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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

It was one of the biggest corporate scandals the country has ever seen.

Audio Excerpt - ABC Insiders Reporter:

“Much of the focus, and outrage, in Parliament House over the past week has centred on the extraordinary breach of trust at PwC.”

Audio Excerpt - NINE’s Today Presenter:

“This is one of the most stunning business stories of the year.”

Audio Excerpt - Sky News Presenter:

“Really, when the torch has been shone upon it, it's refused to open itself up...”

RUBY:

When it was revealed that PwC had used confidential government information to enrich itself and its corporate clients.

Since then there have been two parliamentary inquiries, an AFP investigation, nine investigations by the tax practitioners board, one internal review and an investigation by the international arm of the company, yet important questions remain unanswered.

Today, special correspondent Jason Koutsoukis, on the key questions at the centre of the tax leaks scandal and when we can expect answers to them.

It’s Tuesday, July 30.

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RUBY:

Jason, when the PwC tax leak story first broke, it was a huge story. How quickly do you think you realised the scope of what we were dealing with?

JASON:

So, when the first story was written about this, I didn't really understand the significance of what had happened.

The first story was about Peter John Collins, PwC’s former Head of International Tax, someone I'd never heard of, being suspended by the Tax Practitioners Board. It wasn't until a couple of weeks later that I really understood that Peter John Collins had agreed on a strictly confidential basis to help the Australian government plan and write multinational anti-avoidance tax laws. And then, before those laws were introduced in 2016, he had knowingly shared what he knew with companies here in Australia and overseas and was trying to help them avoid the very laws that Peter Collins had helped the Australian government write.

Audio Excerpt - Tom Seymour:

“They say, one partner shared the information. They say, we should have had a policy in place.”

JASON:

Tom Seymour, the CEO, he came out and said, look, this is just one bad apple and it was just him. Only he knew about it.

Audio Excerpt - Tom Seymour:

“As a result of that, there is a risk that one could perceive, were the exact words, that in all of his dealings there was a conflict there.”

JASON:

It wasn't until journalists started asking more questions and that the Senate got involved, you know, through Deborah O'Neill and Barbara Pocock, that we understood that there were about 35 people inside PwC that knew about it, possibly more. And that there were these, you know, 14 clients who'd been provided with the advice and had been helped, you know, to sidestep the new tax laws.

Audio Excerpt - Senator Deborah O’Neill:

“In recent days, it has become very clear that the PwC, Price Waterhouse Coopers, used secret government information that belongs to the Australian people to advise clients how to sidestep new tax laws that were under construction...”

JASON:

That's when it all kind of started to really become clear that this was an outrageous breach of trust that involved not just one person, but the whole of the PwC Australia tax practice. Then, I guess, like most people, I felt pretty outraged about it.

RUBY:

I think a lot of people felt that way. In your opinion, what has the response from PwC been like so far?

JASON:

Well, right from the beginning, the then Chief Executive of PwC Tom Seymour, was anything but transparent about, you know, the nature of what had happened and how many people knew about it. And Tom Seymour's attempts to cover up what had happened have kind of been continued by every other person at PwC that has spoken publicly about this. They haven't been frank and open and honest about what happened, and I think we really still don't understand who exactly inside PwC received this confidential information from Peter John Collins. And then we need to know what companies that PwC tried to use that information to win new business with, and that's another thing that they have refused to disclose. There was an internal investigation that was commissioned by PwC International. They commissioned a law firm, Linklaters, to investigate. They said that they would make that report public but that report remains, you know, secret and I think there's still, yeah, lots of questions to answer here.

RUBY:

Right, so why is it that that internal investigation has not been released as was promised? Why is it secret?

JASON:

Well, it's a really good question and, despite multiple requests from the Senate and the House of Representatives to see the report, PwC Global has, you know, steadfastly refused to release it, claiming that it contains all this, you know, privileged information that is confidential to PwC.

And even PwC Australia Chief Executive Kevin Burrowes, who receives more than a quarter of his $4 million annual salary from PwC international, claims that he hasn't even seen a copy of the report.

Audio Excerpt - Senator Deborah O’Neill:

“Have you read those reports?”

Audio Excerpt - Kevin Burrowes:

“There are no reports, Senator.”

Audio Excerpt - Senator Deborah O’Neill:

“What are there then?”

Audio Excerpt - Kevin Burrowes:

“There is, we had an investigation that was conducted with them, by them, and we received legal advice from them.”

JASON:

I find that hard to believe, but I guess we have to take his word for that. But, I think the fact that PwC haven't been prepared to release the report tells us that there is something pretty serious contained in its pages.

RUBY:

So, which PwC executives still haven’t been held accountable? That’s after the break.

