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Australian federal police begin search of PwC headquarters amid tax leaks scandal

Australian federal police begin search of PwC headquarters amid tax leaks scandal

Australian federal police officers have commenced a search for documents at the headquarters of PwC Australia in response to the damaging tax leaks scandal.

Treasury referred the matter – which relates to the sharing of confidential multinational tax proposals within the firm – to police in May last year.

In an email to staff on Monday, the firm’s chief executive, Kevin Burrowes, said staff should expect police to remain inside the Sydney headquarters for “several days”.

“This step is an expected development in relation to an investigation the AFP commenced in 2023 into the historical tax matter and individuals who have left our firm,” Burrowes told staff.

“We have been working with the AFP to facilitate its attendance and will continue to cooperate with its investigation.”

Burrowes urged staff to “please carry on as usual and remain focused on the important work we’re delivering with our clients and in the community”.

An AFP spokesperson said the force would “provide an update at an appropriate time” and that there was no threat to public safety.

The police investigation, dubbed Operation Alesia, is examining whether former PwC Australia staff committed a crime by disclosing official secrets.

Operation Alesia has been deemed a priority investigation for the force, which told parliament in February that it had made international inquiries.

Shortly after the referral to police in May 2023, the Treasury secretary, Steven Kennedy, told parliament that internal PwC emails “highlighted the significant extent of the unauthorised disclosure of confidential commonwealth information and the wide range of individuals within PwC who were directly and indirectly privy to the confidential information”.

The emails, tabled in parliament, revealed one former PwC Australia partner under investigation wrote “for your eyes only” while emailing government secrets to colleagues. This information was then used to win clients in the United States.

In a statement, a PwC Australia spokesperson said the firm had since “introduced significant governance, business and cultural reforms, and our people remain focused on delivering the best outcomes for our clients and communities”.

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The scandal also led to PwC Australia divesting its entire government advisory service with 1,750 staff to private equity investor Allegro Funds for just $1.

Correspondence published by federal parliament last week revealed PwC International was furious with its Australian affiliate for damaging the brand’s reputation.

In one email, PwC International’s global general counsel, Diana Weiss, threatened the Australian firm with expulsion from the network unless it handed over ultimate control of the firm’s response to scandal. She called for a new “network representative” to be installed in Australia.

“All decisions relating to the accountability of individuals for the matters under review in the Senate Inquiry and related matters (…) must be reviewed by and agreed with me and the network representative,” Weiss wrote.

“The firm shall not provide to any regulator or other governmental or legal authority any formal, significant or substantive submissions or responses (whether oral or written) regarding any of the topics until the network representative and I have reviewed and approved the materials.”