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Two former PwC partners on the Tax Practitioners Board (TPB) did not recuse themselves from a meeting where the board's investigation of PwC was discussed, a Senate committee has heard.
The committee heard one of those former partners, Peter Hogan, was in regular contact with Coalition MP Michael Sukkar, who at the time was the minister in charge of the regulator and who had also previously worked at PwC.
Mr Hogan and fellow former partner Judy Sullivan were present at a TPB meeting when then-Australian Tax Office (ATO) commissioner Chris Jordan unexpectedly lashed the board over the conduct of its investigation. The committee heard they did not leave despite what the TPB chair accepted was a "self-evident" conflict of interest.
The TPB was investigating former PwC partner Peter-John Collins over allegations he had misused confidential government information about multinational tax laws.
In January 2023, it concluded that he had, and deregistered him. The scandal eventually implicated dozens of PwC partners.
Michael O'Neill, the TPB's CEO, confirmed to the committee that he believed there was a push from ATO leadership and members of the TPB board to sack him over how he handled the PwC investigation, saying a report to that effect published in the AFR yesterday was "true".
The report suggested that board members had met without Mr O'Neill being present to discuss how to remove him from his job.
It also claimed the ATO had launched an internal bullying investigation against Mr O'Neill which was never substantiated and was ultimately dropped.
In March 2022, Mr Sukkar announced he would move to give the TPB chair the power to sack the CEO, a change which required the ATO commissioner's support. The proposal did not ultimately proceed due to the change of government that May.
ATO second commissioner Jeremy Hirschhorn told the committee this morning that the change would have applied to future CEOs, but not to Mr O'Neill. But Mr O'Neill then directly contradicted that and said he had been shown a draft contract that would have allowed him to be sacked had the legislation changed.
No allegation of wrongdoing was made concerning Mr Sukkar. The board promised to provide the committee on notice with evidence about whether Mr Sukkar knew about the investigation, but no such suggestion was made today.
The PwC scandal
In January 2023, the TPB deregistered Peter-John Collins, a former tax partner at PwC.
The TPB's investigation found Mr Collins had improperly used confidential government information when he participated in consultations on stricter multinational tax laws.
Mr Collins, with the knowledge of dozens of PwC partners, took steps to use that information to help clients get around those same laws.
The ATO had known about the allegations for several years and had asked the Australian Federal Police to investigate in 2018, but it did not do so. The AFP is now investigating.
Former chief executive Tom Seymour resigned last year over his handling of the fallout of the scandal.
PwC 'disdaining the parliament', senator says
The Senate committee, led by Labor senator Deborah O'Neill, Greens senator Barbara Pocock and Liberal senator Richard Colbeck, is focused on the integrity and management of consulting firms and has held several months of hearings.
The senators also raised ongoing concerns today about PwC's respect for regulators and transparency over the Collins scandal.
The firm has refused to provide the names of the so-called "dirty six" partners based outside Australia who had knowledge of Mr Collins's misbegotten information.
PwC Australia's new CEO, Kevin Burrowes, told the committee today this was because PwC International would not provide the names.
Senator Pocock said the firm was treating the committee "like mushrooms".
"PwC is disdaining the parliament, that is what you are doing," she said.
PwC said it did not plan to take any action against the two former partners, Mr Hogan and Ms Sullivan, whom she accused of mismanaging their conflict of interest on the Tax Practitioners Board.
As former partners, the committee heard both were still in receipt of a $140,000-a-year lifetime allowance.
"They're entitled to their pension payments," Mr Burrowes said when asked if the payments would be ceased.
"The potential for conflict that exists is for the TPB to determine… we can't control our former partners."
But Mr Burrowes said the firm was not paying Peter-John Collins, or fellow ex-partners Michael Bersten, Neil Fuller or Paul McNab, who the firm named as involved in the confidentiality breaches.
Mr Burrowes also told the committee the newly-formed company Scyne, the firm's spun-off consulting arm, was still using the same technology systems as PwC, but insisted it was a separate company.
He said there was no revenue guarantee in place for the new firm. "We are out of the government consulting business."