Senate accuses PwC of contempt over handling of tax scandal inquiry

A Senate report has savaged PwC over its handling of calls to divulge how many staff were aware of the firm’s use of confidential information to shape client tax strategies.

The Senate has accused PwC Australia of contempt in its handling of an attempt to provide a list of 63 partners and staff to an inquiry investigating the firm’s use of confidential tax briefings to sell tax minimisation strategies to clients.

An interim report handed down in parliament on Wednesday has savaged the professional services giant over its handling of the Senate’s calls to divulge how many staff in PwC were aware of the firm’s use of confidential information to shape tax strategies for clients.

The inquiry into management and assurance of integrity by consulting services found PwC was not properly engaging with its attempt to grasp the extent of the confidential tax scandal and accused the firm of placing the Senate in an “invidious position”.

“PwC has given every appearance of attempting to minimise the seriousness of the issue, hoping that standing down its CEO, (Tom) Seymour, and announcing the Switkowski review of PwC Australia’s culture, governance, and accountability would suffice to assuage public concern,” the report notes.

“This leaves a further question unanswered: is PwC’s internal culture so poor that its senior leadership does not recognise right from wrong, and lacks the capacity to act in an honest, open, and straightforward manner?”

The report comes after weeks of bruising hearings that have exposed PwC’s links in Canberra and raised questions about other instances of the firm’s use of confidential information.

In the report tabled on Wednesday, the Senate recommended the firm “co-operate fully and openly with all investigations and inquiries” into PwC and its former head of international tax Peter Collins’ use and sharing of confidential tax briefings. “The committee recommends that PwC be open and honest with the Australian parliament and people, and with the international community, by promptly publishing accurate and detailed information about the involvement of PwC partners and personnel (including names and positions) in the matters canvassed in this report,” the report says.

Senator Richard Colbeck. Picture: NCA NewsWire / Martin Ollman

The Senate has baulked at publishing a list of 63 names handed to it by PwC last week, with the inquiry even noting the firm warned against revealing the identities of staff and partners.

The report notes PwC told the inquiry to keep the names of staff and a company handed confidential information under wraps, noting “not all personnel who received information will have been involved in wrongdoing”.

“PwC also advised the committee that PwC has not to date formed a view that the 63 persons identified in its answer to the committee were involved in a breach of confidence, except for four persons who PwC did identify,” the report states.

PwC has revealed the names of four partners who it claims were involved in the breach. It also has stood down a further nine partners from the firms it claims may have had an involvement.

A PwC spokesman said the firm thanked the Senate “for its important work”.

“We acknowledge today’s interim report. We will carefully consider its contents and await the government’s response,” he said. “We have taken swift steps to improve the governance, culture and accountability within the firm, and we will not hesitate to take all appropriate actions necessary to re-earn the trust of our stakeholders.”

As revealed in The Australian, PwC has been calling staff and partners into meetings with external lawyers as its seeks to establish the degree to which some were involved in the tax leaks. The firm has assembled a colour-coded list of staff as part of these efforts, however these were not included on the list provided to parliament.

Liberal senator Richard Colbeck said the Senate was being careful not to prejudice the Australian Federal Police and Tax Practitioners Board investigations into the matter.

But Senator Colbeck said the scandal was not limited to Australia and merited wider attention, noting documents showed a British and US connection.

“PwC global shouldn’t be able to cauterise their involvement by trying to make out this is a local issue,” he said. “It’s time they told the international community what was going on.”

Labor senator Deb O’Neill said the inquiry had been an “unbelievably painful” exercise in “the extraction of teeth” from PwC.