Former EY partner Peter White - PWC dragged into government contracts corruption probe

Associate Professor Andy Schmulow

Expert in conduct risk in financial services. Internationally recognised academic and advisor to governments. 

It’s become an immutable truth. Whenever corruption rears its ugly head, whenever the public good is being defiled, whenever the weakest and most vulnerable in our society are being preyed upon, whenever the community is being raped, there you will find PwC Australia. This from the attached article:

The commission will hear evidence about the dismissal of SINSW chief procurement officer, who allegedly was made redundant as part of a “realignment” approved by Manning. This came after she had raised concerns about the expanding scope of the PwC arrangement:

“PwC has been dragged into a major corruption inquiry into the provision of millions of dollars in government contracts to consulting firms with links to the former chief executive of a NSW infrastructure body.

In a six-week inquiry beginning on Monday, public servant Anthony Manning is alleged to have directed a “$20 million project” to a partner at the big consulting firm who was a former colleague and assisted with his application for the chief executive position.”

The former School Infrastructure NSW chief executive is also alleged to have dismissed a senior procurement official who raised concerns about PwC’s engagement. he is also alleged to have sanitised an external report, which indicated “significant probity risks” with the PwC arrangement.

The inquiry will examine allegations that Manning engaged in serious corrupt conduct by directing more than $20 million in contracts and engagements to friends and business associates, while taking reprisals against staff who complained about the department’s processes.

A PwC spokeswoman said the firm “had an engagement with SINSW … [which] was led by a former partner of PwC. The partner left the firm in 2018”.

The firm is assisting the ICAC with its inquiry. Given the inquiry is underway, it is not appropriate to comment further.”

Counsel assisting the commission Jamie Darams, SC, told the inquiry on Monday that PwC hosted a ceremony announcing the launch of SINSW in 2017 and the appointment of Manning as its inaugural chief executive.

Manning had previously worked alongside Amy Brown, who had moved from the NSW public service to become a partner at PwC.

Brown is alleged to have put forward Manning’s name for the role and helped him during the recruitment process for the chief executive position by reviewing his CV and conducting interview preparation.

Brown is not accused of any wrongdoing.

Within three months of Manning’s appointment, PwC and Paxon – another consulting firm run by a former colleague – were appointed contracts to advise the new agency on “delivery models” for school projects.

Manning did not declare a conflict of interest, ICAC alleges.

The public tender process advertised the contracts as fixed arrangements with a limited timeframe. But almost immediately after the contracts were awarded, they were converted to “standing offer arrangements” – allowing for ongoing engagements without a fixed scope or timeframe.

“This arrangement was then used to engage PwC and Paxon to provide a range of additional services with no apparent relationship to … the subject of the original tender,” Darams said in his opening statement.

“To give a sense of the value attributed to the standing offer arrangement by PwC, at one stage the PwC partner referred to it as a ‘$20 million engagement’.”

PwC ultimately made $1.8 million from the arrangement in 2017 and 2018. Paxon made $4 million over four years.

The NSW and Commonwealth governments are slashing spending on public sector consultants, which ballooned before the PwC tax leaks scandal.

Both governments have established their own in-house consultancies, and federal Labor has pledged to cut $4.7 billion from spending on contractors and consultants.

PwC sold its government consulting arm to Allegro funds in 2023 for $1 in the wake of its tax leaks scandal.

Critical report ‘sanitised’

ICAC alleges Manning directed a range of consulting contracts and lucrative external appointments to close friends and business associates.

These include the PwC and Paxon contracts and more than $3 million to Healthwest – a business owned by a close friend and former colleague; $1.7 million to companies owned by a yoga classmate and colleague; and $9 million to a close friend and “strategic adviser”.

ICAC also alleges Manning took reprisal action against colleagues who aired concerns about the department’s procurement process.

The commission will hear evidence about the dismissal of SINSW chief procurement officer, who allegedly was made redundant as part of a “realignment” approved by Manning.

This came after she had raised concerns about the expanding scope of the PwC arrangement.

Manning engaged a separate consulting firm to investigate the complaints made by procurement staff about the PwC and Paxon contracts. An initial report identified “significant probity risks”, particularly in relation to the department negotiating directly with PwC about “substantive and high-value” variations to the original scope contemplated by the tender.

