ASIC blows bureaucratic smoke

ScreenHunter_21 Apr. 10 19.29

From ASIC chief Greg Medcraft today. From the AFR:

“Today, I want to set the record straight. My point is that in any foreign bribery investigation, criminal proceedings are the main game,” he said in a copy of his speech to the American Chamber of Commerce in Australia. “ASIC cannot – and will not – do anything to jeopardise the success of criminal actions. This is something the media has mostly chosen to ignore.” Mr Medcraft said ASIC’s role was “limited” to investigations about corporations law.

“Bribery of foreign officials falls under the Commonwealth Criminal Code, and that is a law mainly enforced by the Australian Federal Police. Not ASIC,” he said. “This means it is the AFP that is responsible for investigating foreign bribery and corruption, and taking criminal action through the courts. They are the bribery specialists.

“They have a dedicated Fraud and Anti-Corruption Centre. They have officers in foreign jurisdictions as well as forensic accountants and lawyers. And, they have access to international intelligence, such as Interpol.”

That said, ASIC and the federal police had recently signed a memorandum of understanding spelling out how the two aqencies will co-ordinate actions. …But Mr Medcraft was adamant that ASIC would step only after the federal police had concluded their work unless there were exceptional circumstances. This was because of the different standards applied in criminal cases compared to civil investigations and the higher penalties.

There are three points to make. The Four Corners expose on the case of corruption and bribery at RBA subsidiaries made the point that the Federal Police had investigated Securency then passed the issue to ASIC, where it disappeared. From the program:

The AFP handed its evidence to the Australian Securities and Investments Commission (ASIC). In a statement, ASIC said it had reviewed the material and decided not to take the matter further. The RBA sold its 50 per cent share in Securency earlier this year.

The program also made clear that ASIC never interviewed the prime witness in the parallel case at Note Printing Australia even though doing so would make eminent sense. This is made all the more peculiar by ASIC’s own defense: that it read “10,000 documents” before dismissing the case. To put it mildly, it needs to get out more.

The second point is that Australia’s white collar laws are simply too soft. In the comparable laws in the US and UK – the Foreign Corrupt Practices Act and Bribery Act – make clear that corrupt practices are criminal offenses that will be prosecuted at home.

In his speech today, Medcraft didn’t even mention the case of the RBA subsidiaries.

Given these, how are we to take Medcraft’s ASIC on trust – that it has the will to police anti-corruption behaviour – when instead of arguing for a fix to the problems it hides behind them?

David Llewellyn-Smith
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Comments

  1. Really HnH this is small cheese if seen in light of the domiciles the alleged activities are said to have occurred.

    Better to concentrate on corruption within the Australian jurisdiction.

    • -100000

      How about you fly over to Iraq and ask the locals what they think of Australian companies paying their ruthless dictator money to live in luxury and prolong the reign of terror.

      But who cares some Australian made a few bucks running the gauntlet.

      Cheers 3D1K

      • Tell you what MoW there are a lot of Iraqis that were not affected by the Saddam regime and life went on in a remarkably normal fashion – post UN sanctions and US/Oz invasion the deaths of hundreds of thousands of civilians, dislocation in the civil sphere, further erosion of civil rights and even more robust divisions between the Sunni and the Shia and honestly I question the wisdom of the whole Iraq intervention.

      • Well done 3D1K

        If the evil prevailed and flourished for a bit longer who should point the finger at some aussie making a profit out of the misery.

        Maybe the continuation of the misery is the fact that Saddam’s henchmen have millions in O/S bank accounts to support their guerrilla war and I wonder were they got the money.

  2. True obfuscation.

    In many cases the civil proceeding have a very positive effect on any subsequent criminal investigation.

    The civil matters have compulsory aspects to the duty of the director to report and conduct himself, which can present any criminal investigation with a detailed framework of who did what and when.

    Although this information obtained under compulsion cannot be used in the criminal matter in greatly assist where people rely on the right to silence.

