Inexplicable Investments: Elbit Systems and Australia’s Future Fund
Australia’s modest sovereign wealth fund, modestly standing at A$272.3 billion, has crawled into some trouble of late. Investors, morally twinged, are keeping an eye on where the money of the Australian Future Fund goes. Inevitably, a good slice of it seems to be parked in the military-industrial complex, a sector that performs on demand.
Filed last October, a Freedom of Information request by Greens Senator David Shoebridge revealed that as much as A$600 million in public funds had found their way into defence company assets. In December, it was reported that the 30 defence and aerospace companies featured, with some of them receiving the following: Thales (A$3.5 million), Lockheed Martin (A$71 million), BAE Systems (A$26 million), Boeing (A$10.7 million), Rocket Lab USA (A$192 million) and Elbit Systems (A$488,768).
The findings gave Shoebridge a chance to spray the board administering the fund with gobbets of chastening wisdom. “The Future Fund is meant to benefit future generations. That rings hollow when they are investing in companies making equipment that ends future generations.”
Some cleansing of the stables was on offer, and the choice of what was cleaned proved popular – at least for the Canberra security establishment. In May, the Board upped stakes and divested from funds associated with the People’s Liberation Army of China. Eleven companies were noted, among them Xinjiang Guanghui Energy, a natural gas and coal producer whose chairman, Sun Guangxin, teased US officials by purchasing ranches for reasons of building a wind farm in proximity to a US Air Force base in Texas.
Relevant companies included Jiangsu GoodWe and LONGi, both with expertise in the line of solar energy generation. “Taxpayer funds and Australians’ retirement savings should never be invested in companies linked to serious human rights abuses, sanctions evasion or military suppliers to an authoritarian state,” gloated a satisfied opposition home affairs spokesman, Senator James Paterson. The same, it would seem, would not apply to human rights abuses committed by a purported democratic state.
To that end, things are somewhat murkier when it comes to the companies of other, friendlier powers. For some obstinate reason, Israel’s military poster boy, Elbit Systems, continues to make its presence felt in the field of Australian defence and finance. Despite a spotty reputation and a resume of lethal drone production; despite the ongoing murderous conflict in Gaza, the Israeli defence company managed to convince the Australian government to throw A$917 million its way in a contract signed in February. The contract, to be performed over a period of five years, will supply “advanced protection, fighting capabilities and sensors” for the Infantry Fighting Vehicles (IFVs) of Korean design. With wonderful opportunism, the vehicles are being constructed in the same electorate that belongs to the Australian Defence Minister, Richard Marles.
And what of the near half-million dollars invested by the Future Fund in Elbit Systems? In October 2023, a list of the Fund’s direct holdings in various companies was published. It included Elbit Systems. An odd matter, given that the company, since 2021, is precluded from investing in the fund given, as Shoebridge tells us, the ratification by Australia of various “military weapons-related conventions or treaties”. The board, accordingly, had to furnish reasons “how it continues to invest in Elbit Systems despite the publicly announced direction it gave to withdraw those funds because of Australia’s international legal obligations.”
The internal correspondence of December 7, 2023, prompted by Shoebridge’s FOI request, including the prodding of Michael West Media, proved arid in detail. A Canberra bureaucrat in finance asks an official associated or attached to the Future Fund (both names are redacted) to clarify the status of Elbit Systems in terms of the exclusion list. The reply notes the role of “expert third party service providers” (who, pray?) who keep an eye on company activities and provide research upon which a decision is made by the Board every six months.
Elbit had been previously excluded as an investment option “in relation to its involvement in cluster munitions following its acquisition of IMI [Systems]”. IMI, rather than Elbit, was the spoiling consideration, given its role in producing technology that violates the Convention on Cluster Munitions. As of April 2023, Elbit was “no longer excluded by the portfolio. This reflects the updated research of our expert research providers.”
The response is not obliging on the exact details of the research. Banal talking points and information stifling platitudes are suggested, crude filling for the news cycle. The Board, for instance, had “a long-standing policy on portfolio exclusions and a robust process to implement” them. The policy was reviewed twice a year, buttressed by expert third party research. Recent media reporting had relied on an outdated exclusions list. The Board did not invest in those entities on the exclusions list. For the media establishment, this would have more than sufficed. The Board had said, and revealed, nothing.
