PwC: No one who breached rules will be transferred to new company
The Acting PwC chief executive, Kristin Stubbins, has repeatedly stressed that no one found to have been involved in the misuse of confidential federal government tax information will be allowed to work for a new spin-off company.
PwC has announced plans to divest itself of all government work in Australia by spinning off a new company, as part of a $1 buyout by the private equity investor Allegro Funds.
Stubbins has told a NSW parliamentary inquiry that about 100 PwC partners will be transferred to the new company, although the details are still being confirmed.
We will announce anyone who has done the wrong thing and those people will not be going across in the transaction.
Stubbins has also sought to assure the NSW government that no one involved in scandal is currently working with the state government:
We deeply regret and I deeply, deeply apologise for the confidentiality breaches that happened back in 2015 and the lack of an effective response to that in our firm. I completely acknowledge that.
It occurred in a small part in our tax practice and we have no reason to believe that any of these issues relate to the NSW government and all. But obviously, if we did have specific instances, we would deal with those instances.
About 130 PwC Australia partners and up to 2000 staff from the firm’s embattled government consulting arm will move to a new company, codenamed Bell, as part of a proposed buyout by private equity investor Allegro Funds priced at just $1.
Allegro to pay just $1 to save PwC’s government business Edmund Tadros, Neil Chenoweth and Kylar Loussikian
By the King’s birthday long weekend, it had been four months, two weeks and five days since The Australian Financial Review first reported that PwC Australia’s former head of international tax had shared confidential government briefings with the firm’s partners and by extension its clients. And the recriminations were unending, crippling what had become a major practice for the firm – providing advice to state and federal public services.
Rob Silverwood, the firm’s new head of financial advisory and a veteran deal maker, landed on a plan. In a remarkable coincidence, he had told the Financial Review only last month that cashed up private equity groups were hunting for deals, particularly among distressed assets. And he had just the one to sell: PwC’s embattled government consulting arm.
ASIC looks to ban Peter Collins and PwC partners
The Australian Securities and Investments Commission is investigating whether to ban PwC’s former head of international tax, Peter Collins, and take action against as many as 160 other personnel for professional misconduct.
PwC has no regard for confidentiality. It has no regard for the public interest. Its desire to make money is aggressive and all consuming. Its misuse of protected government information earned the consultancy $2.5 million, with the expectation of more.
“It is clear that the desire for personal gain trumped any obligations that PwC had to the Commonwealth of Australia and its citizens,” a senate committee found this week. “This was a calculated breach of trust by PwC.”
The finance and public administration references committee found PwC “supported and condoned” the misuse of government information by former partner Peter-John Collins. It stonewalled the tax office, misusing and misapplying legal privilege to hide thousands of documents. “It seems clear,” the committee wrote, “that PwC’s use of this tactic is not restricted to the Collins matter.”
The committee notes PwC had a legal obligation to report Collins’s actions but did not. It failed to make other disclosures that were also required by law.
“Taken together, the committee concludes that PwC engaged in a deliberate strategy over many years to cover up the breach of confidentiality and the plan by PwC personnel to monetise it.”
The report goes on to say PwC has a history of cover-ups. It says the conflicts of interest inherent in PwC’s operations were structural and dishonest in nature. It criticises the Tax Office and the Tax Practitioners Board for their slow and inadequate investigations. It says PwC is fundamentally conflicted. The company did not understand proper process and did not see the need for transparency or accountability.
“The question therefore arises: given the extent of the breach and subsequent cover-up now revealed on the public record, when is PwC going to come clean and begin to do the right thing?” the committee report asks.
“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?”
It is rare for a senate committee to be so direct but it is rare also for a company to be so brazen and opportunistic. The culture sketched in the report’s pages is ruthless and parasitic. The company is wantonly exploitative. Profit drives all. Ethics are nowhere.
This is the business, along with the rest of the Big Four, to which the proper functions of the public service have been outsourced. This gang of suckering management consultants have slowly taken over. To anyone watching, it is no surprise. Of course these Excel spivs are after only money. Of course their advice is rigged and loaded with every angle and edge of advantage.
There is an old joke about the management consultant who counts a farmer’s sheep and tries to leave with his dog. The punchline is that he arrived uninvited and told a man something he already knew. The image is almost quaint against the reality.
Here is a group of people who would charge the government for advice and then on-sell secrets they stole in the process. It is a kind of double robbery from the blue-suited chisellers, a shameless assault on propriety.
Anthony Albanese has promised to end the government’s dependence on consultants and rebuild the public service. On the strength of this report, it could not happen soon enough.
This article was first published in the print edition of The Saturday Paper on June 24, 2023 as "Blue-suited chisellers".Blue-suited chisellers
