PwC, a prominent accounting firm, has been embroiled in a scandal as it has been revealed that one of its partners provided inside information to Google regarding the timing of a controversial Australian tax law.
The partner, who also served as an adviser to the Australian government, shared details of upcoming laws with colleagues at PwC, who used the information to solicit business on the US West Coast. Internal emails obtained during an investigation by Australian lawmakers uncovered the extent of the collaboration.
In August 2015, a PwC partner sent an email to a Google employee, informing them that Canberra would proceed with a tax clampdown on multinationals the following year, despite pressure to delay the legislation. PwC disclosed the email to lawmakers last month, with the company's name redacted. However, Google has now confirmed that it was the recipient of the information.
While Google expressed disappointment in PwC's inappropriate sharing of information, it maintained that it did not impact the company's compliance with the Multinational Anti-Avoidance Law, referring to the 2015 legislation. Google stated that changes to its tax structure in Australia were made after the law was passed and following direct engagement with the Australian Taxation Office, rather than solely relying on PwC's advice.
The scandal has had significant consequences for PwC's Australian business, resulting in the loss of government-affiliated clients, including major pension funds and the Reserve Bank of Australia. The firm continues to face scrutiny from lawmakers. PwC has implemented leadership changes in Australia in an attempt to mitigate the reputational damage caused by the scandal. Former CEO Tom Seymour resigned in May after admitting to receiving emails containing confidential information. As a result of an internal investigation, PwC announced that eight partners have left or will be leaving the firm.
To protect its contracts from the fallout, PwC Australia sold its government consulting business for a nominal A$1. The firm has emphasized that its clients were not involved in any wrongdoing and stated, "no confidential information was used to enable clients to pay less tax."
Internal correspondence revealed in the parliamentary investigation showcased discussions within PwC regarding confidential information provided by former tax partner Peter Collins, based on his advisory work with the government. The emails celebrated new business in North America, attributing its success to the accuracy of the intelligence provided by Collins. The Australian tax partners at PwC collaborated extensively with other PwC firms worldwide, including those in the United States, Netherlands, and Singapore.
By fLEXI tEAM