Australia’s government has referred the PwC tax leaks scandal to the country’s federal police, asking the force to consider opening a criminal investigation.
It is an escalation of a scandal that has led to the head of PwC’s Australian business stepping down and efforts by the Big Four firm’s international bosses to prevent the case spiralling into a global reputational crisis.
PwC had received information about planned changes to Australia’s tax rules because Peter Collins, its former head of international tax in the country, had been on an advisory group to the government’s Treasury department.
Emails released this month showed how PwC drummed up business from multinational clients, including US tech groups, using confidential government information received by Collins about a planned clampdown on tax avoidance.
A small number of partners, including the chief executive of PwC Australia, have stood down over the affair, but politicians have remained frustrated that more information about other partners who received the information and the clients that benefited have yet to be released.
In a statement on Wednesday, Australia’s Treasury said Collins had “improperly used confidential Commonwealth information”.
It said that the emails published this month “highlighted the significant extent of the unauthorised disclosure of confidential Commonwealth information and the wide range of individuals within PwC who were directly and indirectly privy to the confidential information”.
“In light of these recent revelations and the seriousness of this misconduct, the Treasury has referred the matter to the Australian Federal Police to consider commencement of a criminal investigation,” it added.
The names of the PwC partners and staff involved in the emails were redacted before being released by a senate committee, but the recipients included people in the firm’s US, UK and Irish businesses. The recipients included senior partners from PwC’s international network, some of whom had responsibility for large clients, said a person with knowledge of the matter.
Collins has already been banned from practising as a tax agent in Australia for two years.
He had signed strict confidentiality agreements with the Treasury in order to participate in the discussions over potential changes to laws in Australia related to tax avoidance by multinational companies.
Following the scandal, the government has moved to strengthen the powers of the industry watchdog to crack down on potential conflicts of interest and has introduced rules that require suppliers such as PwC to disclose any breaches or conflict of interest related to government contracts in the future.
Andy Schmulow, an associate professor at the University of Wollongong’s school of law, said some politicians and the tax authorities were “sick to the back teeth” of the sort of behaviour that PwC’s Australian arm had engaged in. He said the consultant had acted as a “fifth column” in that he was able to not only receive the confidential information, but had also influenced the shape of the new tax laws before his firm worked with the very companies the rules were intended to crack down upon.
PwC Australia said: “We note the statement from the Treasury secretary and will continue to co-operate fully with any investigations into this matter.”
Collins has not responded to requests for comment since the scandal emerged.
The firm’s Australian business and its international operations have both commissioned external reviews.
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