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RUBY:

Jason, on Friday we will be hearing more evidence from PwC at a Senate hearing. The current Chief Executive Kevin Burrowes is due to speak. What questions do you think that he needs to answer?

JASON:

I think he could start with telling us how much money he makes, because up until now Kevin Burrowes has obfuscated and dissembled and proved unable to answer that one basic question. When he was first asked that question, he said his annual salary was 2.4 million a year.

Audio Excerpt - Senator Deborah O’Neill:

“Mr Burrowes, what is your salary in the role that you’re in?”

Audio Excerpt - Kevin Burrowes:

“Currently 2.4 million dollars, senator.”

Audio Excerpt - Senator Deborah O’Neill:

“Thank you very much Mr Burrowes.”

JASON:

A couple of days later, he sought to correct the record and inform the Senate that his actual salary was 2.8 million a year. And then last month, Burrows advised the same senator, Deborah O'Neill, the Labor Senator who's been leading a lot of the investigation on this, he was actually getting a $1.2 million top up each year courtesy of PwC International, for undefined services to the PwC network. You know, Kevin Burrows salary is not material to the, you know, the fundamental wrongdoing that took place here but it's a kind of measure of his preparedness to be open and honest with the Australian public. And if he can't answer that basic question, then what does it say about the rest of his testimony that he's provided so far and that we’re gonna hear on Friday?

RUBY:

And in terms of Kevin Burrowes and the transparency that we can fairly expect from him, he took over as the Chief Executive of PwC after the scandal broke, so after Tom Seymour was forced to resign. So, to what extent do you think that we, the public and the Senate, can really hold him responsible for things that happened before his tenure?

JASON:

Well I don't think we can hold him responsible for the actions of Peter John Collins and the other partners at PwC Australia, but I think we can hold him accountable for what's happened since then. So Kevin Burrowes, his career, PwC partner, he was based in Singapore and the global board clearly tapped him on the shoulder and said, we need you to go down to Sydney and try to clean up the mess at PwC Australia. So Kevin Burrowes has walked into a very messy situation. The partnership was effectively involved in a civil war and he's encountered a lot of resistance, I think, internally. People are resentful that an outsider was appointed to the PwC Australia partnership. The partnership are resentful that they've all been forced to take a pay cut, a significant pay cut. The total staff that have been forced out is around 700. So it's a very messy situation that Burrowes has walked into and I think that he has struggled to contain a lot of the internal anger within PwC over what's happened.

RUBY:

And it isn’t only Kevin Burrowes who is due to come before the Senate, it’s also his predecessors, including Luke Sayers who was actually in that role as Chief Executive when a lot of this conduct was underway. So, what would you like to see him pressed on?

JASON:

Well, the thing that I most want to know is exactly what Luke Sayers knew about what was happening at PwC under his watch. He's now, of course, the president of the Carlton Football Club, a real mover and shaker in the Melbourne, you know, political, social and business circles. And up to now, he's managed to sort of, kind of, weave his way through all of the flak that has been coming his way. But the main focus of the committee hearing on Friday has to be to hold Luke Sayers to account and really get to the bottom of what he knew about what was going on at PwC while he was running the show.

RUBY:

And just finally, Jason, what does it say to you that more than a year on from this story breaking, we're still falling far short of full transparency when it comes to what PwC did and didn't do? That there still seems to be this effort to contain the damage. Do you think that PwC still thinks that it can come back from this, that it can regain the trust of the Australian government and the public?

JASON:

Well, it's suffered a massive hit to its reputation and, even though I think the firm will survive, it's going to take a long time to recover.

It wasn't just that they effectively stole this information from the Commonwealth. You know, one of the things that angered me the most was, and we've seen this in the 144 pages of emails that the Tax Practitioners Board obtained from PwC, and what we saw in those emails was, you know, just contempt for the Commonwealth. They just really took advantage of the Australian public here and tried to help their clients, you know, cheat the Australian taxpayer of tax revenue that they owed. And I feel that they haven't shown sufficient, you know, remorse, you know, for the actions that were taken and I don't think it will fully recover until it does offer full transparency about what happened.

RUBY:

Jason, thank you so much for your time.

JASON:

Ruby, always a pleasure to talk with you. Thanks very much.

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RUBY:

Also in the news today...

Foreign Minister Penny Wong has announced plans to limit China’s influence in the Pacific with a new “cable connectivity and resilience centre”, designed to boost connectivity for Pacific nations.

Australia has committed $18 million over the next four years for the centre, which will be staffed by Australians. It will enable the sharing of information and regulation of undersea cables.

And,

A commentator has been removed from Olympic Games coverage over a sexist remark about the Australian women’s freestyle relay team.

Eurostar commentator Bob Ballard was discussing the gold-winning team when he suggested they were “hanging around doing their makeup”.

I’m Ruby Jones, this is 7am. See you tomorrow.

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