“It was miraculous. It was almost no trick at all, he saw, to turn vice into virtue and slander into truth, impotence into abstinence, arrogance into humility, plunder into philanthropy, thievery into honor, blasphemy into wisdom, brutality into patriotism, and sadism into justice. Anybody could do it; it required no brains at all. It merely required no character.”
Luke Sayers takes an ATO epiphany to the chest
Myriam Robin and Mark Di Stefano
Jun 2, 2024
They say the major consulting firms are
politicised fiefdoms of intrigue, full of secrets and plots. Of course, they’ve
got nothing on the federal public service.
Consider the extraordinary revelations from the Australian Taxation Office, released last week, to again implicate Luke Sayers in the PwC scandal.
Luke Sayers, former PwC Australia CEO, at the
Senate inquiry in October. Alex
Ellinghausen
Sayers, who was CEO during the major events
of PwC’s tax leaks crisis, has for 18 months been finding ways to get out of
the picture, skilfully slaloming through almost every obstacle before him.
Sure, a bipartisan Senate committee didn’t
believe his testimony on how he remained oblivious to the ATO’s growing
concerns about PwC’s misconduct.
On the other hand, a PwC investigation into
his awarding
of travel contracts last week reported that he did nothing wrong. The man
remains resplendent on the society scene. The Carlton Blues should make the
finals and all seems right in Sayers’ world.
But ask Michael Corleone. No matter
how hard you try to get out, there’s always a chance of being pulled back in.
On Friday, incidentally the day a Senate
inquiry into the saga was due to release its (now delayed) final report, a
separate joint inquiry into structural challenges in the audit, assurance and
consulting industry released a response from the ATO that it had received two
weeks earlier.
In an April hearing of this joint inquiry,
Senator Barbara Pocock had asked the ATO’s second commissioner, Jeremy
Hirschhorn, for detail on what else was discussed at his fateful meeting
with Sayers last year. The ATO has now obliged, outlining in vivid and
previously unseen detail the substance of the August 29 discussions between
Hirschhorn and Sayers.
The ATO reckons Hirschhorn outlined a
shopping list of issues, including PwC’s “inadequate compliance with formal
notices” related to inappropriate claims of legal privilege, its potential
“promoter penalty activity” in a range of areas such as multinational
anti-avoidance law (MAAL), its involvement in the Foreign Investment Review
Board approval process for clients (which “had the potential to mislead or
subvert those processes”).
Plus, the big kahuna: PwC’s “breaching the
confidentiality of a Treasury consultation process and the apparent
commercialisation of that breach”.
“To evidence the above concerns, Mr
Hirschhorn read out several representative PwC emails to Mr Sayers which had
been previously provided to the ATO by PwC.”
Christ, it’s a miracle! Right at the death,
the ATO and Jez have had a freaking epiphany, relaying details that were once
deemed private and confidential.
Buried
in emails
This dawning of disclosure carries great
importance, precisely because what happened at the first Hirschhorn-Sayers
get-together (there would be two others) sits right under the former CEO’s
escape hatch.
Last year, the ATO released its “timeline” of
events, revealing little about the meeting, except that they discussed “a range
of concerns related to PwC conduct and the formal notice process”, and that
Hirschhorn “suggested that Mr Sayers personally review PwC’s internal emails”.
It opened up a lane, and Sayers drove right
at it. His line became that he didn’t recall being told to look at emails
relating to the confidentiality issues, and besides, there were “tens of
thousands of documents and emails” that PwC had given to the ATO. How could he
be expected to read all that material?
This always seemed to us a preposterous
excuse. If the country’s second-most powerful tax officer is telling you to
look at the emails, you find out which damn emails, and look at them!
Now, according to the ATO’s most recent
response, Hirschhorn didn’t only tell Sayers to read them. He read them to
Sayers himself!
But which emails? Maybe the ones about Peter Collins and his
breaches of a confidentiality agreement? Maybe the ones about legal
professional privilege, or maybe some other emails entirely. The ATO – still –
isn’t explicitly telling. Though it is suggesting the reference to emails was
hardly made in passing.
The effect of this is to (further) undermine
Sayers’ busy man schtick, painting him instead as the CEO who somehow ignored
the blaring air horn being pressed up against his face.
So, why now? The ATO’s timeline of events was
released in August, fully 10 months ago. Sayers responded in the Senate last
October, while the Senate revealed its assessment of who it believed in
April.
Now, the ATO has fronted up with far more
detail, shapeshifting into the Taylor Auerbach of the affair (that is,
revealing matters of salacious relevance only as the final whistle has been
blown).
Mind you, the separate Senate inquiry into
consulting has already preferred Hirschhorn’s evidence over Sayers, whom it
found “implausible” and “scarcely credible”. The ATO has already won, yet now
returns, with receipts.
ATO’s
amuse-bouche
The ATO’s answer doesn’t say why it didn’t
outline all this earlier. And few could fail to notice that its answer was
lodged shortly ahead of Monday’s ATO appearance at Senate Estimates, where the
agency will be questioned about extensive and newly released documents relating
to its war with the Tax Practitioners Board over the latter’s handling of the
PwC epic.
It might now get some queries about Sayers
too. Call it the amuse-bouche before the tricky questions roll in.
As for Sayers, who knows if he’ll be afforded
a formal chance to respond to the ATO’s latest volley. Or if he’ll even want to
keep kicking this ball along.
Safe to say, he’s not amused. A spokesman for
the ex-PwC chief executive referred us to his past statements, adding that
“while the ATO’s version continues to evolve and contradict itself and change,
Mr Sayers has been steadfast and consistent, and nothing has changed from what
he has shared with the committee through the proper process”.
These are final, grim thrashings of scandal.
Many at the top are giving it one last go to rewrite the script, or even
better, find the ending. Spare a thought for PwC’s partners and employees.
Those who haven’t already been sacked will be having nightmares for years.
Myriam Robin is Rear Window
editor based in the Melbourne newsroom. A Rear Window columnist since 2017, she
previously reported on financial markets and media. Connect with Myriam
on Twitter.
Email Myriam at myriam.robin@afr.com
Mark Di Stefano is Rear Window
columnist, based in the Sydney newsroom. He previously worked at BuzzFeed, the
Financial Times and The Information before joining the Financial Review as a
media and tech correspondent. Connect with Mark on Twitter.
Email Mark at mark.distefano@afr.com
