PwC scandal: Peter Collins emails read in Senate Estimates


Secret emails at the heart of a scandal engulfing consultancy firm PwC have been read out during a Senate Estimates hearing.

Labor Senator Deborah O’Neill on Tuesday read what she described as the “famous last words” of PwC Australia partner Peter Collins — who is alleged to have shared confidential government information with colleagues in order to then effectively market tax avoidance schemes around the world.

PwC on Monday stood down nine unnamed partners over the widening scandal, which is now the subject of an Australian Federal Police (AFP) investigation.

According to Ms O’Neill, Mr Collins wrote in emails and text messages to colleagues, “OK in practice until the ATO gets grumpy and figures out the joke.”

He continued, “Little real chance of any anti-hybrid rule anytime soon. I spent three painful hours today. BOT [Board of Taxation] has zero idea. The only thing they get now is that it is complicated, and perhaps we should not rush, no need to share this because all supposed to be secret.”

The Senator said the excerpts were “just a smattering” of what was included in the 144 pages of PwC emails, The Australian Financial Review reported.

Speaking to ABC Radio National earlier on Tuesday morning, Ms O’Neill slammed PwC’s response the previous day as “contemptuous”.

“What we’ve seen is a trainwreck and yesterday a couple more cars fell off,” she told RN Drive.

“This is about PwC trying to stem the flow of an artery that’s well and truly open now. The reality is this is a company that has not been open and honest with the Australian people, indeed 53 people within PwC Australia and PwC Global had access to confidential information that belongs rightly to the Australian people.”

She described the unfolding saga as “like some great big thick novel you might read over the summer”.

“Peter John Collins was being invited in by the government of Australia because of his deep and extensive knowledge of tax law to be a great Australian citizen and to provide his knowledge to the Treasury to make sure the laws that were being designed would be effective in making sure multinational companies pay their fair share of tax,” she said.

Greens leader Adam Bandt on Tuesday called on the government to “terminate” all PwC contracts.

“We need an immediate review of all of the contracts,” he told ABC Radio. “PwC should not be allowed to sign future contracts.

“Those contracts that it is has, with Defence in particular, should be terminated. There are big question marks now over this and also the adequacy of the investigation up to this point, given that this has been known in some circles for years and that’s why there needs to be a full independent inquiry into it.”

Ms O’Neill cautioned that while it would be “extremely difficult” for PwC to obtain new government work, it was not possible to simply cancel the firm’s “extensive” existing contracts.

“PwC’s contracts need to be given fair and due consideration and a responsible government doesn’t just turn on a headline and undo contract law,” she said. “We have to deal with that in a very sensible and coherent way.”

But Ms O’Neill stressed she no longer had trust in PwC. “Would you trust them? Do you think that I trust them? How can we possibly trust them?” she said.

“This is the equivalent of PwC Australia wagging a finger at the nation and saying, ‘Don’t you worry about that, we’ve sent nine people home to have an extended holiday, that’s going to sort the problem out. Do you want the 53 names? Sorry, we’re not going to give it to you.’ That is the response we’ve had from PwC — it’s contemptuous.”

Treasury Secretary Steven Kennedy appeared at Senate Estimates on Tuesday, where he remained tight-lipped due to the ongoing investigation.

But he said he did not believe PwC had “systematically failed us on an ongoing basis”. “No, I think the systems have worked well,” he said.

“But do we have cause to more carefully look at these issues, to review and reform the tax practice Tax Practitioners Board, to increase the penalties available, to do all those things? The answer to that is clearly yes. That’s what the government has asked us to do, and they’ve begun to do that.”

The scandal at PwC, one of the “big four” accounting firms in Australia, has been brewing since January.

Competitor Deloitte has weighed in, with the chief executive and chairman describing the storm as “deeply troubling and disappointing”.

The scandal started when, in 2015, the Federal government moved to crack down on multinational corporations avoiding tax by developing the Multinational Anti-Avoidance Law.

Mr Collins, the former head of international tax for PwC Australia, was brought in to help the government design the laws.

He signed three separate confidentiality agreements as part of that process.

It’s alleged that Mr Collins received confidential information and documentation — and proceeded to share information within PwC with colleagues who were not authorised to receive it, a Tax Practitioners Board inquiry found.

His registration as a tax practitioner was terminated for breaching the Professional Conduct in the Tax Agent Services Act 2009, which required that he must act honestly and with integrity, and to avoid conflicts of interest.

As the scandal has grown, last week the Federal government essentially banned PwC from doing any further business with the Commonwealth — a huge loss for the firm.

Treasury said in a statement that Mr Collins had “improperly used confidential information”. It also pointed to a “wide range of individuals within PwC who were directly and indirectly privy to the confidential information”.

“Treasury has referred the matter to the Australian Federal Police to consider commencement of a criminal investigation,” the statement read.

The list of people who had access to that information has not been publicly revealed — however that could soon change.

The Greens are pushing to table in parliament a list of 36 PwC partners named in the emails after they were blocked from doing so during Senate Estimates because of concerns it could disrupt the AFP probe.

Around 14 US tech companies are also understood to be named in the emails.

Those companies will likely be watching nervously and awaiting a potential PR nightmare.

The AFP has said its investigation may widen if it suspects other individuals were implicated in the leaks.

Prime Minister Anthony Albanese said on Monday he thought the names of those partners who had access to confidential tax information should be made public when appropriate.

“Of course, there are investigations under way, and I don’t want to say anything to interfere with those processes,” he told 2SM Radio.

In addition to the nine unnamed partners who were put on immediate leave on Monday pending the outcome of an ongoing PwC investigation, two executive board members have stood down from their leadership positions.

PwC Australia acting chief executive Kristin Stubbins is expected front a Senate committee on June 7.

“I want to apologise on behalf of PwC Australia,” Ms Stubbins said in a statement. “For sharing confidential government tax policy information and for betraying the trust placed in us.”

Ms Stubbins apologised on behalf of PwC to the public, the federal government, PwC’s clients and its 10,000 “hardworking, values-driven” partners and staff in Australia who had been “unfairly impacted”.

She admitted there had been a clear lack of respect for confidentiality and that PwC Australia did not have adequate processes and governance in place, citing poor decision making.

She added that PwC had a culture at the time in its tax business that allowed inappropriate behaviour — and that the firm had not properly held its leaders and those involved to account.

“Although investigations are still underway, we know enough about what went wrong to acknowledge that this situation was completely unacceptable,” she said.

“No amount of words can make it right. But I am fully committed to taking all necessary actions to re-earn the trust of our stakeholders. And, as we work through this process, I am committed to being fully transparent.”



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