Neil Chenoweth - Claims of secret payments, gifts, bullying: Former KPMG partner named

Former KPMG boss turned ATO chief Chris Jordan used tax haven, whistleblower alleges

Unsubstantiated whistleblower documents allege former ATO commissioner Chris Jordan received secret offshore payments during his time at KPMG.

TANSY HARCOURT

August 20, 2026 

Former KPMG partner and tax commissioner Chris Jordan addresses the National Press Club in Canberra in 2024. Picture: NewsWire / Martin Ollman

Historic allegations about wrongdoing at KPMG can be traced back to the era when Chris Jordan was one of its senior partners before going on to become the Australian Tax commissioner, according to a document released by parliament on Thursday.

The heavily redacted document alleges “secret commissions” of $2.4m were paid to two people. This publication has seen the unredacted document and can reveal Mr Jordan and fellow former KPMG partner Wayne Jones as the individuals it refers to.

A second 2021 document yet to be substantiated provides greater detail of allegations Mr Jordan received million-dollar payments off the books during his time at KPMG in the late 1990s and hiding the money in a secret bank account in the Isle of Man to avoid paying tax in Australia.

Mr Jordan did not respond to requests for comment and the ATO would not comment. Mr Jordan has previously denied the allegations.

While the public document redacted Mr Jordan and Mr Jones’ names, it revealed two other former partners Philip Henry and John O’Donnell were alleged to be “selling tax losses for which Philip Henry knew to be non-existent or materially deficient”.

The Australian does not allege the claims are true, just that they have been made. If true, they destroy any argument that KPMG has floated about its successive scandals being the actions of a few rogue partners.

KPMG has commenced a massive 500-job cull, axing partners and staff as the fallout from its audit scandal threatens $442 million in contracts.

KPMG is teetering under the weight of significant governance failures. These include misusing confidential client information to secure work, maintaining cozy ties with former partners on corporate boards, and audit partners compromising independence by accepting perks such as Taylor Swift concert tickets from clients.

Mr Jordan’s name has come up over these 1990s claims because of the republication last week by The Australian Financial Review of whistleblower allegations about Mr Jordan’s involvement in the same alleged tax avoidance. 

The newspaper claimed KPMG had paid the whistleblower $500,000 to stay quiet. 

The Financial Review reported that Mr Jones and Mr Jordan, who had been friends as well as colleagues, were involved in arrangements surrounding Dinnans Ltd, an Isle of Man shell company used to execute their offshore money transfers.

KPMG has now begun the brutal task of firing staff and reducing partner pay as it seeks to manage a dramatic slump in revenue from the public airing of its unethical behaviour.

On Thursday, many partners were delivered news about “moving down” the bands that dictate their portion of the firm’s profit share – a pay cut – as part of desperate cost saving measures, The Australian can reveal. 

New chief executive John Sams started “conversations” just a day earlier with 50 partners that will be exited. Next week, 450 client-facing staff will also lose their jobs.

In a cruel twist, it’s believed that none of those expected to lose their jobs will be from the audit or tax teams, where the whistleblower scandals have stemmed from, because it needs all hands on deck to complete existing contracts. 

KPMG casualties include Eileen Hoggett, Martin Sheppard and Paul Rogers. Artwork: Emilia Tortorella

Former CEO Andrew Yates, former chairman Martin Sheppard, and former chief operating officer Eileen Hoggett have all left the firm as a result of the current audit scandal, along with the former head of audit Julian McPherson and audit partners Paul Rogers and Kim Lawry.

KPMG said it has been difficult to investigate the claims about Mr Jordan because they allegedly occurred so long ago.

Now the task may fall to Mr Sams, or the ATO and the Tax Practitioners Board that it controls. Complicating matters is the fact that both authorities are heavy with former KPMG partners themselves. 

Those include Jeremy Hirschhorn, who is the ATO’s second commissioner, leading its Compliance and Engagement Group. Peter de Cure is the chair of the Tax Practitioners Board and Simone Carton is a board member. 

Mr Jordan was the commissioner and Dana Fleming served for many years as assistant commissioner. 

Mr Jordan was the first person to ever be appointed directly from the private sector to head the ATO and is understood to have had deep personal and professional connections. He was appointed by the Gillard Labor government in 2013 and reappointed by the Turnbull Coalition government in 2017.

In the unsubstantiated 2021 document, the author provides greater detail of the alleged “secret commissions” worth $1.2m referred to in the other, now public, document released by parliament.

“In 1998, Jordan and Jones brokered a deal with TSB Lloyds and Rothschild Australia and negotiated a structuring fee of $1.2m each which they decided to treat as personal income rather than properly returning it to KPMG,” said the author in the 2021 document. 