    In many cases the civil side is conducted to a point and then when deemed all the info has been obtained the criminal matter takes over and utilises the information obtained to conduct the O/S part of the inquiry and ground search warrants.

    In essence a great finger pointing exercise so everybody is confused as who should be doing what.

    They will work it out in 12 months time by which time the heat and interest wold have evaporated.

    • Can’t see any Bank Board members charged, or politicians taking responsibility for Securency’s sale for peanuts. Can see huge amount of power transferred offshore to Securency’s competition. I don’t think foreign bribery of a public official was an offence prior to 2000 but I could be wrong.

      • Absolutely Fitz

        If they were serious they would have stood down Darth Stevens for not standing down his deputy as he didn’t report the matter to him and his deputy dog for not reporting straight away.

        Most people are like 3D1K and think that what happens in the boardroom should stay in the boardroom and doesn’t concern the minions.

      • That’s not quite what I think MoW! Sometimes but not always 😉

        I just don’t think the current crop of alleged corruption is particularly important in the grand scheme of things. There are more important fish to fry.

      • Good on you 3D1K

        Wood for the trees and all that.

        We only know about his because some poor righteous bugger with backbone, stood up, spoke, got the SH*T kicked out of them, lost their jobs, I suppose no reference and are on struggle street.

        I suppose 3D1K it only sparks you interest when it affects your interests and you wouldn’t have been so stupid as to speak up in the first place would you.

        Somehow when you get paid the big bucks the buck never lands on your table???

  3. Episode 20

    Not so long ago in a galaxy not so far away……

    Darth Stevens: What is it, Captain?

    Captain Tanzer: My Lord, the fleet has moved out of lightspeed. Scan has detected an energy field protecting an area of the cyberspace. The field is strong enough to deflect any bombardment.

    Darth Stevens: The whistle blowers are alerted to our presence. Admiral Medcraft came out of lightspeed too close to the system.

    Captain Tanzer: He felt surprise…

    Darth Stevens: He is as clumsy as he is stupid. Captain, prepare your troops for a physical attack.

    Captain Tanzer: Yes, my Lord.

    ***

    Admiral Medcraft: Lord Stevens, the fleet has moved out of lightspeed and we’re preparing to…

    (Choking sound)

    Darth Stevens: You have failed me for the last time, Admiral. Captain Tanzer?

    Captain Tanzer: Yes, my lord?

    Darth Stevens: Make ready to land our troops beyond their energy field, and destroy the secret document, so that nothing gets off the system.

    Darth Stevens: You are in command now, Admiral Tanzer.

    Admiral Tanzer: Thank you, Lord Stevens.

    ***

    Darth Stevens: Yes, Admiral?

    Admiral Tanzer: Our ships have sighted the secret document, Lord. But it has entered an AFP field and we cannot risk…

    Darth Stevens: The AFP does not concern me, Admiral. I want that secret document, not excuses.

  4. I’m assuming everyone else read that in Jame’s Earl Jones’ voice complete with heavy breathing 🙂

    As a former constabulary officer, I lost count of the number of times that investigations that may have involved people in the public eye were handed up the line never to proceed to prosecution. This does not surprise me one bit.

  5. ASIC are much too busy chasing up their annual fees and penalties from all the small businesses to worry about nitpicking over who bribed who, or the harmless shenanigans in the corridors of power.

    ASIC is not toothless or tardy to enforce the law – one day late on your $185 ASIC fee and watch as they release their bureaucratic hounds of hell on your sorry ass. Billions of machine instructions of some of the finest data processing software this side of the NSA will squeeze every last dollar from your wretched overdraft when they hunt you down.

    Which brings up another point. I have long held the opinion that if you really want to reduce the crime rate, you should prosecute the victims. It makes sense really:-

    1. The victim is usually much easier to apprehend – they often turn themselves in. This is very cost effective.

    2. Once you start prosecuting victims of crime, the reported crime rate will drop enormously. Law enforcement resources can be redeployed into more useful activities such as traffic fines and infringements.

