Senator Deb O’Neill to write to US regulators over new names in PwC tax scandal allegations

A Labor senator will write to the US consulting sector regulator, alerting it to allegations a member of PwC International also allegedly received confidential Australian government tax plans.

Senator Deb O’Neill has said PwC must come clean on its international links to the misuse of confidential information. Britta Campion / The Australian

A Labor senator has said she will write to the regulator of the US’s consulting sector, pointing them to allegations a senior member of PwC International also allegedly received confidential Australian government tax plans.

In the wake of allegations by former PwC tax partner Paul McNab, who pointed the finger at PwC International Washington National Tax Services partner Matthew Chen alleging he was handed inside information about mooted “Google tax” plans in Australia, senator Deb O’Neill has said the firm must come clean on its international links to the misuse of confidential information.

Mr Chen, a near 26-year veteran of the audit and consulting firm, was named by Mr McNab in a court battle with PwC Australia, with the two sides facing off after Mr McNab was removed from the firm’s lucrative retirement scheme.

Mr McNab alleged Mr Chen was one of several PwC partners from the firm’s overseas arms who received allegedly confidential information from the now-disgraced former head of international tax, Peter Collins.

PwC International partner, Washington National Tax Services, Matthew Chen.

The former PwC partner claimed Mr Chen was on a February 2014 email from Mr Collins detailing “possible options for addressing the tax challenges raised by the digital economy” in response to the Base Erosion and Profit Shifting changes in play in Australia. This came as Australia was considering reforms to its tax laws, with Mr Collins consulting the government while also leaking key details of the plans to others in the firm.

PwC used this leaked information to shape tax strategies it sought to sell to clients as part of its Project North America, an attempt to win business with key US tech companies including Uber and Facebook owner Meta.

Mr Chen is a key figure in PwC’s tax business, describing himself as a specialist in international tax planning, cross-border corporate restructuring, and tax-­efficient intellectual property planning.

The alleged identification of Mr Chen marks the first time a member of PwC’s non-Australian operations allegedly connected to the tax leaks has been named.

Mr Chen did not respond to requests for comment.

Senator O’Neill said the allegations that Mr Chen received confidential information “indicates that PwC International have been shielding overseas partners from necessary accountability for their role in the tax leaks scandal”.

“It is concerning that a person who allegedly received, and ­potentially misused, confidential Australian government information has been allowed to continue operating in PwC’s tax practice in the years since,” she said.

Former PwC tax partner Paul McNab.

Documents released to a ­parliamentary inquiry revealed PwC America general counsel Diana Weiss warned the Australian division not to reveal any details of the tax scandal to regulators or legal authorities “until the network representative and I have reviewed and approved the materials”.

Senator O’Neill said she intended to write to the Public Company Accounting Oversight Board, the US’s regulator of large audit and consulting firms, regarding the latest allegations.

The PCAOB has already slapped PwC with a $600,000 fine over the tax scandal, imposing remedial measures on the firm, in response to its failures to report regulatory proceedings by the Tax Practitioners Board in Australia over the leaks.

PwC was found to have failed to properly monitor its compliance with quality control policies.

Greens senator Barbara Pocock said the alleged involvement of Mr Chen in receiving confidential information was concerning, noting PwC remained resistant to revealing further details on the tax scandal surrounding the firm.

Mr McNab also alleged in court documents that a number of other partners and staff at the firm received emails from Mr Collins in which the former tax partner may have shared allegedly confidential information.

This includes former partners Pete Calleja and Michael Bersten, who were given an update on the Google tax in July 2015, alongside international tax partner Nick Houseman.

Mr Calleja and Mr Bersten no longer work at PwC, but Mr Houseman remains with the firm.

A PwC spokeswoman said that the firm had “thoroughly reviewed” the tax scandal “with the outcome of that review detailed in our statement of facts”.

In court documents, Mr McNab also refers to emails in which PwC staff members including retired partner Lyndon James, alongside Nick Middleton, Robert Hines, Greg Weickhardt, Michael Bona, Michael Taylor and Stuart Landsberg all copied on emails allegedly detailing confidential information shared by Mr Collins.

Mr McNab claims, in his court documents, that if the information PwC claims he shared was confidential then it is possible these current and former PwC staff were also supplied information that “appears to have been confidential”.

The Australian does not allege any breach of the law, only that claims have been made by Mr McNab in court documents.

These allegations come after PwC handed over a trove of emails to Mr McNab as part of court processes.

PwC United States Global General Counsel New York Diana Weiss.

“We have to open up a newspaper to find out that court documents filed in the tit-for-tat lawsuits between PwC and former partners refer to a number of overseas partners who received information related to the scandal,” Senator Pocock said.

She said it was “interesting that Paul McNab, who was exited from the firm’s retirement scheme amid allegations he failed to report wrongdoing by Peter Collins, and that he shared the confidential tax office information with clients, has mentioned a senior PwC figure in the US, Matthew Chen, in relation to the scandal”.

“Was Chen one of the six people named in PwC International’s report into the scandal by legal firm Linklaters? And how long will we have to wait to find out?” Senator Pocock said.

PwC has previously said an investigation by law firm Linklaters identified six members of the firm’s international businesses who misused confidential information, declining to reveal their names, but noting they did not know it was confidential.

The audit and consulting firm said in a statement of its findings that the staff “should have raised questions as to whether the information was confidential”, noting that some had been disciplined but they remained with the firm.

PwC partners are facing an investigation by the Australian Federal Police over leaks of confidential tax information, while the TPB is also reviewing several partners at the firm over their role in the scandal.

Originally published as Senator Deb O’Neill to write to US regulators over new names in PwC tax scandal allegations