The Australian Taxation Office urged then-PwC boss Luke Sayers to “personally review the internal emails” in 2019 while raising concerns about the conduct of the firm’s tax division.
The direction came at one of three meetings between the then-CEO and senior executives at the Tax Office, according to a timeline the ATO provided to the Senate that was published late on Monday.
Mr Sayers denied he had any knowledge of “the confidentiality issues that have since emerged within the international tax practice at PwC” when responding in June to a critical report of PwC conduct by the Senate Finance and Public Administration References Committee.
Committee chair Deborah O’Neill on Monday said, “It is now clear that he was intimately involved in the management of this issue, and his denial of involvement is an obvious misrepresentation of fact.”
Senator O’Neill said the ATO timeline lays out that the consulting company knew of the misconduct of its staff and “did nothing to censure those who participated, or to meaningfully reform the culture of their organisation”.
Former PwC partner Peter Collins shared confidential government information that was used by PwC to advise clients on how to avoid multinational tax law.
After the scandal had been exposed through the regulator, media and the Parliament, PwC stood down partners, launched an external review and eventually sold off its government division.
Without the public pressure PwC “would have continued to enable, promote and celebrate the grossly unethical conduct which so many of their firm either tolerated or directly engaged in”, Senator O’Neill said.
“PwC partners who were the subject of ongoing discussions with the ATO regarding their misconduct were enabled to continue their work with PwC, and their engagements with government and private clients, up until the point it became untenable for PwC’s public image for them to continue.”
ATO also met with Mr Sayers again in 2020, where he raised an upcoming election of PwC’s CEO, according to the timeline. The ATO Second Commissioner at the meeting, Jeremy Hirschhorn, advised him that it would be inappropriate for it to comment on the election process.
Mr Hirschhorn also expressed to Mr Sayers that the “PwC Board should ensure that it is fully abreast of the range of concerns the ATO has had with PwC Tax Group’s behaviour”.
Mr Sayers left PwC later a few months later in 2020 to found his own consultancy.
The then-chief executive either didn’t act on the ATO advice to advise the board or “the entirety of the PwC Board failed to act on this information”, Senator O’Neill said Monday.
“As a result of the document provided in response to my question on notice, it is now beyond doubt that for more than five years PwC had knowledge that senior members of their tax practice had inappropriately misused government information in an attempt to benefit private companies,” she said.
On Sunday, the Albanese government announced a crackdown on tax adviser misconduct and a long term approach to reforming the consulting sector.
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