“The payments to Jordan were made by Dinnans, an Irish subsidiary of an Isle of Man entity. Jordan did not return the fee as assessable income for income tax purposes. It is inconceivable that a person such as Jordan could have been appointed to the position of Federal Commissioner of Taxation,” they continued to allege.

That 2021 letter also alleges Mr Jordan and Mr Jones participated in tax schemes that trafficked tax losses of mining companies. The schemes included “Copper Doctor” and “Gold Doctor.”

Claims of secret payments, gifts, bullying: Former KPMG partner named

Neil Chenoweth KPMG paid more than $500,000 to tax division whistleblower

Following orders or bodgy work? Allens, Ashurst squirm - KPMG partners lied to deputy general counsel, parliamentary inquiry hears

 

Claims of secret payments, gifts, bullying: Former KPMG partner named

Neil ChenowethInvestigative journalist

Aug 20, 2026 – 8.00pm

A former KPMG partner, Philip Henry, allegedly received secret commissions, reduced client fees in return for a car and other personal gifts, and treated female staff inappropriately.

The allegations against Henry were made by a former KPMG senior manager and communicated to the firm in a letter on August 30, 2023.

Philip Henry in 2005 when he was chairman of mid-tier accounting firm PKF. Tamara Voninski 

In the letter, the manager blames Henry for wrongdoing for which she was held responsible, including being pursued by regulators for more than a decade. KPMG eventually paid the senior manager a settlement of over $500,000 for her legal costs.

Henry’s name was revealed when the letter was tabled on Thursday by the parliamentary committee that is looking into wrongdoing at KPMG, in particular whistleblower claims of misuse of client information by the audit division.

KPMG’s former chairman Martin Sheppard and former chief executive Andrew Yates were asked about the $500,000 settlement by the parliamentary committee at a hearing last Friday.

Yates said the firm had been unable to substantiate the allegations in the letter as they were “very historic. The bulk of them dated back about 25 years so it was very, very difficult [to assess].

“My recollection is that the individual was reluctant to provide information to the firm...we did try and investigate but the passage of time had been so long that we were just unable to find the information,” Yates said.

The Australian Financial Review reported the $500,000 settlement and details of the alleged misconduct before Friday’s hearing.

Henry – who was contacted for comment – was head of KPMG’s middle market practice until 2004, when he was appointed NSW chairman of mid-tier accounting firm PKF.

The letter claims that during his time at KPMG, Henry and other partners received secret commissions in cash “for facilitating clients’ participation in a taxation arrangement” and that “[name redacted] was selling tax losses which Philip Henry knew to be non-existent or materially deficient, and also knew that [redacted] had not filed income tax returns for more than 25 years”.

The letter describes Henry offsetting client fees for personal gifts he received, including a new garage door, painting his house and a Maxima sedan.

It also claims “misuse of client trust accounts administered by KPMG for personal tax benefit without client consent”, and “misappropriation of funds from client trust accounts”, including one case of approximately $7000 where it claimed that “Philip Henry arranged for the funds to be used for the purchase of a jet ski from [deleted] for personal use”.

The letter referred to a tape that it claimed contained references to destruction of evidence in the decade-long Australian Tax Office investigation that targeted the senior manager.

The letter claims Henry treated female staff and clients inappropriately, and of “bullying and intimidating [redacted] to act outside the scope of her employment contract regarding significant legal action against KPMG by the Attorney-General [Michael Lavarch], a legal action which could have made the firm insolvent”.

It is not clear what the action referred to here was. The reference appears to refer to LOIS case management software which the then Peat Marwick firm contracted to provide to the Attorney-General’s department in the early 1990s, only to abandon the tender after running up large costs in an effort to address flaws in the software.

The Financial Review is not suggesting the claims in the letter are true, only that they have been made.

In a matter unrelated to the Henry allegations, the letter refers to an anonymous 2021 letter which claimed that “secret commissions amounting to $2.4 million received by [redacted] ($1.2 million each) were the rightful income of KPMG given the nature of the transactions, the firm’s relationship with the counterparties and the obligations of partners at the time”.

The letter sent in 2023 claimed that the anonymous 2021 letter had been “corroborated by a credible witness”.

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Neil Chenoweth was a senior writer for The Australian Financial Review

Former KPMG partner Philip Henry was publicly named in a parliamentary committee hearing regarding historic allegations of secret commissions, trust fund misuse, and workplace misconduct, a matter intertwined with scrutiny faced by former Australian Tax Commissioner Chris Jordan over past industry associations. [1, 2, 3]

Key Aspects of the Philip Henry Allegations

Parliamentary Tabbing: A 2023 whistleblower letter was tabled before a federal parliamentary committee investigating professional standards and governance at KPMG. [1]
Misconduct Claims: The letter alleged that Philip Henry received secret cash commissions, personal gifts (including a car), and used client trust accounts for personal benefits during his tenure up to 2004.[1]
Whistleblower Settlement: KPMG previously paid a former senior manager a settlement exceeding $500,000 for legal costs related to historic regulatory fallout. [1]
Firm Response: Former KPMG leadership noted that investigating these occurrences from 25 years prior proved extremely difficult due to the passage of time.

