PwC told to purge
The federal finance department has instructed PwC to “stand down” any personnel involved or knowledgeable about recent leaks from all government contracts.
The Albanese government is ramping up its response to the scandal, with Department of Finance secretary Jenny Wilkinson sending an email to senior executive staff this week , outlining the government's plan to tighten the 413 contracts it holds with major suppliers.
The new measures aim to enable the cancellation of existing and future contracts in cases of misconduct.
“We have directed PwC to stand down personnel directly involved in, or who had knowledge of, the significant breach from all existing and future contracts,” the email stated.
The directive extends to all Commonwealth contracts until the completion of a review on PwC's culture and governance, led by Ziggy Switkowski.
The finance department is also making changes to procurement rules to grant contract managers greater flexibility in terminating agreements due to material breaches.
In the coming weeks, the head agreement for all 413 suppliers on the Management Advisory Services Panel will be modified to include strengthened clauses.
This modification will empower Finance to remove a supplier from the panel and cancel all current and future contracts, even for behaviour unrelated to the specific services provided under the panel.
The actions follow Treasury’s referral of the scandal to the Australian Federal Police for a potential criminal investigation, which took place on the same day as the email sent by Ms Wilkinson.
The finance department has also introduced rules mandating that suppliers notify federal public servants if their personnel are found engaging in improper behaviour.
Reports emerged in January that the Tax Practitioners Board had revoked the registration of former PwC partner Peter Collins due to his unauthorised sharing of confidential information within the firm.
The board also required PwC to provide conflict-of-interest training for its employees.
In May, internal emails from the firm were published by a Senate committee, revealing how dozens of PwC partners and staff received emails regarding the exploitation of privileged information provided by Mr Collins during his government advisory work on multinational tax avoidance laws.
These leaked emails exposed how PwC used the information to advise 14 clients on circumventing new tax laws, earning fees amounting to $2.5 million.
Ms Wilkinson condemned Mr Collins' behaviour, describing it as “egregious”.
Treasury and Finance have been collaborating to address the issue from a whole-of-government perspective and implement measures to prevent future breaches.
Ms Wilkinson said that despite the leaks occurring outside a procurement contract, the scandal presents an opportunity to enhance the integrity requirements of the Commonwealth Procurement Framework.
The Australian Federal Police have confirmed they are investigating the misuse of information by the former head of international tax at PwC.
The police commissioner, Reece Kershaw, disclosed the information during a Senate hearing this week, following a referral from Treasury.
Treasury secretary Steven Kennedy acknowledged the referral, stating that it pertains to Peter Collins, who “improperly used confidential Commonwealth information”.
Additionally, NSW Senator Deborah O'Neill has urged PwC Australia to disclose the names of the 53 staff members involved in the leaking of confidential government information to the firm's clients.
Senator O'Neill called on PwC to take responsibility for what she described as a “gross scheme”.