The political foes chasing down KPMG’s ‘wolves’ have not finished yet

Labor senator Deborah O’Neill sent a shockwave across the country with her bombshell revelations of the conduct at accounting/consulting giant KPMG – and it has even led some to call for her elevation to a higher office.

“Deb should be a cabinet minister, in my view. And I’d say to the prime minister, happy to put it on public record, make this woman a cabinet minister because she’s formidable. She’s a force of nature. She’s got a very strong moral compass. She’s very thorough, and she’s very collegiate.”

This praise did not come from an anonymous factional source within the ALP jockeying for favour.

It was the Liberal National Party Queensland senator Paul Scarr.

He was singing her praises, having shared the star chamber atmosphere of the public hearings that have forensically torn apart the leadership of the global consulting giant – and other groups associated the scandal such as law firms and the accounting peak body – with ferocity, humour and a tight-knit kinship among political rivals.

The common cause of exposing the corporate wrongdoing is in sharp contrast to the growing political divide in Canberra as One Nation’s ascendancy – it is the one party not represented on the committee – upsets the traditional political order.

At the June hearings, O’Neill, the committee chair, praised her colleagues, including Scarr, Greens senator Barbara Pocock, deputy chair and Liberal National Party MP Scott Buchholz, Liberal senator Dave Sharma and Labor senator Tania Lawrence.

“I am so pleased to be sitting here with my colleagues today and undertake this work in the national interest,” she said at the June hearings.

The last two words are a point that O’Neill emphasises when it comes to what makes this committee click.

“We share a view of what our role is as parliamentarians and what voters expect us to do, in their interests,” she says in an interview.

“I think it restores hope in the democratic project that people are able to see us working together for them as parliamentarians.”

The parliamentary hearings have uncovered cases of ethical breaches by some KPMG executives, and it would appear these occurred in the pursuit of profit. In contrast, the public interest is the only upside for many of the politicians on the committee, despite the incredible capabilities and work ethic on display.

O’Neill was forced to fight for her job in 2021 in an internal factional tussle with Kristina Keneally for top spot on Labor’s Senate ticket.

Scarr, a Liberal moderate, seems unlikely to find favour in a climate where One Nation poses an existential threat.

Pocock, who was elected to the Senate in 2022, says her focus remains on housing, holding KPMG to account and the environment ahead of her term expiring at the next federal election.

Both Scarr and Pocock say there is a shared outrage uniting the committee across the political trenches.

“It is a shared mission, and I think it’s shared values, which is: ‘Hold these bastards to account for their greed and their moral failures,’ ” Pocock tells this masthead.

Both also allude to a shared purpose on the outcome that is needed.

“I think the committee also knows there’s a moment here – that we don’t want to lose this moment. We don’t want to lose this opportunity for reform to occur,” Scarr says.

“There we are in the parliament chasing down these wolves … we are not the regulator … we should have a regulatory system that actually imposes very painful, large penalties for such unmitigated greed,” Pocock says.

Part of what is feeding the committee’s outrage is that O’Neill, Scarr and Pocock were uncovering appalling behaviour at rival PwC – relating to its tax leaks scandal – at the same time as senior KPMG executives were engaging in their own misdeeds and then allegedly trying to cover it up.

Pocock acknowledges the crucial role played by Liberal senator Richard Colbeck in the PwC hearings, which were winding up in 2024 when the KPMG whistleblower complained to his bosses of appalling behaviour by some of the firm’s most senior partners – including auditors accessing confidential client data to win new business.

This includes confidential Lendlease board documents about rival tenders for its audit contract.

It is a massive breach of trust for the auditors who require unfettered access to customer information to assess and certify the credibility of their financial accounts – a service that is essential to the integrity of financial markets.

It explains some of the outrage at KPMG’s mistreatment of the whistleblower, including a covert search of his work laptop.

