Monday 24 November 2014

Freya Newman To Appear For Sentencing In Sydney Tuesday Morning | newmatilda.com

Freya Newman To Appear For Sentencing In Sydney Tuesday Morning | newmatilda.com

Freya Newman To Appear For Sentencing In Sydney Tuesday Morning



By Max Chalmers



Frances Abbott, pictured with father Tony Abbott and Whitehouse Institute owner Leanne Whitehouse.
Frances Abbott, pictured with father Tony Abbott and Whitehouse Institute owner Leanne Whitehouse.


The
long-running 'Frances Abbott secret scholarship' saga is expected to
come to a head tomorrow, with the sentencing of whistleblower Freya
Newman.




University
student Freya Newman will face the Downing Centre Local Court tomorrow
for what is expected to be the final time, after pleading guilty to
accessing the student records of the prime minister’s daughter Frances
Abbott earlier in the year.



In September Newman pleaded guilty to breaching Section 308(H) of the
NSW Crimes Act, after using the log in details of a fellow staff member
at the Whitehouse Institute of Design to retrieve Ms Abbott’s records.



The records revealed the prime minister’s daughter had paid just over $7,000 for her $68,000 degree, and received the award after just one meeting with Whitehouse Institute owner Leanne Whitehouse.


The Institute and the Prime Minister’s Office have continued to argue
the secret scholarship was granted on the basis of merit, but have been
contradicted by a former teacher of Ms Abbott, the school’s own website
(which still reports that no scholarships are available), as well as
other students at the Institute.



One fellow student described the scholarship as “beyond a joke” while one of Ms Abbott’s former teachers, Mellitios Kyriakidis
said: “Even from her class I could name 10 people more deserving either
for merit or financial need or both [of a scholarship].”



After helping to make the scholarship publicly known, Newman was pursued legally.


At an October hearing Newman’s lawyer, Tony Payne SC, argued that
Newman had not realised her actions were illegal, and that despite
decades of experience in criminal law, even he had not realised using
the log in details of another staff member to access records was a
criminal offence.



He submitted that Newman had been encouraged to access the records by
other staff members, but that she was also motivated by a sense of
injustice.



He also noted that Newman had pleaded guilty at the earliest possible
date and expressed contrition, including writing a letter of apology to
Ms Abbott.



Prime Minister Tony Abbott with daughter Frances and wife Margaret, at the Whitehouse Institute in December 2013.
Prime Minister Tony Abbott with daughter Frances and wife Margaret, at the Whitehouse Institute in December 2013.

Police are pushing for Newman to have a conviction recorded for the
offence, but have agreed it was on the lower end of offending,
effectively ruling out the possibility of a two-year jail sentence, the
maximum available for a breach of 308(H).



However, police prosecutor Amin Assaad told the Court in October that
although Newman had not gained “financially or personally” from her
actions, recording a conviction was necessary in order to deter other
potential offenders.



Frances Abbott recently spoke publicly for the first time about the
incident, forgiving Newman for accessing her records but comparing the
21-year-old to a “small child”.



“To be honest, it’s just like as a small child you learn it’s not
right to read someone’s diary. It’s not right to hack into anything,” Ms Abbott said.



After completing her studies Ms Abbott was given a job by the Whitehouse Institute, though a staff register revealed she was the only employee without a formal job description.


Her father, Prime Minister Tony Abbott, has still refused to update
his parliamentary interests register, despite acknowledging Frances was
his dependent at the time, and despite reporting numerous small benefits
received by his children, including flight upgrades and tickets to free
events.



Whitehouse Institute stands to benefit substantially from proposed
Abbott Government reforms to higher education, with more than $800
million in public funding being released to private colleges for the
first time.



* New Matilda is an independent Australian media publication. We rely predominantly on subscriptions for our survival. You can help fund us here. Or just help us by sharing this story on social media.


