Australia’s most senior public servants and their ministers have been put through the wringer at senate estimates over their connections to, and treatment of, management consultancy PwC and the firm’s alleged disclosure of confidential government information on a tax crackdown to targeted companies, with the matter now referred to the Australian Federal Police.
In another 24 hours of bombshell developments, it was revealed by the Australian Financial Review that the Department of Finance secretary Jenny Wilkinson has demanded PwC “stand down” any of its staff involved in the propulsion of leaked confidential information from the Australian Tax Office — but left it up to PwC to identify and remove those staff from government contracts.
If the move were meant to signal a ‘get tough’ approach to the firm, it produced incredulity, frustration and disbelief as Department of Finance officials and minister Katy Gallagher endured hours of interrogation that laid bare the paucity of official sanctions available to the government.
The big technical hurdle for sanctioning PwC is that the alleged leaks — circulated to some 53 as-yet-unnamed people in the organisation, according to a cache of emails obtained as evidence by Labor senator Deb O’Neill — were exfiltrated through a consultative process, not on the government coin.
Put simply, because PwC was regarded as both an industry expert and a key stakeholder, it was confidentially consulted on new regulations — and signed off on strict confidentiality provisions — rather than regarded as having breached a commercial contract that would allow for termination and exclusion under procurement rules.
Ring my bell
The consulting industry has long run rings around Finance and its procurement oversight function; however, things got particularly bad after the infamously bad Gershon review, which was supposed to re-centralise government control of technology but instead retarded it for at least a decade.
O’Neill gave Finance officials a pretty solid push in terms of what they were endeavouring to find out — including 50-odd names that were redacted in the emails dredged up in evidence — leading to the conspicuously awkward situation of Gallagher needing to back in her department over a senate colleague.
Finance had not asked for the names; the matter had been referred to the Australian Federal Police. Gallagher was repeatedly pushed into the corner of having to deflect claims by non-Labor senators of inaction on the basis that there was no contractual or procurement basis to act on to take sanctions.
Gallagher and Finance’s line is that they have now firmly put the onus on PwC to provide them with proof they have their governance house sufficiently in order. The outward message is that PwC, like an unfaithful spouse, needs to prove it can be trusted again.
The problem there is that the proof points — an independent legal review and another internal review by Ziggy Switkowski — are both funded by PwC, handing the government’s critics ammunition.
Greens senator Barbara Pocock grabbed the free kick to visibly get under Gallagher’s skin.
Check your receipt
Barbara Pocock’s (Greens) line of questioning was essentially about how a senator from a party that was a beneficiary of party political donations from not only PwC but other consultancies could manage conflicts of interest.
Gallagher reacted badly, demanding Pocock put any evidence and allegations on the record. Pocock didn’t take the bait, and didn’t need to, given the Centre for Public Integrity (CPI) the same week had laid out consultancy donation expenditure and government receipts days prior.
The CPI’s board, known agitators for the federal National Anti Corruption Commission (NACC), include chair and former judge of the NSW Court of Appeal the Hon Anthony Whealy QC, former judge of the Victorian Court of Appeal the Hon Stephen Charles AO QC, deputy vice chancellor of the University of New South Wales and former dean of the UNSW Law School and constitutional law expert Professor George Williams AO, and former counsel assisting the New South Wales Independent Commission Against Corruption and Police Integrity Commissioner and adjunct professor of law at University of Notre Dame Geoffrey Watson SC.
The CPI’s former directors include the Hon Tony Fitzgerald AC QC — think the Moonlight State, and the late the Hon David Ipp AO QC — think the downfall of the Obeids.
When a bench of former judges and corruption prosecutors start publishing their own evidence based on public information, selective ignorance becomes both harder and more dangerous.
El Nino and friends
The CPI’s research documented the traceable money. Less traceable is the succour and mentoring afforded to rising and returning political operatives given safe pasture in consultancies during their days on the political benches, only to help formulate and sell-in policies down the track.
It’s a system built more on friendship and professional networks and tribute systems rather than ideas, with the carrot of consulting routinely dangled in front of senior public servants accustomed to adjusting to the dominant ideas of the government of the day, if not bowling them up.
The latter is not an imaginary issue, especially when permanent public servants are hardly permanent anymore and tech companies and the consulting class routinely sponsor elected officials and the career paths of their staffers.
Even Australian Federal Police (AFP) commissioner Reece Kershaw was hounded by the Greens, who dredged PwC contracts out of the AusTender contract system and then demanded to know how having the firm as an incumbent supplier did not create a conflict.
This is where the real procurement burn occurs, without the need for formal bans. Few senior departmental officials want to risk their career path on a set of questions that open a trapdoor beneath them.
The implicit contract of public service is you take a lower pay deal than industry in compensation for job security to compensate for the revolving door of policymakers we accept as part of the democratic bargain.
PwC is just the start. The question is what Katy Gallagher and friends are prepared to wager, or sacrifice, to be seen to have a clean set of hands. And they are no small odds.
:
DAFF officials shed light on unsolicited PwC proposal in senate estimates
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