It’s no secret the Australian government relies on consulting firms to complete necessary work. But a growing tax leak scandal at PwC Australia has led to a reckoning for the lucrative consulting industry over the role it plays in the murky world of tax minimization.

At the center of the scandal is Peter Collins, a senior PwC tax expert, who was outed by ICIJ partner the Australian Financial Review for using secret government information to advise clients — Google, Apple and Microsoft likely among them — on how to sidestep new tax laws. Internal emails confirmed Collins shared the intel with dozens of his colleagues and PwC used it to book millions in fees within hours of laws, meant to curb tax avoidance, being announced in 2015.

Collins was banned from acting as a tax practitioner, while his boss, Tom Seymour, stepped down from his role as CEO of the Australian arm of the accounting giant once known as PricewaterhouseCoopers. But the consequences have spread further, well beyond an amusing skewering by the Australian public broadcaster. So, what next?

The matter has already engulfed parts of PwC’s global operation and was this week referred to the Australian Federal Police by the Treasury. Meanwhile, the Australian treasurer has promised to “crack down” on consultants that abuse their access to confidential government information, though he has yet to reveal what exactly the “further steps” he intends to take might entail.

Some lawmakers have called for the PwC team members involved, and the companies they advised, to be named and shamed. Others want the firm banned from government contracts. But, with the government forking out at least a billion dollars a year to consultants, as one senator put it: “The bigger question remains, are we looking at just the tip of the iceberg; what is going on in the larger industry of big consulting?”

Dear Lucas,
In 2005, Pietro Mancini, a lab analyst, discovered a coating of yellow dust and yellow sludge in the basement and storeroom of a chemical factory in the northern Italian town of Spinetta Marengo. Lab results showed it was hexavalent chromium, a heavy metal known to cause cancer.

When Belgian chemical giant Solvay SA acquired the aging plant in 2001, it promised to clean up the contaminated site and prevent hazardous leaks. Bernard de Laguiche, an executive and member of Solvay’s founding family, oversaw the acquisition. But the cleanup lagged. Three years after Mancini’s discovery, environmental inspectors found hexavalent chromium at more than 40 times the legal limit in wells near the plant. Officials declared a public health emergency.

Italian prosecutors brought criminal charges against more than two dozen people including de Laguiche, accusing them of contaminating the town’s water supply. Pandora Papers show how, before the charges were filed and soon after, de Laguiche and his family moved assets worth more than $50 million into trusts in Singapore and New Zealand.

Ultimately, “it’s the middle class and the poor who are paying for everything” says Professor Eric Kades of William & Mary Law School, “because the wealthy have found a way not to pay their fair share.” De Laguiche was later acquitted. Mancini was fired after reporting the findings. In 2015, he had a cancerous tumor removed from his right kidney.


Help us continue to expose injustices


Mancini has since moved away from Spinetta Marengo but continues to have nightmares about working in the contaminated lab. He hasn’t completely recovered from his cancer surgery, he said. He used to swim and play tennis. Now he can’t, without feeling dizzy or tired. He has no regrets about blowing the whistle on his former employer.

“I would do it again,” said Mancini. “I don’t have anybody’s health on my conscience.”

A day after responding to ICIJ’s questions for this story in September, de Laguiche resigned from his position at Solvay and its parent company — “strictly for personal reasons,” he reportedly said.

This is the power of investigative journalism.

Still today, Spinetta Marengo residents continue to fight. They want Solvay to complete the cleanup, while authorities are again investigating allegations the plant may still be leaking toxic chemicals. As reporters, our responsibility is to make their voice heard and expose inequality and injustice when we see it. We cannot do this without you. With a gift you help those that risk their livelihoods to see change - you too will make a difference.

Thank you,

Scilla Allecci
ICIJ's investigative reporter

The undertaking has been enormous: for 20 months, we’ve supported, coordinated and worked closely with teams of crack investigative journalists from 150 media outlets, who have brought a literal world of knowledge and experience to bear on an exclusive — and comprehensive — dataset that was leaked to ICIJ. Our reporting, which uncovered the financial secrets of hundreds of politicians, as well as criminals, billionaires and celebrities, is already making waves, with officials in more than a dozen countries calling for official probes of Pandora Papers revelations.

One of the challenges of cracking down on financial crime is the global race to the bottom between havens trying to entice customers by offering more lucrative tax incentives or a higher degree of secrecy for companies.

When one jurisdiction institutes more transparency, other offshore destinations step in to fill the gap — a phenomenon that’s continually vexed local and international officials aiming to chase the secret money trails of tax dodgers and criminals.