Friday 21 November 2014

How Israel, America and Australia make $ from dirty arm’s dealing

How Israel, America and Australia make $ from dirty arm’s dealing

How Israel, America and Australia make $ from dirty arm’s dealing



My weekly Guardian column:


It’s a good time to be in the weapons business. Three of
the leading US defence contractors, General Dynamics, Northrop Grumman
and Lockheed Martin, are all making unprecedented profits.



In December, Northrop will host an event at the Australian War
Memorial to mark the company’s expansion into the Asia-Pacific region.
It will be launched by Federal defence minister David Johnson. It’s a
curious location because, as Crikey’s tipster drily noted,
“without the endeavours of arms companies stretching back centuries,
there’d be significantly fewer Australians for the War Memorial to
commemorate”.



Northrop’s US-based corporate HQ decided in the last 18 months to open a major office in Australia. In March the company purchased
Qantas Defence Services, a firm that provides engine and aircraft
maintenance to the Australian Defence Force and global militaries. It
was an $80m deal. In September 2013, Northrop bought M5 Network Security, a Canberra-based cyber-security outfit.



Northrop appointed
Ian Irving as CEO of the Australian outfit in June, as part of a plan
to capitalise on the “strategically important market” of the Asia
Pacific. The centrepiece of that plan is to give smaller enterprises in
the defence space access to Northrop’s global supply chain.
That’s nothing to be sneezed at: they’re a vital defence contractor for
the US military and the company’s weapons have been used in Iraq,
Afghanistan and beyond.



Irving explained to Australian Defence Business Review in July that
he was pleased to sell the Australian government the firm’s MQ-4C Triton
surveillance drones. The machines will be used to monitor the nation’s borders and protect “energy resources” off northern Australia. Northrop Grumman Australia is set to make up to $3bn from selling the drones. Countless European nations are equally desperate to use drones to beat back asylum seekers.



Despite all this, a Northrop spokesman assured me that the company’s
growing presence in Australia has no connection to the Abbott
government’s increase in defence spending.



As Northrop’s Australian expansion makes clear, arms manufacturing
thrives in an integrated global defence space. Australia is an important
market for that other military powerhouse, Israel. In 2010 leading
Israeli arms company Elbit Systems sold a $300m command control system to the Australian military. In August 2013 Elbit announced
the $5.5m sale of “an investigation system” to the Australian federal
police that was tested in the occupied Palestinian territories of the
West Bank and Gaza.



That’s a trend that has become commonplace since the 9/11 attacks. As the Israeli newspaper Haaretz reported
in August, “[Weapons companies] need to sell in the large international
defence markets – where the products are scrutinized partly on the uses
the IDF makes of them on the battlefield.”



In August pro-Palestinian activists climbed
on the roof of Elbit’s Melbourne offices to protest its involvement in
the recent Israeli military incursions in Gaza, after which the
company’s share price soared. Amnesty International recently accused Israel and Hamas of committing war crimes during the war.



Defence contractors rarely stop with the profits from war and colonisation. In Britain, Lockheed Martin is now reportedly bidding for a massive National Health Service contract worth $2bn. In the US, Northrop was a presenting sponsor at a recent Washington DC event for honouring war veterans.


It’s rare to read about arms trading in the Australian press; even the country’s largest privately owned small arms supplier, Nioa,
rarely registers beyond the business pages. Our politicians are also
loathe to speak out, and are happy to have factories and bases in their
electorates, and donations for their parties.



The Greens do oppose military trading with Israel. Leader Christine
Milne tells me that, “given the continuing disregard by Israel of
international calls to halt settlement expansion in the occupied
Palestinian territories and the disproportionate response used against
the people of Gaza, the Australian Greens have repeatedly called on the
Australian government to halt all military cooperation and military
trade with Israel”.



Greens senator Lee Rhiannon
spoke in parliament last year, saying “if any of the military equipment
that Australia has sold to Israel has been used in Israel’s deplorable
wars in the Gaza strip which has killed thousands of civilians, the
Australian government should be held accountable for this”.



Australia, the 13th largest spender on arms globally, has a choice.
We can keep embracing these merchants of death, and the botched deals
and waste that they bring. Or we can reject the the rise of Northrop and
its associates, and refuse to participate in an investment culture that
continues a cycle of violence both at home and abroad.