Context Involving Chris Jordan

Professional Background: Chris Jordan is the former long-serving Commissioner of Taxation (who led the Australian Taxation Office until early 2024) and a former NSW Chairman of Partners for KPMG. [1, 2]
Scrutiny: Investigations and commentary have explored historical connections and parallel professional service eras within the close-knit Australian accounting and tax sectors during the periods when both men operated inside the major advisory firms. [1, 2]

 "Disobedience, in the eyes of any one who has read history, is man's original virtue. It is through disobedience that progress has been made, through disobedience and through rebellion."

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Whistleblower Brendan Lyon’s court win clears path to challenge big four liability shield

Former KPMG whistleblower Brendan Lyon has won a court ruling that could expose Australia’s most powerful audit and consulting firms to hundreds of millions in uncapped damages.

PwC was embroiled in a tax leaks scandal three years ago. Picture: Gaye Gerard

A landmark costs ruling handed down by the NSW Supreme Court has cleared the way for former KPMG partner Brendan Lyon to press ahead with a legal challenge to scrap the liability protections enjoyed by Australia’s audit and consulting firms.

The ruling comes after KPMG faced a second grilling in Canberra on Friday over its shocking audit scandal that only came to light when a whistleblower’s allegations were aired under parliamentary privilege. A parliamentary committee heard how KPMG’s partners lied in an internal investigation.

In the past six years, the big four have been hit by rolling scandals involving misusing government and corporate documents to win work, cheating on tests (including an ethics exam) and using artificial intelligence to produce client briefs. 

Mr Lyon says this is partly due to a legal structure that protects partners financially and allows them to operate in the shadows.

The former KPMG whistleblower turned academic won a rare protective costs order before Justice Tim Faulkner that caps Mr Lyon’s adverse costs exposure for the case at $25,000. Chartered Accountants ANZ, which opposed the application, had put its own estimated recoverable costs at between $400,000 and $460,000 – a gap that, absent the order, would have left Mr Lyon exposed to a bill capable of ending his case before it reached trial.

A trial should be heard this year, and if Mr Lyon wins, clients and shareholders could pursue KPMG, EY, PwC and Deloitte for the true, uncapped cost of bad advice delivered by consulting or tax arms currently sheltered by the scheme. The damages potentially run into the hundreds of millions of dollars.

Bad advice is not as rare as the public might expect. Mr Lyon argues that’s because the big four are not forced to bear the financial consequences of what they deliver. Their liabilities after insurance drop to $1m per firm in most instances, regardless of the scale of damages. That’s a small amount when spread among 700 or so partners.

“In these settings it is entirely rational for a big four partner to accept big fees to overstate asset values or provide risky tax advice now, because any liability is capped to an insignificant amount that won’t usually emerge until years later,” said Mr Lyon.

“Current and recent litigation involving major accounting firms demonstrates that the losses associated with big four advice can run into the hundreds of millions of dollars.”

Case in point is Lendlease. The company is fighting a $160m amended tax assessment resulting from an alleged “double-dipping” tax scheme by its retirement villages, built on tax advice from Greenwoods & Herbert Smith Freehills, later absorbed into PwC. 

Not only does Lendlease face a massive tax bill, its shares fell 14 per cent the day it revealed its true liability.

Without a liability cap, Lendlease would have a considerably stronger basis to pursue PwC directly for the assessment, interest and associated costs. Shareholders could consider a class action.

Commonwealth Bank ran into similar trouble after Deloitte advised the bank on $100m of research and development tax concession claims tied to its core banking modernisation project. The ATO challenged the claims, forcing CBA to withdraw its Administrative Appeals Tribunal proceedings and settle.

Separately, EY advised on and modelled transactions intended to generate substantial tax benefits for Gordon Merchant, founder of Billabong. The ATO determined the move to be “asset washing.” Merchant is now suing EY and a former EY tax partner for damages arising from the advice.

Lyon’s case alleges the Professional Standards Council failed to consider mandatory matters when reapproving the Chartered Accountants ANZ scheme, and that the scheme unlawfully extends liability caps to non-accountants providing “category 3” – non-accounting – services. That distinction matters enormously: Category 3 services account for roughly 80 per cent of big four revenue, according to Mr Lyon’s own case materials.

Litigation already under way shows how quickly this could play out. Shareholders in Downer EDI are running a class action in the Supreme Court of Victoria through Maurice Blackburn over alleged accounting irregularities and continuous disclosure failures, and have sued KPMG directly as the company’s auditor. KPMG has filed a defence and cross-claimed against Downer EDI.

