Rather than trying to avoid conflicts of interest, consultants and professional service firms are infiltrating governments globally to exploit them and “drum up business”, Australian senator Deborah O’Neill has claimed.
Ms O’Neill spearheaded the investigation into the leaking of highly confidential government information by PwC Australia, a scandal into which the Irish arm of that Big Four consulting firm was dragged. She says the controversy shed light on the murky world of corporate consultancy and the “hollowing out” of the public sector in western countries.
PwC is under fire globally because of a scandal involving former partner and head of international tax Peter Collins. While advising the Australian government on anti-tax avoidance laws, he shared confidential information with colleagues, who won business on the back of it.
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The information relating to Australia’s so-called Multinational Anti-Avoidance Law was shared with PwC personnel in several countries including Ireland.
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Ms O’Neill said the firm used the information to generate business and sell “tax avoidance schemes” to some of the biggest companies in the world. One of Mr Collins’s colleagues was found to have emailed a Google employee to confirm the likely start date for the Australian government’s new tax law.
The controversy has engulfed the firm’s Australian operations forcing its chief executive Tom Seymour to resign while threatening its business in other locations, including Ireland. In an attempt to limit the fallout, PwC Australia recently sold its lucrative government consulting arm for one Australian dollar (€0.60).
Speaking on a visit to Dublin, Ms O’Neill said PwC Australia “breached every professional standard” in its dealings with the Australian government, proving itself “completely untrustworthy” in the process.
She claimed that the excessive use of consultants by government and/or the infiltration of government by the Big Four and others had led to a “hollowing out of capacity in the public sector”.
“When we started this work, I thought there were problems with conflicts of interest; now I think seeking opportunities to exploit conflicts of interest is actually the business model” of these firms, she said.
“There is no integrity ... that is the business model ... find every possible person to create a relationship ... have a revolving door of people coming in and out of the public service and into your partnership. PwC had that revolving door of knowledge, information and relationships land and expand and that’s exactly what we’ve seen,” she said.
Abuse of privilege?
PwC, like many large consultancy firms, is paid by governments worldwide to provide policy advice. A necessary part of that is that they are given access to confidential information. At the same time, divisions within the group charge firms to advise them on possible changes in their sectors.
Australia’s Tax Practitioners Board released a 144-page cache of PwC emails detailing the companies to which PwC had given confidential information about Australia’s anti-avoidance laws to politicians investigating the scandal. The information was subsequently publicly released with the names of the companies that received the confidential information redacted.
Australian tax officials told its domestic parliament in May that they foiled several attempts by unnamed multinational firms to subvert the multinational anti-avoidance law, months after confidential information had leaked.
