I would recommend all of you to take a look at the PWC story that is unfolding in Australia, especially those of you in the media or government. Because if this scandal spreads, and the investigators suggest it is not limited to Australia, the outcry and the consequences will be huge.
PWC is accused of using its confidential work for the Canberra government on tax policy to inform private clients on how best to avoid upcoming anti tax avoidance rules. Already emails revealed by the government suggest this was not limited to Australia.
Leaving aside PWC’s troubles with Canberra, just try to imagine where this might end, if this is a wide spread tactic not just limited to one firm in one country.
Are other consultancies in the USA, the EU and the UK on say infrastructure and government spending selling secret info to bidders they also serve? Are ministers being given dodgy advice to serve the interests not of the government but of the corrupt consultants? How much tax has been lost? Can bidders who lost out sue? Can governments get the tax back? Did the clients of these consultancies know that they were being advised with stolen, secret information? Shouldn’t someone have spotted that new laws had already be circumvented by those targeted? How did that happen if the new laws were secret?
If this case spreads and turns out to be multi-national in scope and common in the industry, the big consultancy firms are dead men walking.
Who can ever trust them again? While governments, who always boast of bringing in the whizz kids from the private sector to show those dull mandarins how things should really be done, will look stupid, naive and culpable, not to say criminally negligent.
As with all white collar scandals, huge amounts of money will be spent on PR and legal advice to deal with “reputation issues”, deputy heads will roll, a few rotten apples will be thrown out. Firms will offer huge fine payments to avoid criminal prosecution. The banks are past masters at this strategy.
But this scandal smells different, making fools of whole governments is dangerous. They are vain, proud and they have reputation issues to manage too, at the ballot box.
And they are very, very powerful.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
You have to ask why governments ever need external consultants in the first place. That's the real problem.