Wednesday, February 14, 2024

Police probe into PwC tax leaks goes international

 AFP has terminated all PwC contracts as investigation continues

The Australian Federal Police have terminated all of its contracts with PricewaterhouseCoopers Australia, as officers confirmed its "complex" investigation into the big four firm continues.

While PwC Australia sold off its government advisory business last year, it still operates its auditing business.
"The AFP did determine a range of contracts with PwC with effect of the June 30, 2023. We signed that deed on the July 3, 2023," Mr Wood said.
"We had contracts for an organisational health solution, there were several audits ... they were the AFP's internal audit provider, and they were also working on an IT solution called a privileged access management solution."
The AFP is still conducting an investigation into the firm, after Treasury made a referral on May 24 last year. 
It relates to allegations that PwC Australia's former head of international tax Peter-John Collins shared confidential information from a Treasury briefing with other staff and partners.
In January 2023, the Tax Practitioner's Board banned Mr Collins from practising as a tax agent for two years. In May, emails tabled in Parliament alleged 63 people had received the confidential information, prompting Treasury to refer the matter to the AFP.
Known as Operation Alesia, the investigation is "complex", and is being treated as a priority, Deputy Commissioner Ian McCartney said, in response to questions from Liberal senator Richard Colbeck and Senator Pocock. 
"It's an investigation that the AFP is proceeding as a priority, in terms of a priority investigation, but given the fact that it's ongoing, Senator [Colbeck], I don't think it's appropriate to ventilate those issues in terms of the progress of the investigation," Deputy Commissioner McCartney said. 
The investigation is being overseen by the Sensitive Investigation Board, he said.
Its scope is "both domestic and international", but the Deputy Commissioner would not comment on the number of individuals being investigated. 
He also declined to provide a potential timeline for the investigation, saying, "I don't think I can give you a definitive timing when these matters traditionally take a considerable amount of time."

'We will get to the bottom of it': AFP Commissioner

Australian Federal Police Commissioner Reece Kershaw said the complexity of such investigations required painstaking effort from officers. 
"When you have a criminal investigation involving, as in, as the Deputy said, very complex issues ... it's really hard for the investigators to make a sterile corridor to keep that brief of evidence away from any future challenge or complications," Commissioner Kershaw said.
"So the team have to painstakingly go through every piece of material, they have to literally analyse it in depth, you have to have a legal team attached all the way along. It's extremely complex. 
"But you know, whilst it may be not satisfying for the timeline, we will get to the bottom of it at the end of the day, it's just going to take a while."

Australian Federal Police commissioner Reece Kershaw signalled the agency would wrap up all its contractual agreements with the firm last August, and officials confirmed on Tuesday that this was now in effect.
Chief Financial Officer Paul Wood told Greens senator Barbara Pocock the government had paid a total sum of $627,999 to the firm as a "compensation payment", explaining none of this was a penalty, but 

Police probe into PwC tax leaks goes international

The AFP investigation into the PwC tax leaks scandal has extended to the force making overseas inquiries, a Senate estimates hearing has been told.

Senior AFP commanders told the Senate legal and constitutional affairs committee late on Tuesday the inquiry, dubbed Operation Alesia, had been designated a “sensitive” and “priority investigation” involving a “full team” of criminal investigators.
AFP Deputy Commissioner Ian McCartney. Alex Ellinghausen
The complexity of the matter meant they were unable to say when it would be finalised, or provide any further details about the operation.
A separate Senate committee examining consultants last week warned PwC that its reform process was being derailed by the refusal of the firm’s global leadership to identify the so-called “dirty six” international partners punished over the tax leaks matter.
The AFP’s revelations that its investigation has extended overseas will cause concern for PwC International which does not want the tax leaks scandal to extend beyond the Australia firm because it could trigger further scrutiny from US and British regulators.
Separately, outgoing Australian Tax Office commissioner Chris Jordan has endorsed the idea that large partnerships, such as those of the big four consulting firms, be brought into the same legal framework as corporations.

Ongoing, complex’ investigation

At the estimates hearing, Liberal senator Richard Colbeck asked AFP representatives for an update on the investigation and inquired if the force had been given access to the report by law firm Linklaters identifying the six international PwC partners involved in the leaks matter.
AFP deputy commissioner Ian McCartney replied: “The investigation is ongoing. It is complex. It’s an investigation that the AFP is proceeding as a priority in terms of a party investigation, but given the fact it’s ongoing, Senator, I don’t think it’s appropriate to ventilate those issues in terms of the progress of the investigation.”
The officer also said that Operation Alesia was created after a referral from Treasury from last May over “an allegation involving the disclosure of confidential information by a former partner of PricewaterhouseCoopers”.
The committee was also told the AFP had ended all of its ongoing contracts with PwC at the end of June last year after the Department of Finance effectively cut the big four firm off from winning work from the Commonwealth due to the leaks scandal.
Find out the inside scoop about Accenture, Deloitte, EY, KPMG, PwC and McKinsey. Sign up to our weekly Professional Life newsletter.
Edmund Tadros leads our coverage of the professional services sector. He is based in our Sydney newsroom.Connect with Edmund on Twitter. Email Edmund at