Former PwC leaders point fingers over legal privilege abuse
A parliamentary committee on Friday heard the firm falsely claimed privilege to obstruct the ATO’s investigations into tax partners’ misconduct.
A fresh round of finger-pointing over the PwC tax debacle broke out on Friday as a parliamentary committee grilled former chief executives and general counsel about the disgraced firm's stonewalling during Tax Office inquiries.
Past and present employees fronted a bipartisan committee on corporations and financial services to answer more questions about the firm's internal dynamics and decision-making processes after learning tax partners leaked confidential tax briefings to clients.
Conflicting accounts from key figures including former CEOs Tom Seymour, Luke Sayers and general counsel Meredith Beattie quickly emerged when committee members pressed them on PwC's legal professional privilege (LPP) claims.
Beattie, speaking publicly for the first time since the scandal broke, said PwC had abused LPP to prevent the ATO from accessing key documents as part of its investigations but insisted she was the one “rattling the can” and alerting the executive board.
"Certain parts of the tax group had not been following the protocols, they had not been following the legal engagement letters, and the effect of that meant that the privilege claims that had been made ... were not valid,” he said.
Beattie said the ATO had raised “very serious allegations” about PwC using privilege in a way designed to hide matters from the Tax Office, causing a “a very, very tense relationship”.
Labor senator Deborah O’Neill asked: “Whose brilliant idea was it then to institute this as a strategy? Because it was clearly a strategy – who was responsible for signing off and determining that PwC would seek to frustrate the ATO by claiming LPP in a manner that you’ve described as not following protocols?”
In response, Beattie alleged Seymour, the head of financial advisory and tax at the time, was responsible for tax partners abusing LPP.
“The leader of the tax group at the time was Mr Seymour,” she said, adding that she recommended against Seymour's elevation to CEO as a result of her concerns.
But Seymour said Beattie alone was responsible for the document production process.
“I reject [Beattie’s] propositions … there was significant tension between myself and Ms Beattie about the fact that we were not getting documents delivered in satisfaction of the Tax Office. I have a view that our legal response was not run well, and that we were too legalistic,” he said.
Sayers, who was in charge of the firm at the time of the tax leaks, said he did not recollect Beattie’s version of events.
“She may have provided it to the governance board, but I do not recall any legal advice being provided,” he said.
However, he added that if Beattie said she did, “then I’m sure she did”.
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