But it is alleged that the report was sanitised significantly after Manning met with its author, and recommendations about probity and value for money were either excised or watered down, ICAC will argue.

The commission is also investigating whether a subsequent contract awarded by Manning to the same consulting firm was a “quid pro quo” for the final outcomes of the report.

PwC dragged into government contracts corruption probe

From comments on LinkedIn 

Blake Roet

The AFP has been moved back under Home Affairs which has contracts with PwC and where the attempted visa processing privatisation sale to various PwC identities and their mates was attempted until PwC in New York had no choice but to step in and shut down PwCs involvement in this extraordinary and mischievous project...so does this not represent an extraordinary conflict of interest with regards to the AFPs alleged investigatuon of PwC or am I overly concerned about what i learned about conflict of interest from very sophisticated US legal counsel over circa 10 years and despite this knowledge enabling me to legitimately inflict significant financial pain upon Merrill Lynch Australia, which did not appear to even know what conflict of interest was or how this can create a catastrophic reputation risk, and the impact this then had upon its US parent which was a PwC audit client, and which was then being prosecuted in the US for the same type of wrongdoing...which was extraordinary wrongdoing in Australia, and the US, that the US authorities polarised Australian counterpart ASIC refused to even consider? https://www.theage.com.au/opinion/conflicting-interests-corner-merrill-lynch-20040618-gdy25x.html

Former EY partner banned over tax evasion and schemes for clients

Former EY partner Peter White has been banned by the Tax Practitioners Board for five years for personal tax evasion and creating schemes for clients to minimise tax.

The Tax Practitioners Board gave White the maximum ban and said his conduct was “serious, deliberate and dishonest” and broke tax law and the tax agent code of conduct. The board said White was no longer a “fit and proper person to remain registered”.

White, who was sacked by EY in August 2022, began his own firm, Albus Advisory, in September 2022.

White and Albus are appealing the termination and ban. They failed to secure a stay on the decisions last week after the Administrative Review Tribunal was “briefed on the serious nature of these cases”, the TPB said.

In 2023, The Australian Financial Review revealed that the Commissioner of Taxation was suing an ex-partner in the Federal Court, piling further pressure on the big consulting firms following the PwC tax leaks scandal.

The ATO alleges White promoted three illegal tax schemesto seven clients in the five years to April 2021. It also alleges he took $700,000 in secret commissions while setting up schemes for wealthy clients.

White fought for more than a year to stop the Financial Review naming him, but lost that battle in September 2024. The hearing began in April and the case is ongoing.

The TPB said its findings related to “dishonesty, integrity, competence, conflicts of interest and obstructing the administration of the tax laws”.

Close collaboration

The TPB concluded White engaged in tax minimisation schemes for clients, personal tax evasion for his own professional fees, false statements to the ATO that his fees were gifts, failed to pay $205,000 in GST liabilities, failed to lodge his tax statements and failed to pay his tax debts of $2 million. White is separately challenging the ATO’s assessment of his tax liabilities.

“There is no future for tax agents associated with tax avoidance or evasion. Mr White’s misconduct harmed his clients, his firm, the tax profession and the tax system, and requires the maximum penalty of deregistration and exclusion for five years,” TPB chairman Peter de Cure said.

“This case demonstrates close collaboration between the TPB and ATO to address professional misconduct and tax schemes that could undermine services and support provided by government to the Australian community.”

White could be fined as much as $1.5 million, or twice the benefit he obtained, if the Federal Court rules against him. This case is one of only a handful of tax promoter cases brought to court under laws passed in 2006.

In his defence, filed in October 2023, White claimed other staff at EY were involved in reviewing and drafting documents. He denies the ATO’s allegations.

Property developer Novce Grujoski launched a separate legal action in the NSW Supreme Court against the former EY partner in 2022.

Grujoski alleges White told him to transfer $400,000 in February 2017 and $300,000 in August 2019 to a trust as part of a tax structure. The claim alleges these were “secret commissions”, that White was a beneficiary of the trust, and that the former EY partner had a pre-existing relationship with the company he used to minimise tax losses.