Members of auditing giant PwC’s global leadership have intervened in a growing Australian tax leak scandal that now threatens to engulf parts of the firm’s operations in other parts of the world.
A number of senior leaders at PwC Australia have now stepped down, including the company’s chief executive, Tom Seymour, after it emerged that a PwC tax partner had been sharing confidential information about the Australian government’s tax reform plans with other partners and staff at the firm.
The Australian arm of the firm, which was formerly known as PricewaterhouseCoopers and is considered one of the world’s “Big 4” accounting giants, used the leaked intel to target new potential clients seeking to dodge upcoming tax law changes.
ICIJ partner the Australian Financial Review revealed in January that PwC partner Peter Collins had his registration as a tax agent terminated for leaking intelligence from his work with the Australian government. Collins had been advising the Treasury on measures to combat international tax avoidance.
A set of redacted internal PwC emails, released earlier this month by the Tax Practitioners Board, shows that between 2014 and 2017 Collins shared secret information with dozens of PwC team members.
PwC reportedly leveraged its advanced knowledge of the tax reforms to book millions in fees advising tech companies and other tax avoiders, appearing to target a group of companies known as the “dirty thirty” for their use of tax havens. Google, Apple and Microsoft are believed to be among the companies approached by the firm within hours of the Australian government announcing a new anti-tax avoidance law in mid-2015, the Australian Financial Review reported.
While company names in the set of PwC emails were redacted, the firm said it was likely that the companies themselves will know they are named; however, the firm also said the companies would not have necessarily been aware that advice they were receiving at the time was developed using leaked information.
The redacted email chains show a flurry of activity around laws proposed or introduced around 2015 and 2016 — a point in time when tax avoidance by multinational corporations was in the public spotlight. ICIJ’s Luxembourg Leaks investigation, published at the end of 2014, showed how PwC Luxembourg was helping huge brand-name corporations slash tax bills by funneling money through the tiny European duchy. The Australian PwC emails show the firm utilized its offices around the world to help make use of the leaked information, including in London, Singapore, New York and the Netherlands.
Australian lawmakers are calling for the PwC team members involved in the scandal and the companies they advised to all be made public. Others are also calling for PwC to be banned from government contracts. The scandal is likely to take center stage at Senate Estimates hearings next week.
This article was authored by Hamish Boland-Rudder from The International Consortium of Investigative Journalists (ICIJ)