Apparently we will be going to a double dissolution election in less than three months because union corruption in the construction industry has so hamstrung the economy that the government can no longer function.
What is even more apparent is that the government has very little will to address the vastly more corrosive corruption in business and government.
In October 2012, the OECD produced a highly critical report on how corporate bribery allegations were handled in Australia.
“The Working Group on Bribery has serious concerns that overall enforcement of the foreign bribery offence to date has been extremely low. Only one foreign bribery case has led to prosecutions. These prosecutions were commenced in 2011 and are on-going. Out of 28 foreign bribery referrals that have been received by the Australian Federal Police (AFP), 21 have been concluded without charges. The Working Group thus recommends that the AFP take sufficient steps to ensure that foreign bribery allegations are not prematurely closed, and be more proactive in gathering information from diverse sources at the pre-investigative stage.”
The report makes many recommendations including stressing the importance of ASIC’s role.
“Regarding the Australian Securities and Investment Commission (ASIC), the Working Group recommends that Australia take steps to ensure that ASIC‘s experience and expertise in investigating corporate economic crimes are used to assist the AFP to prevent, detect and investigate foreign bribery.”
Then along came Hockey’s first budget in 2014 which flagged a cut of $120 million to ASIC’s funding over four years. His next budget cut a further $18 million over the next three to four years.
ASIC chairman Greg Medcraft and head of the Abbott government’s financial system inquiry David Murray both slammed the cuts saying ASIC was underfunded as is. They both also bemoaned the weak penalties imposed for crimes exposed by ASIC.
As a result of the cuts, ASIC has scaled back its “cop on the beat” activities uncovering corporate wrongdoing and over 200 jobs have been lost so far.
The regulator’s chief of operations, Carlos Iglesias, said proactive surveillance in which investigators target as-yet unreported corporate misbehaviour was part of the agency’s “discretionary” activities which had to be scaled back in order to continue its “statutory” role of registering and regulating companies.
But even that looks shaky.
Under the banner of “smaller government reforms” the 2015 budget revealed the government will provide $11.6 million in 2015-16 to the Department of Finance to undertake a competitive tender process to market test the capacity of a private provider to upgrade and operate the Australian Securities and Investment Commission (ASIC) Registry and to “develop value added products.” In addition, it will provide ASIC with $1 million in 2015-16 to assist with preparations.
The OECD report said that, of the 28 possible corporate bribery cases referred to the AFP, 12 were “evaluated, rejected for investigation, and ‘terminated’, while 9 cases were accepted for investigation but had been ‘finalised’ without resulting in charges because of insufficient evidence. There currently are 7 cases on-going.”
Annex 4 of the report gives descriptions of certain terminated, finalised or ongoing investigations “anonymised at the request of the Australian government.”
One of the terminated cases was the Casino Foreign Bribery Case
“In 2009, authorities in a foreign country brought charges against one of their officials for domestic bribery and listed two projects by an Australian casino company as – suspect projects in the indictment. According to media reports, indications of bribery included the fact that the casinos were granted land that was originally planned for the construction of a university, and construction began before formal rezoning procedures were completed and recorded. Australia reported to the Working Group that the AFP supported investigations by the foreign authorities, but did not start a domestic investigation.”
In 2009, the SMH reported that “two casinos partly controlled by billionaire James Packer’s Crown Ltd have been linked to a major bribery and money-laundering case in Macau.”
In August 2014, they further reported that “Taiwanese prosecutors have charged a subsidiary of James Packer’s Macau casino joint venture over the alleged illegal channeling of hundreds of millions of dollars between Taiwan and the gambling enclave.”
But of course, the owner of Barangaroo has done nothing wrong. After all, didn’t our own Prime Minister escort him on a trip to meet Chinese government officials and businessmen?
Under ‘finalised’, the report also mentions the AWB scandal.
“Wheat Board Case
Two unnamed former employees of an Australian grain marketing organisation were alleged to have bribed officials in three foreign countries during the 1990s, and that payments in two foreign countries continued in 2000 after enactment of anti-bribery laws. The AFP closed an investigation into corruption in three foreign countries for lack of evidence, based on the legal advice received from independent Queen‘s Counsel that there was no reasonable prospect of conviction and that it was unclear whether breach of UN sanctions was a crime in Australia. The AFP has assisted in civil proceedings by ASIC against six former directors and officers of the Australian organisation. As of June 2012, two directors of the grain marketing organisation have been found to have contravened the Corporations Act.”
A May 2015 update from the OECD said “many of the OECD Working Group’s recommendations remain only partially implemented or not implemented at all.”
“Many well known Australian companies have become embroiled in scandals involving the bribery of foreign officials in order to win or retain business abroad. Since October 2012, 15 new foreign bribery allegations have surfaced involving Australian companies and there are currently 17 investigations on foot.”
As more evidence comes to light every day about corruption in business, tax avoidance, bribes, and questionable political donations, remind me again what is crippling the economy?
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