One such destination is the United Arab Emirates, a growing hub for illegal money movements. Under pressure to do more to prevent money laundering, the country has responded by implementing rules around reporting ultimate beneficial owners.

Beneficial ownership databases have become an increasingly popular reform around the world in the aftermath of Panama Papers, which brought international attention to how corporate anonymity can enable a range of social ills. More recent ICIJ investigation such as FinCEN Files and Luanda Leaks, highlighted the Dubai’s rise as a go-to secrecy haven for those looking to hide illicit wealth.

Anisha Kohli, ICIJ’s new summer intern with the Emma Bowen Foundation, writes about questions and concerns onlookers have about the scope of the UAE’s new beneficial owner rules, and how effective the new law might be, along with Maggie Michael, our reporter in Cairo.

Corporate tax dodging continues to make headlines and feature prominently in policy discussions around the world. But disclosing exactly how companies secretly skirt taxes remains a risky act.

Europe’s top human rights court upheld the conviction of whistleblower Raphaël Halet, a former PwC employee who downloaded tax records from a work computer that became a key part of Lux Leaks. The 2014 ICIJ investigation revealed how nearly 340 global firms slashed their tax bills by making confidential deals with the Luxembourg government. The exposé sparked momentum across Europe to end industrial-scale tax dodging.

The court ruled in favor of Luxembourg and PwC, an accounting giant that designed complex financial structures and helped clients cut deals uncovered in Lux Leaks — allowing some of the world’s largest companies to pay less than 1% tax.

But the decision was made with some strong opposition. Two judges penned a dissent stating that the ruling created an impossibly high bar for future whistleblowers to meet, stressing the importance of repeated leaks to reinforce public awareness around corporate tax dodging.

The ruling came out the same week that the European Union General Court ruled in favor of Amazon and Luxembourg in a case challenging another sweetheart tax deal — a setback in the European Commission's campaign to force Amazon to repay about $300 million in taxes.

Jammer dat het bovenstaande filmpje van ICIJ zo tendentieus is ten aanzien van het conflict in Syrië. De teneur staat haaks op het onderzoek dat ICIJ uitvoerde en waarvan de conclusie luidt: iedereen die aan het conflict verdient heeft boter op het hoofd. Hebzucht (snel en belastingvrij geld verdienen en verduisteren) en niet politiek dicteert de ingenomen stellingen.

Terwijl de hele wereld in de ban is van islamistisch en fundamentalistisch terrorisme, doen de 'superrich' achter de schermen zaken. Fungeert terrorisme als een rookgordijn? De internationale fraude gebeurt in alle gevallen ten koste van de gewone belastingbetaler, de gewone burgers, kinderen, zieken, vrouwen, ...

Na LuxLeaks en SwissLeaks zijn er nu de Panama Papers. De offshoreconstructies komen voor in alle sectoren. (wordt vervolgd ...)

ICIJ, 20160113
Belgium has been ordered to recover $765 million in unpaid taxes from 35 multinational corporations after the European Commission said tax breaks granted to the companies were illegal.

The ruling was the latest in a series of investigations, led by European Union competition commissioner Margrethe Vestager, into special tax concessions offered by European countries to lure the business of multinational corporations.

Last year the commission made similar rulings against Luxembourg and the Netherlands concerning their tax deals with Fiat and Starbucks respectively. Investigations into Ireland’s tax arrangements with Apple and Luxembourg’s agreement with Amazon are ongoing.

The commission has not named the 35 companies affected by the Belgium ruling, but brewer ABInBev (which produces Budweiser, Stella Artois and other popular brands of beer) and BP are reported to be among them.

ICIJ’s Luxemourg Leaks investigation, published in 2014, revealed the inner workings of many of these types of secret arrangements that some of the world’s biggest companies make with government authorities in order to slash their tax bills.

On the same day the commission’s latest ruling was announced, an interview with commissioner Vestager was published by EurActiv in which she denounced Luxembourg’s decision to prosecute two whistleblowers and a journalist in relation to leaked tax documents.

“LuxLeaks could not have happened if it was not for the whistleblower and the team of investigative journalists. The two worked very well together to change the momentum of the debate about corporate taxation in Europe,” Vestager said.

“I think everyone should thank both the whistleblower and the investigative journalists who put a lot of work into this.”

The trial of whistleblower and former PricewaterhouseCoopers employee Antoine Deltour, another unnamed whistleblower, and journalist and ICIJ member Edouard Perrin is set to begin in Luxembourg on April 26.