“PwC in the firing line and AFP drawn in as Senate asks hard questions about conflict-of-interest drama” —

• “PwC gets paid millions to get companies and governments out of trouble, but it’s in the middle of an international crisis after a former tax partner used confidential Treasury information to make millions for the consulting firm.”
• “‘PwC was brought in as a trusted adviser and expert to help shape [new] laws,’ says columnist and author Tom Ravlic. ‘They’ve taken that knowledge and then used it to undermine them almost immediately.'”
• “Now PwC Australia’s biggest client — the federal government — is seething.”
• “About a decade ago, the government asked PwC tax expert Peter-John Collins to help it design laws to better tax multinational companies. Large companies, particularly tech giants, were shifting profits from higher-taxing countries like Australia to others like The Netherlands and Singapore with lower tax rates.”
• “Mr Collins signed multiple confidentiality agreements, specifying the knowledge could not be disclosed. But he shared the secret knowledge within PwC, helping the firm create a system for those companies to avoid paying the new taxes.”
• “The company used the scheme to make money and win new clients, then gloated about it. The Tax Practitioners Board was damning in its assessment of Mr Collins, saying he ‘did not act with integrity’ and disqualifying him from working in the field for two years.”
• “The board said he signed multiple confidentiality agreements and it was clear the Treasury information was being disclosed on a confidential basis.”
• “But will there be criminal or civil charges? That’s unclear, according to UNSW business law expert Dr Scott Donald. That’s because the allegation so far is that PwC benefited from a breach of a confidentiality agreement. An agreement we haven’t seen.”
• “So far, all we know is that PwC won $2.5 million in fees from new clients when it marketed the arrangements. (There is no suggestion the clients were aware of how the information was obtained).”
• “Dr Donald says that’s underquoting what probably occurred, because the firms create value by having close relationships with government and ‘being able to interpret, anticipate, perhaps even influence the way that government sets up various regimes, whether it’s tax or other sorts of (policy) and then being able to then sell that information that knowledge off to their clients. ‘So the profit that they make isn’t $2.5 million. It’s actually much larger than that, because they have a whole business. This is what they do.'”
• “People working in finance are blown away by the scandal, because there are clear rules about confidentiality and managing conflicts of interest — particularly when you have your hands on other people’s money.”

“Warnings raised as PwC paid $8.7m to collect Australian aged care data while helping to set industry prices” —

• “The Consultancy firm PwC will be paid $8.7m to collect sensitive commercial data from aged care providers while helping the Australian government set new service prices, despite simultaneously charging the industry for advice on pricing.”
• “Senators and unions have warned the contract, which could give PwC access to protected pricing information subject to secrecy provisions, is fraught with potential conflicts of interest that may be difficult to avoid.”
• “PwC will collect ‘cost and activity data’ from facilities across the country and develop a new costing framework for the federal government.”
• “At the same time, another division in PwC is selling consultants to the aged care industry who can ‘benchmark your organisation against others in the industry,’ or ‘assist service providers to remain viable and accountable to their service costs and pricing.'”
• “PwC’s work with government is under renewed scrutiny after the global firm allegedly profited from sharing confidential government tax policy with clients. This $8.7m contract with IHACPA was signed days before those allegations were first published by the Australian Financial Review.”
• “The government spokesperson said PwC was required to immediately disclose any conflicts of interest and failure to do so could result in the contract being terminated. But Rice said relying on PwC to disclose conflicts of interest was not an adequate response given its extensive work with the aged care industry.”
• “A PwC spokesperson would not comment on the IHACPA contract, but stressed the firm had ‘strict conflict and risk management processes’ that were ‘always followed rigorously before an engagement is commenced.'”
• “In a submission to an ongoing inquiry into the government’s use of consultants, PwC’s chief executive, Tom Seymour, apologised for the tax policy breach reported in January. ‘We have taken extensive steps to both raise awareness of the significance of these issues across all partners and staff in the firm and have invested further in policies and training which address these matters to protect against future recurrence,’ Seymour said.”

“Climate Authority Under Fire for Conflict of Interest After PwC Scandal” —

• “The Minister for Climate Change and Energy has been urged to review potential conflicts of interests at Australia’s key climate change agency in light of the integrity scandal at PwC and the consulting services sector.”
• “In a letter to Minister Bowen, the Australia Institute has raised concerns regarding appointments to the Climate Change Authority (CCA) and highlighted legal questions raised by potential conflicts of interest held by CCA board members, including the chair of the agency, Grant King.”
• “Australia Institute research has revealed the extensive overlap between industry and government in Australia, and the risk this puts to independent policymaking. The senate inquiry raises the question of whether scrutiny must go beyond consulting firms being employed by government agencies, to conflicts of interest within government agencies themselves.”
• “‘We believe there are serious integrity questions regarding conflicts of interest at the highest levels of climate policy making in Australia,’ said Polly Hemming, Director of the Climate & Energy Program at the Australia Institute.”
• “‘The PwC scandal and the Inquiry into consulting services has shown us that potential conflicts of interest are not always disclosed, let alone managed… The public should have access to a transparent register of declared interests by statutory officials. Then they could decide whether conflicts were being managed appropriately or not.'”