Should Mr Lyon’s case succeed, plaintiff firms running that action – and others pursuing big four firms over audit or advisory failures – would gain powerful ammunition to argue liability caps should not apply, or should apply far more narrowly, to non-accountant personnel. Litigation funders are understood to be watching the case closely for precisely this reason.

Chartered Accountants ANZ says that its professional standards scheme “plays a vital role in protecting consumers by ensuring access to insurance-backed compensation when a professional services engagement results in a court-awarded damages claim for loss”. 

In a statement, it went on to say the scheme does not limit liability for damages arising from a breach of trust, fraud or dishonesty. 

“As the proceedings are ongoing it is inappropriate to comment any further,” it wrote.

With costs protection secured, the case likely heads to a hearing, where the Supreme Court will determine for the first time the outer limits of who can be covered by a approved professional standards scheme.

Ombudsman warns ATO over bias in tax process

Bias in tax administration has again come to light, with the Tax Ombudsman giving the ATO quite a rebuke.

In its just-published report of a review of the system, the Tax Ombudsman has warned that unchecked bias in tax administration can have serious consequences for taxpayers.

It has found the Australian Taxation Office (ATO) should do more to manage the risk.

The review was initiated after an investigation into historical allegations of ATO maladministration involving bias and prejudice.

It examined whether the ATO’s current processes, guidance and training prevented bias or prejudice from influencing its decisions, particularly where they can significantly affect a person’s livelihood.

A review of the ATO’s management of a complex and long-running case, along with a follow-up review, considered broader systemic risks of bias or prejudice in the ATO’s decision-making and inappropriate disclosures of taxpayer information.

It examined whether the failings identified in the historic case could occur now and whether the ATO’s current controls were effective in mitigating such risks.

Tax Ombudsman Ruth Owen said the review found that while the ATO had strengthened its controls to improve decision-making in response to weaknesses identified 10 to 15 years ago, there remains plenty of room for improvement.

“The ATO has improved how it makes decisions about taxpayers in recent years; however, this review shows there’s more to be done, particularly by explicitly recognising bias as a risk and strengthening controls so they are embedded in the ATO’s everyday processes,” she said.

“Guarding against bias is not a set-and-forget exercise. It requires ongoing vigilance, regular review, and a willingness to continually challenge assumptions as circumstances, data, and risks evolve.

“The community expects the ATO to act impartially, lawfully, objectively and without bias or prejudice, regardless of a taxpayer’s past behaviour or history.

“The ATO’s decisions must always be based on evidence, applied fairly and regularly checked against the risk of bias.”

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Ms Owen said she was also concerned about the ATO breaking its own rules or processes because it believes it is acting in the public interest.

She said she had heard concerns from taxpayers and tax professionals that once a taxpayer is labelled as “bad” it is difficult for them to remove that label, and this could ultimately undermine public confidence in the ATO’s impartiality.

The review found some of the ATO’s processes were not designed to counter bias, meaning staff were not explicitly prompted to consider the risk of bias in their decision-making and to retain an open mind in considering the facts.

Bias and prejudicial conduct can impact tax administration in many ways, she said. For example, officers may depart from procedures or the law to reach a predetermined outcome because they believe they are acting in a “noble cause”.

Alternatively, investigators can give too much weight to past compliance behaviours instead of looking at current evidence with fresh eyes.

“While bias exists in all organisations, the risk is heightened in teams regularly dealing with non-compliance or suspected wrongdoing,” Ms Owen said.

“Strong bias controls are not about second-guessing ATO officers; they are about protecting people from avoidable harm, supporting good decision-making and maintaining public confidence in the tax system.”

The review has made two recommendations to the ATO:

• Assure itself and the community that its controls against bias and prejudice in compliance and enforcement actions and decision-making are working effectively, and
• Develop and implement a plan to address identified gaps in bias controls, including strengthening explicit bias checks, training, assurance guidance, data and monitoring, and the language used in disclosures.

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Given the nature of the topic that was reviewed and the ombudsman’s specific focus on the ATO’s internal controls, it did not seek broad public input for the review. Instead, it undertook targeted consultation with selected tax professionals and associations.

The ATO has accepted both recommendations.

“The ATO welcomes this report and its contribution to maintaining community confidence in fair, objective and evidence-based tax administration,” Second Commissioner of Taxation, Jeremy Hirschhorn, said in the ATO’s response.

“We recognise that public trust in the tax and superannuation systems depends on confidence that ATO decisions are made impartially, consistently and in accordance with the law.

“We are pleased that the review recognises the significant controls already in place within the ATO to support objective decision-making and manage bias.

“We welcome the opportunity to build on those foundations and reinforce community confidence in the integrity of our decisions and actions. The ATO agrees with both recommendations in the report.”

The Tax Ombudsman will monitor the ATO’s progress in responding to her recommendations.

Original Article published by Chris Johnson on Region Canberra.