PwC’s investigation reveals further confidentiality breaches
The documents released by PwC following internal investigations into its government tax scandal have revealed further confidentiality breaches, potentially hampering the firm’s efforts to move on from the affair.
Professional services firm PwC will be hoping – both in Australia and at the global level – that the release of its independent report into culture and governance and the firm’s embracing response will help to draw the latest line under its government tax scandal, yet the materials have quietly revealed further confidentiality breaches.
“We take full accountability for our shortcomings and the culture in our firm that allowed them to go unchecked over time. From the top down, we are committed to rebuilding and re-earning the trust of our stakeholders,” stated CEO Kevin Burrowes, who was brought in from overseas to replace ousted former chief Tom Seymour.
“We are committed to learning, changing, and leading. This is our promise to our people, our partners, our clients and our communities,” Burrowes added.
However, there was little mention of its further failings. Alongside its ‘Action Plan’, the firm has also released a detailed ‘Statement of Facts’ addressing the events which occurred as well as other findings from its internal investigations. In addition to the previously admitted sanction of a partner who had set up a client exclusivity agreement without adherence to PwC’s conflict of interests standards, the document outlines a number of other, unrelated breaches.
As a brief outline, one former partner was in 2016 found to have breached a Treasury confidentiality agreement in respect to GST consultation on digital currencies, by forwarding the information to colleagues who weren’t subject to the gag.
A year later, another partner, also departed, shared info from the Treasury’s Black Economy Taskforce to a fellow partner, while ex-partner ‘C’ committed ongoing breaches as a member of the department’s Tax Treaties Advisory Panel dating back to 2012.
It’s possible to in part deduce who these unnamed accused are with reference to those publicly named and pushed out of the firm for having some involvement or failing in their leadership responsibilities over the headline breach, and the names and other details that do appear in the ‘Statement of Facts’. For example, former financial advisory managing partner Pete Calleja is also said to have signed a confidential ‘acknowledgment’, while Seymour received direct emails on the matter.
Through its investigations, the firm also identified and outlined a number of other potentially unethical breaches, which sat somewhere in a grey area, stating: “Confidentiality expectations and commitments varied among various consultations and in some cases there were none. As a result, in some instances it has not been possible to determine whether the disclosures constituted a breach of a confidentiality because it is not clear from the documents whether a commitment or expectation applied.”
At the global level
Meanwhile, against the backdrop of the Australian government looking to introduce massive fines for large, globally-related entities found to be breaking local tax advisory laws, PwC’s global organisation has chosen the same day as its Australian arm’s report release and response to reveal the findings of its own international investigation, led by law firm Linklaters.
The result: all overseas partners are cleared of serious breaches, with just six ‘disciplined’ for not being more inquisitive.
“With respect to those PwC people who did receive confidential information from PwC Australia, most did not know the information was confidential,” the firm stated, in a brief, vaguely worded response to Linklater’s findings that no-one involved benefitted commercially. “However, the review found that six individuals should have raised questions as to whether the information was confidential. To the extent that they are still with PwC, their firms have taken appropriate action.”
Noting there are always lessons to be learned, PwC Global chair Bob Moritz stated: “The unauthorised sharing of confidential information and related leadership failings are completely unacceptable and go against PwC’s culture and values. At the same time, I want to acknowledge the important steps that PwC Australia has taken to date as well as the actions outlined in their Management Response, which clearly demonstrate a commitment to change.”
In a predictable, but reasonable response in respect to PwC Australia’s admission of being slow to react and adopting obfuscatory tactics, Greens senator Barbara Pocock was having none of it. “The review found that six PwC operatives located outside Australia should have raised questions but they won’t tell us who they were and what repercussions they faced. The statement fits neatly into the damage control strategy the firm has relied on to quell the international outrage at this fiasco.”