Last month, Michael West noted that efforts to penetrate the veil of inscrutability had so far come to naught. The Future Fund and its Board of Guardians persisted in their refusal to respond to inquiries. “Since our last media request for comment, Israel has ramped up its war crimes in Gaza and the West Bank.” Given various interim orders by the International Court of Justice warning Israel of a real risk of committing genocide, even as it ponders South Africa’s application to make that finding, what are those expert researchers up to?
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6 comments
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Clakka
Return to home pageAt least we can be happy Hezbollah & Yemen are successfully shooting down ziofascist drones
Thank you Dr. Kampmark, excellent summary.
So far as the Australian Government is concerned, I am now in no doubt there has long existed an unseen and impenetrable barrier to any useful information emerging from our political “masters” and/or their advisors – indeed anything that pertains in any way to any actual decision or the reasons for it. This of course includes reasons for nothing being done at all – when the occasion demands.
I would go further and suggest that advancement by advisors in any field of endeavour relevant to the above, requires the particular operator to overcome any lingering belief, understanding, or notion of public service and look rather to mastery of such devices as obfuscation, evasiveness, mystification, fudging, obliqueness, dissembling, and above all, waffle and leave to their political masters the twin arts of duplicity and subterfuge.
What can be done about this you might ask?
I can easily imagine a past or current PS directive:
“You simply cannot answer any question the public may ask of you. That process would be endless; nothing would ever get done.
The Future Fund is not a sovereign wealth fund, though it’s ‘spun’ as such to sound neutral and ‘meant to benefit future generations’; it’s simply to cover future government liabilities of PS retirees’ defined benefits, supported by present day general revenue and investments.
Like super funds, decisions made are up to by their members (who are the FF equivalents?), though RW media don’t think so and demand super funds too are constrained by RW external voices; what are the guidelines for both super and the FF?
Becomes complicated not just on weapons, but any product or service will have a mixed supply chain, and unlike the EU which has developed standards for the same leading to the ‘Brussels Effect’, many voices seem to make them up on the run regarding Israel (while averting gazes from regimes, just as grotty, but not allied with western nations)?
Elbit manufactures drones for surveillance or the targeting of people they wish to kill. Videos of Palestinians being vaporized by drone attacks in Gaza show the end result of drone attacks.
If the FF is investing that means they see a profit as Elbit sales of ‘defence’ equipment increases.
Two days ago, deputy PM Richard Marles commented on a decision by the government to make eligible to join the ADF ‘permanent residents from Five Eyes countries any other countries’ from 1 Jan 2025.
Marles, in a brain fart moment, tried to justify that idea by saying “the French have the French Foreign Legion . . who walk down this path”. How has it come to this that your country is equating mercenaries who do the dirty work in other countries (such as the French do), as a model for your own country to fill some ADF vacancies for local deployment? That’s a 180 degree flip of logic.
What’s brewing?
I recall asking Will Heatherton, a bloke of some capacity in Australia’s Futures Fund, some 6-8 years ago, to not let Peter Costello to go anywhere near the capable investment board.
The message held within this comment is a testament to the Costello Liberal party Bully boy, who now crashes into media personnel as if it was a crass person’s intentional purpose.
Oh it’s such a coincidental shame that Oz govts and pretenders are strangulating common understanding by the full-on adoption of tautology, circumlocution and ‘doublespeak’. It seems to be the only way possible they can manage to sanitize their sanity.
Regardless of anything we [
ought] must understand that [history and the USA] common sense dictates that we remain glued to the Five-Eyes coalition. And to do that, we must speak [with the same forked tongues] as if one.The UN & ICJ & ICC really ought get up to speed. It’s OK that they monitor their edicts pertaining to crimes for aiding, abetting or promoting the carrying out of genocides, or for that matter, the ‘rules of war’. But times move on fast. Once doctors and apothecaries used to glean their insights from Arabic translations, and dispense them with their latest scrawl of convenience. We tried Esperanto – it looked good for a while, but in the 20thC many banned it, but the UN persisted, yet tired of it.
Now apparently it is vital that the UN & ICJ & ICC get up to speed with the latest Five-Eyes speak; ‘Desperanto’. Specifically designed by the world’s most expert prestidigitators. It’s all the go in diplomatic circles, especially with regard to Israel / Gaza and Russia / Ukraine and the bigger pictures therein.
Get with the programme, [
and] or perish.