PwC Australia gave clients other than Google confidential tax info

PwC Australia gave multiple clients confidential information leaked from Australian government tax briefings, the company said on Wednesday, the first admission that clients other than Google received leaked government tax plans. A former partner at the "big four" firm in 2015 gave two clients confidential information about the start date of a new tax law targeting multinational companies, PwC Australia said on Wednesday. "Various other updates we can chat about if you get a moment," the former partner wrote in an email to an unnamed multinational client.

Reuters in July revealed one of the clients PwC Australia shared confidential information with was Google but the company declined to name any clients in the report, citing confidentiality. The firm says clients were not told the information was confidential. The revelations are part of a "statement of facts" published by the firm in response to a national scandal first triggered by the revelation a former partner had leaked confidential tax documents to colleagues to drum up work with global companies.

However, the 17-page document reveals a series of previously unreported leaks by other partners, many who remain unnamed, from government consultations on topics including the taxation of digital currencies and the "black economy."

In 2017, a former partner leaked a confidential Treasury paper on a tax instrument of the Organization of Economic Cooperation and Development to colleagues and an unnamed client.

First revealed in January by tax regulators and stoked since by a drip-feed of new information, the scandal has forced out 12 partners, including the chief executive, prompted public and private sector clients to freeze ties and entangled clients other than Google, including Uber and Facebook.

NO QUESTIONS RAISED

Confidential information was also shared with PwC staff outside of Australia as shown in a cache of 144 pages of PwC emails publicly released in May, including a 2016 mail mentioning a "north American project" aimed at large U.S. technology firms.

On Wednesday, the global PwC network published a short statement saying that a review by law firm Linklaters found no staff outside Australia used any confidential information for commercial gain and that most staff outside of Australia did not know the information provided was confidential.

However, six individuals, who were not named and whose roles were not given, "should have raised questions" about whether the information was confidential.

PwC said it had taken "appropriate action" against those individuals "to the extent" that they are still with the firm, without elaborating.

GOVERNANCE OVERHAUL

The statement of facts was released along with PwC Australia's announcement on Wednesday of a major governance overhaul after an external review found a "whatever it takes" approach to making money made it harder for staff to call out misbehavior.

The governance review, commissioned by the firm in May, identified poor practices "uncorrected for many years", including a board stacked with longstanding PwC partners and a powerful CEO "not perceived to be accountable to the board".

The partnership's "overly collegial" culture made staff reluctant to call out misbehavior, especially from "rainmakers" who were described as "untouchables" to whom "the rules don't always apply", the review also found.

"The AU partnership operates largely from a profit seeking perspective, sometimes at the expense of ethics and doing what's right. I do not believe this aligns with our values," a staff member is quoted as saying in a 2021 survey included in the review.

PwC Australia said on Wednesday it would adopt, and in some cases already had, the report's 23 recommendations, which include appointing an external chief risk officer, revamping firm culture, and linking partner pay to ethical behaviour.