PwC’s acting head has apologised for the consulting giant’s betrayal of the trust placed in it and stood down nine staff including senior partners as it works to contain the tax leak scandal.
Prime Minister Anthony Albanese said the country deserved full transparency over the leak, saying what occurred was unacceptable.
In December, the Tax Practitioners Board found former PwC partner Peter Collins had repeatedly leaked confidential information to senior PwC staff about federal government plans to combat tax avoidance, for the company’s benefit.
The inquiry came to public light earlier this year, but a 144-page document tabled in Senate estimates on May 3 showed dozens of staff were involved or had knowledge of the confidential information.
In an open letter on Monday, PwC Australia acting chief executive Kristin Stubbins apologised for the firm’s behaviour, and said the company had failed in three ways.
“I want to apologise on behalf of PwC Australia. For sharing confidential government tax policy information and for betraying the trust placed in us,” she said.
“Specifically, I apologise to the community; to the Australian government for breaching your confidentiality; to our clients for any questions this may have raised about our integrity and trustworthiness; and to the 10,000 hard-working, values-driven PwC Australia partners and staff who have been unfairly impacted.”
Stubbins said while investigations were still under way, the company knew enough about what went wrong to take some immediate action. She acknowledged the situation was “completely unacceptable”.
“No amount of words can make it right. But I am fully committed to taking all necessary actions to re-earn the trust of our stakeholders. And, as we work through this process, I am committed to being fully transparent,” she said.
Stubbins said there had been a clear lack of respect for confidentiality, the firm did not have adequate governance processes in place, and there was a culture in the firm’s tax business that had allowed inappropriate behaviour.
PwC has directed nine partners to go on leave immediately pending the outcome of an internal investigation into the leaks. The chair of PwC’s governance board and its designated risk committee have also decided to step down from their roles.
The moves come on top of previous actions taken by the firm. Tom Seymour stood down as chief executive on May 8, two executive board members stood down from their leadership positions, and a review of the firm’s governance and culture began earlier this month.
The final report from the investigation, which is being conducted by former Telstra CEO Ziggy Switkowski, will be released in full in September.
A criminal investigation into the scandal was launched last week and the head of the Finance Department revealed the firm was ordered to remove all staff with links to the incident from government work.
On Monday morning, Albanese said it seemed clear that neither the previous government nor the Department of Treasury had any knowledge of the leak.
“I think all of this should become public at the appropriate time. Of course, there are investigations under way and I don’t want to say anything to interfere with those processes,” he said on 2SM radio.
“But quite clearly, what went on there is completely unacceptable.”
When asked if the names of the partners involved in the scandal should be publicly released, Albanese said the Australian Federal Police was investigating.
“I don’t want to pre-empt any of those processes. I think in the fullness of time, of course, there needs to be proper transparency about all of this,” he said.
Last week in Senate estimates, Greens senator Barbara Pocock tried to table a list of 36 PwC partners who had knowledge of the leak. Both Pocock and Labor senator Deborah O’Neill questioned how the Finance Department could trust the company to remove all staff involved if the government did not know the names of those partners.
But Stubbins said the company believed the “vast majority” of staff who received emails relating to the leak were not knowingly involved in or responsible for any confidentiality breach.
“We have and will continue to take appropriate action against anyone who is found to have breached confidentiality or failed in their leadership duties,” she said.
The Finance Department has also in effect banned the consulting firm from gaining future government contracts, after issuing a directive that any government department must consider the “previous behaviour, including ethical conduct” of all companies when making procurement decisions.
Asked on Monday whether PwC should be banned from any government work, at least for a period of time, Albanese said its behaviour needed to be considered.
“Well, certainly what we have said is that any government department undertaking work needs to bear in mind the ethical considerations that come from this PwC behaviour,” he said.
This week, top officials from Australia’s financial regulator and the Tax Office will be questioned in Senate estimates about what they knew of the scandal and the Tax Practitioners Board investigation, and what is being done to prevent such behaviour from occurring again.
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