand, both symbolically and materially”.

“And for the sector, the revelations of the scale of conflict of interest concerns, the abuse of the public purse, the cheating scandals, the determination of professional associates and supposed gatekeeper associations to look away, to deny and to cover up the cultural and professional failures of the ‘rainmakers’, has been an important contribution to public awareness,” Senator O’Neill writes.

“For some it is shocking. For others, it is confirmation of suspicions held, and for others it is an outrage – that the rivers of public dollars flowing into these partnerships have been interrupted by annoying parliamentarians.”

Mr Collins engaged in years of private consulting with a working group discussing reforming Australia’s tax laws.

However, as revealed by the Tax Practitioners Board early last year, Mr Collins had also shared confidential information from these hearings with others in PwC both locally and abroad.

As revealed in The Australian, this allegedly included PwC International Washington National Tax Services partner Matthew Chen, who was alleged in recent court filings to have received confidential Australian government tax information in 2014 in part of a suite of emails detailing reform plans.

Mr Chen has not responded to requests for comment.

Senator O’Neill recently wrote to the US Public Company Accounting Oversight Board to consider the parliament’s report into the tax leaks scandal involving PwC Australia, pointing to the recent reporting concerning Mr Chen as a matter of concern.

Senator O’Neill said there was a “mighty battle yet to be won to ensure that the public good ­triumphs”.

She warns the Big Four firms can outlast elected governments, with CEOs often serving extended periods at the top well beyond elected representatives.

In the wake of the PwC scandal, the firm’s chief executive Tom Seymour was forced to leave the audit and consulting giant, alongside a suite of members of its board. Picture: MIGUEL MEDINA / AFP

“They have insidious spiderweb-like global networks that are more established and long-lived than multilateral public institutions,” Senator O’Neill said. “Add to that the wealth and job security they have, the access to power and capital, the incentive to be the servants of every multinational company that doesn’t want to pay taxes in any jurisdiction, and you have a culture of self-interest in ascendancy over the old-fashioned notions of professional service to the common good.”

In the wake of the PwC scandal, the firm’s chief executive Tom Seymour was forced to leave the audit and consulting giant, alongside a suite of members of its board.

Former CEO Luke Sayers, who presided over the firm during the years Mr Collins was sharing information with others, denies any knowledge of the confidentiality breaches.

However, parliament has heard on several occasions evidence that senior members of the Australian Taxation Office attempted to raise concerns with Mr Sayers.

The Labor senator notes not all in the firms have done wrong, saying many staff had reached out to her to express their “despair at what has been going on”.

“But they know all too well that the challenge is huge, and they know that what were once quietly held concerns among ordinary Australians have been awakened,” she said.