“The search which occurred early in the day on 30 May [2024], I think, with my best recollection, was authorised by me and was in the context of us being concerned that the individual might be seeking other employment. We were concerned about whether information from KPMG might have been shared outside of the organisation,” KPMG’s former audit head Julian McPherson told the committee at its June hearing.

O’Neill: “God forbid!”

Lawrence: “The irony!”

Scarr: “You were concerned about your own information, but not Lendlease’s!”

O’Neill: “Sorry, colleagues. I know that there’s outrage here, but let’s just get everything on the record.”

Pocock: “It’s just gobsmacking!”

In an interview, Sharma says the KPMG executives clearly knew what they were doing was wrong. “The thing that was probably more shocking is the degree to which people tried to cover this up through various means, so either you know by directly lying or not being candid and honest.”

Both Scarr and Sharma represent the traditional party of big business, but say the issue of wrongdoing is what provides the unity with an unusual kindred spirit like the Greens.

“As politicians, we all have an interest in holding institutions to account and looking out for the public interest. And often, those things are not really a matter of partisanship,” Sharma says.

Another fiery exchange from the hearings concerned the use of the euphemism “falling short” by KPMG and accounting body CAANZ to repeatedly describe all sorts of illicit behaviour, which has now seen staff sacked and triggered multiple investigations.

Scarr: “You use the phrase ‘fall short’ – ‘They have fallen short’ as if there’s some aspiration up here and you got to 90 per cent of it. Why? … Can I suggest to you that perhaps the better phrase would be ‘egregious breach’?”

O’Neill: “Failure.”

Scarr: “Would you accept that?”

The fact that the committee includes so many who have life experience outside politics has really helped, Scarr says. His previous career included a long stint at Allens – one of the firms at the core of KPMG’s whistleblower actions.

Scarr also worked as general counsel and company secretary of ASX-listed PanAust Ltd. It involved working closely with its auditors and gave him a clear-eyed understanding of just how appalling the KPMG breaches were.

Pocock had a career as an economist and academic before her political life began.

“I think we are actually a fairly values-driven group of people,” Pocock says.

“And while we are all party animals, I mean, you don’t get to be a Greens senator without your blood running green. And the same for Labor and Liberals – there are plenty of reasons why we are antagonistic to each other – but I do think … we’ve all had quite a bit of life experience,” she says.

Scarr says each has had an important role to play, but singled out O’Neill, who spent decades working as a high school teacher before her political career.

“Obviously, there’s Deb’s strong moral compass, which I like to think we all have. But also you know I’ve got the legal background, the professional services background, so I understand how that world works. And Barbara’s very forensic. Barbara will be a loss to the Senate,” he says of Pocock’s recently announced plans to retire at the 2028 election.

“I think Deb’s leadership has been strong and courageous, and Paul Scarr’s also,” Pocock says.

“There are plenty of Greens colleagues who think I was nuts for saying that. It’s not the way that Parliament always works. It thrives, and the media thrive, on conflict,” she admits.

Pocock says the big test for this unusual political unity will come when the government is forced to enact an effective solution to these crucial firms being overrun by greed and bad behaviour, and whistleblower reforms, a challenge it largely failed after the PwC scandal.

“I think the real test for the differences between us will come … and that is, what happens? Will Labor have the courage to reform the governance of these organisations with proper directors and proper responsibilities for a board, and really significant penalties and proper structural reform of a failed partnership model?”

The behind-the-scenes industry response will be formidable – not just from KPMG, which has conceded as little as it can in the brutal hearings so far.

Pocock is under no illusions about what the big firms really think of her and O’Neill. The feedback from insiders at these firms has provided a clear picture.

“[We get] feedback from people from inside the Big Four who say there are certainly figures within the leadership of the Big Four who say, of Deb and I, ‘Oh those two women, what would they know? We just wait for their caravan to move on. They are just a couple of amateurs on our very complex terrain.’ ”

It will be front of mind on Friday as the committee grills the corporate regulator ASIC, and other parties that have yet to be announced.

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