PwC leaks: How confidential tax information was shared at PwC ...

However, the disclosures were not used to market to clients, but these reports appear generally to have been shared for “collecting input on the proposals for the purposes of responding to the Treasury consultation”.

While PwC marketed services to sidestep a federal government tax avoidance law within hours of its announcement in the April 2015 budget, the report did not find any breach of confidentiality in this.

However, it says that Mr Collins did breach confidentiality on August 5, 2015, when he sent emails to two internal lists confirming the regime would come into effect from January 2016.

The document shows there was a culture within parts of PwC of sharing confidential government information with the firm’s tax division, regardless of whether a specific confidentiality agreement had been signed.

It also highlights how weaknesses in PwC’s internal processes meant it took four years before the firm’s top leadership were properly briefed that Mr Collins was being investigated for sharing confidential information.

Mr McNab said he was “angry and disappointed” that PwC named him in the document “without warning and without any due process”.

“I have offered to meet with PwC’s preferred law firms, KWM and Allens, on four separate occasions to provide important information that would render its allegations against me unsustainable,” he said. “Those offers were all ignored, yet the allegations were repeated, without any qualification.”

Mr Bersten said the document showed he had nothing to do with the tax leaks scandal.

“I am relieved to see that the firm has made it clear that I was not involved in the Collins matter,” Mr Bersten said. Comment was also sought from Mr Collins, Mr Calleja and Mr Seymour.

The firm commissioned the three legal reports, along with a separate report by former Telstra chief executive Ziggy Switkowski, in response to revelations in The Australian Financial Review about the extent of its tax leaks scandal.

The Switkowski review, which was also released on Wednesday, blamed the tax leaks matter on PwC Australia’s “shadow” culture that tolerated bad behaviour in the pursuit of profit “growth at all costs”, and a lack of governance that “went unexamined and uncorrected for many years”.

The firm’s version of events, drawn from the legal reports, stated Mr McNab emailed at least one multinational (reported elsewhere to have been Google): “January 2016 remains likely with Treasury pushing for October passage through Parliament to law. Various other updates we can chat about if you get a moment.”

“Mr Collins should not have disclosed that information internally,” the PwC report says. “Further, the use of that information by Mr McNab to market tax services to clients was a conflict of interest and an additional breach of confidentiality.”

It is believed that PwC partners in the UK and the US received the OECD documents from Australia.

The report details separate leaks by three unnamed partners who provided confidential consultations on GST payments on digital currencies; the Black Economy Task Force Reference Group; and the Tax Treaty Advisory Panel.

The report refers to an unspecified number of PwC personnel who received what they understood to be confidential information who took no steps to report the breach.

PwC’s report details a series of misunderstandings over four years which left the firm’s senior ranks unaware that Mr Collins had breached confidentiality.

It says that shortly after the Tax Office obtained emails in October 2017 which showed that Mr Collins had breached confidentiality, PwC’s risk team noted an email Mr Collins sent on September 17, 2015, about a meeting with the Board of Taxation about hybrids.

While Mr Collins had not signed a confidentiality agreement, the Board of Taxation had stated in its invitation, “We would appreciate if you kept your participation in this targeted consultation session confidential at this stage.”

When questioned about this in 2017, Mr Collins reportedly told PwC that he had not signed a confidentiality agreement, and the PwC report says there was no evidence the matter had been taken further.

On August 29, 2019, Second Commissioner Jeremy Hirschhorn in a spirited exchange with the firm’s CEO, Luke Sayers, advised him to “personally review the internal emails”. Mr Sayers has said he has no recollection of this.

Minutes of PwC’s governance board meeting on September 3 state that Mr Sayers outlined matters raised with him by the ATO the previous week.

Notes prepared for the meeting refer to “a recent discussion that Luke had with the ATO in relation to its concerns about the firm” and a reference to “a PwC Australia partner (not identified) who sat in on confidential Treasury discussions and also disclosed confidential information in a commercial way”.

While PwC could not determine whether the ATO raised the confidentiality issues with Mr Sayers, “it is clear that the ATO raised these issues with someone within PwC Australia in 2019, and in October 2019, leaders within the tax practice met to discuss Mr Hirschhorn’s concerns”.

A memo before that meeting summarised three emails identified by the risk team as most likely to have raised the ATO’s concerns. These were the 2015 Board of Taxation email previously identified in 2017, and two other emails relating to Treasury and ATO meetings, which were described as not being part of any formal process.

The memo said Mr Collins again confirmed he was not required to sign a confidentiality agreement for either meeting.

There the trail runs cold. The legal teams could find no evidence of any other investigation of the emails issue, or follow up with the ATO to confirm they were looking at the right emails.

So, it was not until March 2021 after the Tax Practitioners Board notified Mr Collins and later PwC itself, that it was investigating breaches of confidentiality, that PwC’s office of general counsel identified Mr Collins’ confidentiality agreements.

Even then, it was not until May 2022 that the risk committee of the governance board received its first substantive update on the TPB, and the full governance board was updated only in September 2022, a month before the TPB made its findings.

“As PwC’s then-CEO, Mr Seymour had direct involvement and oversight, together with PwC Australia OGC, in the handling of the matter,” the report says.