First public official ousted in global PwC tax scandal

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EXCLUSIVE

ANTHONY KLAN

The global PwC tax leaks scandal has claimed its first government scalp with one of Australia’s most senior tax officials departing amid revelations by The Klaxon.

Anthony Klein, who was just halfway through his three-year term, has “resigned” as director of the Board of Taxation after The Klaxon queried his past, including his having worked directly with at least two PwC tax partners at the heart of the tax leaks scandal.

The latest twist in the scandal — which the Australian Government has sought to keep behind-the-scenes — extends to Australian Taxation Office (ATO) boss Chris Jordan, who has known about the PwC scandal at least since “late 2017” and who has been a Board of Taxation director since 2000.

It also embroils Treasury Secretary Stephen Kennedy (the head of the Department of Treasury), who has been a Board of Taxation director since 2019 and has known about the scandal since at least January when it emerged publicly.

On Friday The Klaxon revealed Klein, a PwC tax partner for 17 years until July 2021, worked directly with both Peter Collins and fellow PwC tax partner Paul McNab, including in direct collaboration at least as recently as October 2018.

How The Klaxon broke the story Thursday. Source: The Klaxon

Collins and McNab are among the former PwC tax partners named by the embattled consultancy as connected to its tax leaks scandal, which became public in January when Collins received a two-year ban.

It was revealed the consultancy giant took secret Australian Government data, gleaned from 2013 to 2018 while providing “advice” drafting multinational tax avoidance laws, and over many years shared it widely within the firm and with clients across the globe.

Under one 2015 scam, which PwC internally called “Project North America”, PwC sold data for millions of dollars to US-tech giants, offering them “work arounds” to incoming Australian laws, months before those laws were announced.

Klein was appointed a Board of Taxation director in October 2021, by then Coalition Federal Treasurer Josh Frydenberg, and was remained a director alongside Jordan and Kennedy from then until his secretive departure, sometime between June 23 and last Friday.

“Klein was Board of Taxation director alongside Jordan and Kennedy from October 2021 until sometime between June 23 and last Friday”

The Board of Taxation website on June 23 Source: Australian Government

Remarkably — particularly given accountability and transparency are at the heart of the growing scandal — the Australian Government has sought to exit its ties with Klein behind-the-scenes.

On June 23 The Klaxon put detailed questions regarding Klein’s PwC past to Klein and to the Board of Taxation – including chair Rosheen Garnon and director Julianne Jaques.

All refused to respond.

That same day we also put questions to Kennedy’s Department of Treasury, which both oversees the Board of Taxation and provides it with “secretariat services”, such as staff.

Treasury also refused to answer our questions.

(Kennedy has been head of Treasury since 2019).

Yet sometime between June 23 and last Friday, Klein’s name was scrubbed from the Board of Taxation website.

Klein was paid a taxpayer salary of $61,230 a year plus expenses for the part-time role.

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The Board of Taxation website since at least last Friday. Source: Australian Government

In a statement Friday, an unnamed government “spokesperson” said Klein had “resigned” but refused to comment further.

“Mr Klein has resigned from the Board of Taxation,” the statement said.

“The Board does not make media announcements concerning either the appointment of a Board Member or the conclusion of a Member’s appointment”.

That’s despite Klein’s appointment being announced in a Board of Taxation press release, on October 25, 2021.

“I am delighted to report that the Government has announced the appointment of Mr Anthony Klein and Ms Andrea Laing as part-time members of the Board of Taxation (the Board) for a three-year period from 20 October 2021,” writes chair Garnon.

“On behalf of the Board, I welcome Anthony and Andrea and look forward to working with them.

That October 2021 Board of Taxation media statement continues: “Anthony has experience in corporate and international tax. Mr Klein has more than two decades of experience working in the tax advisory space, most of which has been spent at Big Four accounting and advisory firm PwC. Over the years, he has helped entrepreneurs across Australia and the globe with getting their businesses off the ground and is currently a tax advisor to some of the largest tech firms in Australia”.

That statement, “media release 56”, was made while Jordan and Kennedy were Board of Taxation directors — it is also the most recent media release on the Board of Taxation website.

Peter Collins (left), McNab and Anthony Klein. Source: Supplied

The revelations come as Senate inquiry into consultancies, spearheaded by Labor Senator Deborah O’Neill and Greens Senator Barbara Pocock, today launched its latest round of public hearings.

Senate inquiries are seen as a “last stop” for detecting and airing wrongdoing when other government systems fail.

The PwC scandal has raised serious questions over Australia’s tax authorities, including “revolving doors” and extremely close ties with executives of the “Big Four” consultancies, PwC, EY, KPMG and Deloitte.

“Everything this committee and estimates (has) scratched in relation to PwC (has revealed) a dense network of tentacles,” Senator Pocock has said.

More to come…

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Anthony Klan

Editor, The Klaxon