Sleeping with the enemy: More pork to PwC amid inquiry fallout

July 9, 2024
Price Waterhouse Coopers, in February, gave the Senate inquiry the finger, using their own forced sell-off to dodge accountability. Image: Green Left

The fallout from the Price Waterhouse Coopers (PwC) government-secrets-for-sale scandal continues, the recent release of the final report from the Senate Finance and Public Administration References Committee doing little to hose down the smouldering carcass of PwCs reputation.

Amid excoriating publicity and relentless pressure from the Greens, on March 9 last year the Senate Finance and Public Administration Inquiry into Consulting Integrity was announced.

It uncovered a catastrophic public integrity fail with PwC caught selling government tax-law secrets to private clients.

In May last year the Greens asked Labor in Parliament if it would refer PwC to the freshly-minted National Anti-Corruption Commission (NACC).  

In an astonishing abrogation of his integrity-in-politics mantra, Prime Minister Anthony Albanese declined, saying the Australian Federal Police (AFP) was already investigating.

Greens leader Adam Bandt labelled Albanese’s response “a cop out” with inquiry member South Australian Greens Senator Barbara Pocock noting that the AFP first saw the PwC matter “five years ago” and still had no result.

It’s a bad look when the AFP have already faced serious Senate questions about conflicts of interest with PwC and, last week, raided and suspended a veteran AFP Commander over separate contracts-for-mates allegations.  

Pork rorts reports

The first report into PwC, in June last year, titled “PwC: A calculated breach of trust” gave a timeline of events stretching back to PwC’s original 2013 contract.

It included PwC’s heavily redacted responses to Questions on Notice that sought the name, rank and serial number of all those partners, executives and employees knowingly involved.  PwC refused to provide them.

By February, PwC was a dumpster fire. 

While Labor scrambled for cover, PwC came up with a plan and agreed to sell off its government consultancy business for $1 to Allegro Funds,  a private equity juggernaut.

Allegro Funds immediately formed Scyne Advisory to take over PwC’s government consulting business.

The Board and leadership of Scyne Advisory includes ex-PwC partners and executives. But, with no list of names, there is no way of knowing who is compromised.

On January 11, the Senate inquiry sought details of all public sector contracts PwC held with the APS and state and territory public sector from 2013–2023.

In its response in February, PwC gave the inquiry the finger, using its own forced sell-off to dodge accountability and the Senate’s question.

It said: “In November 2023, PwC Australia divested its federal and state government consulting business to Allegro Funds. As a result of this transaction, much of the information requested either relates to individuals no longer with PwC Australia, or is confidential and commercially sensitive information.”

The second interim report from March titled “PwC: The Cover-up Worsens the Crime” noted PwC’s leaking of new tax-law start dates to private clients. This time PwC gave the committee and the taxpayer both fingers, again refusing to provide the names of the compromised.

New revelations overshadow final report

On May 6, Crikey revealed the “gravy train” had refuelled and again left the station, with a $700,000 contract to PwC Indigenous Consulting.  

Then on May 30, a Klaxon investigation revealed PwC and Scyne Advisory are currently undertaking 46 federal government contracts, valued at $138 million, noting that figure only included contracts listed on the AusTender website, meaning that the total is likely much higher.

Finally, on 12 June, after 14 months, over 60 submissions and 10 days of hearings, the final report of the Senate’s Management and Assurance of Integrity by Consulting Services inquiry was released.

It made 12 recommendations starting with: Recommendation 1: (7.12) that: “… PwC publish accurate and detailed information about the involvement of PwC partners and personnel (including names and positions) in breach of confidential government information.”

Others include better disclosure data on consultancy spending, new rules about acting in the public interest and updating training and contract management manuals: presumably to include that treason is bad and how to not to lie about an already lucrative public contract.

Not good enough

The report has been labeled a “whitewash”, and there is speculation PwC may have consulted on the recommendations.

Greens Senator Barbara Pocock told the ABC she remains disappointed the recommendations don’t go far enough. They do not address the magnitude and scope of the problems this inquiry has uncovered … they do not address the issue of political donations by big consultants, the revolving door … inadequacy of penalties for PwC, the pressing need for structural reform to cap big partnerships’ size, and to address conflicts of interest and the opaque nature of big partnerships.”

As partnerships, they are not regulated the same as corporations and with the corporate cop Australian Securities and Investments Commission (ASIC) now in shreds, it might not have helped if they were.

The government is now stuck in a toxic relationship with PwC, unable to extract even a basic list of names of significantly compromised people who may still be working directly for the government.

What happened at PwC is the entirely predictable result of the once-proud Australian Public Service being sacrificed at the altar of the budget surplus unicorn for the politically expedient, but false, economy of outsourcing to the private for-profit sector.

With PwC back on the public payroll there seems little hope of real reform, and the government finds itself sleeping with the enemy with nowhere else to go.

[Suzanne James has a background in writing policy, governance, risk management and regulatory compliance frameworks and in legislative compliance application.]

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