    I think Greg Mudcruft has twigged to this and is already ahead of the curve. It’s the way of the future.

  6. “The second point is that Australia’s white collar laws are simply too soft. In the comparable laws in the US and UK – the Foreign Corrupt Practices Act and Bribery Act – make clear that corrupt practices are criminal offenses that will be prosecuted at home.”

    The legal situation in Australia is basically identical to that in the USA and UK, in accordance with Australia’s responsibilities as a signatory of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Convention was largely based upon the Foreign Corrupt Practices Act.

    Presently on conviction in Australia the maximum penalty for an individual is 10 years.

    ASIC would be more properly involved in potential breaches of director’s duties etc.

    • GunnamattaMEMBER

      All good and well chief, but

      Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions include…

      Brazil, Colombia, Bulgaria, Israel, Russia, Turkey,

      all of which would warrant a look for corrupt practices on their day.

      ASIC may or may not be more properly involved in breaches of a directors duties, but they were handed the issues by the Australian Federal Police.

      If they werent the right people to look at it you would have to ask why the AFP tossed it their way, not to mention who the AFP should toss it to, and why the AFP tossed it, as well as why the AFP didnt just toss the issue out if they didnt think there was an issue.

      At a broader level unlike the UK and US which have dedicated Acts covering the subject Australia is still charging (or threatening to – feel free to guess at the number of convictions and volume of fines shelled out under the existing provisions) under the Criminal Code. It still has some particularly hazy wording around what is a ‘facilitation payment’ (and a working group still out trying to figure what it means). The 10 year conviction or AUD $1.7 million fine (that’ll frighten ’em – compared with the $450 million Siemens shelled out in 2008 under the FCPA) came into force in 2010-11 (which could conceivably be why anyone would baulk at investigating and pursuing someone now for offences prior to then, if they thought the punishments applicable were so puny as to not warrant the effort).

      Ultimately these days many global companies know that if they do something dubious they will have their knuckles ground in their home jurisdictions, and that it could be painful. More to the point in some corrupt parts of the world the threat that their counterparty may dob them in is increasingly frightening. Australian companies would presumably run the risk of an administrative bunfight over who should look at the issue or whether it was worth doing it.

  7. Actually MOW, I agree with 3d1k, that there are bigger fish to fry. Gunna, I believe the Securency prosecution is the only one ever launched in Oz. I think it is just a distraction. The uk turned polymer a month ago . Canada a few months ago. Australian technology used by a British company. Securency was sold by buffoons for 63$ m last February, worried into the sale, when courage and a cool head was required the baby was thrown out with the bath water. The intelligence and opportunities that arise from printing another country’s money supply I are huge. All given away to those who have always had them. Just follow the money……it is the Australian taxpayer that has been cheated out of polymer technology for peanuts…..it was worth billions…just follow the money.

    • “Actually MOW, I agree with 3d1k, that there are bigger fish to fry.”

      +1

      As I stated elsewhere, I think Darth Stevens’ predecessors (whoever was in charge in 1998) are the most guilty ones in this particular saga. If they are off the hook because of the statute of limitations, then it is really a shame.

    • Fitz

      You have no idea as the scale of this issue as the investigation has not been completed so how do you know that this issue does not warrant the investigation??

      This issue brings into question what memorandums of understanding are in place on how, those bodies that are funded to investigate these matters, have failed to identify who should do what. These bodies are central to the good governance of corporate Aus.

      Once the investigation is complete you will get a broader picture of internal protocols and whether there is an culture which engenders this type of behavior.

      But at the core I suppose that if you don’t think that paying a murderous dictator against the will of the UN is not abhorrent then there is nothing that will sway you unless it affect your own and then lets see how you react.

  8. ANyone who watched the squirming blinking hand gesturing fool would immediately understand why he was given the job. He is a STOOGE!