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Thursday 20 November 2014

The collected works of Kathy Jackson: Submission to TURC

The collected works of Kathy Jackson: Submission to TURC



17


In her written submission to the Trade Union Royal
Commission, Kathy Jackson has humbly requested a statue be erected in
her honour and for her accusers to be tarred and feathered
pretty much. Peter Wicks from Wixxyleaks reports.








"How dare they present evidence and make accusations — don't they know I've been granted LNP immunity?"



SOME HAVE DESCRIBED IT as one of the country’s greatest works of fiction, but it is not a novel.



Some have described it as the desperate pleas of a condemned
criminal, but it is not coming from a prisoner on death row in Florida.




What is being referred to in the above statements is the ‘Written submissions on behalf of Kathy Jackson 14 November 2014’, signed off by Philip Beazley, Kathy Jackson’s solicitor.







The full document can be viewed in full via the link here.



Despite the claims of some, however, we cannot refer to Kathy Jackson
as a criminal — not yet at any rate. Jackson needs to go through the
legal process before being referred to that way. A concept that Jackson
herself chose to ignore with respect to Craig Thomson, whose appeal
commences on Monday.




Despite the immense amount of evidence of fraud, the problem has
always been getting Jackson towards justice, or even getting a criminal
investigation of her activities. Jackson has done everything humanly
possible to avoid scrutiny of any sort.




In the Federal Court action against her by the HSU, we have seen 18 breaches of court orders so far —ranging from the annoying to the ridiculous. This matter is now adjourned until February as Jackson is a voluntary patient in a psychiatric hospital.



Before the Trade Union Royal Commission (TURC) we saw Jackson claiming she was “ambushed before
fleeing; proceedings were then delayed while a lawyer was found for
her. After that, there were further delays when the unseemly Jackson
tried to remove the HSU’s lawyer Mark Irving from cross examining,
claiming he was an old “charity shag”.




Jackson, through her doctor, has claimed before Federal Court that she unable to provide instruction to
her lawyer until at least 15 January next year. In the written
submissions to the Royal Commission it even makes mention that they were
made without instruction from the client due to her medical condition.




So, where does Kathy Jackson’s submission come from?



Those in the legal profession to whom I have spoken claim it is
extraordinary and extremely unlikely that a solicitor would write
anything on behalf of a client without instruction from the client. Why
would a solicitor stick his neck out so far?




After all, if there is something in the submission not to Jackson’s
liking, could Mr Beazley be sued by Jackson for professional
malpractice? After all, this is a high stakes game — the consequences
flowing from a Royal Commission misstep will be far worse than a parking
fine.




Many of those to whom I have spoken, after reading the 42-page
document, say that they believe it was written by Jackson’s partner Michael Lawler and then signed by Mr Beazley. This suggestion is supported by the the last page signature section of the document.




As you can see in the picture below, there was a gap left between
where it states Beazley Singleton Lawyers and the date. In that gap
‘Solicitor for Katherine Jackson’ is hand written:








I find it odd that he wouldn’t have that typed in. It is almost as if
someone else typed up the submission and he penned it in later. It also
indicates he didn’t have the soft copy of the document to edit and
insert the words — that he, perhaps, only had a physical hard copy.




I also find it unusual that he chose to change pens after writing one word.



As for what is inside the submission, it is the same old “heroic
whistleblower who paid a hefty price for coming forward” line that,
really, nobody believes anymore — even her staunchest supporters in the
Liberal Party and right-wing media, who are now desperately trying to
distance themselves from her.




There is absolutely nothing heroic at all about someone who goes to
extraordinary lengths to avoid scrutiny of their actions. In fact I
believe the correct term would be gutless.




Pointing the finger at someone else to conceal your own actions and
to seek to take advantage of their downfall is not what I would refer to
as blowing the whistle, but rather the work of a gutless opportunist.




If there is a hefty price being paid by Jackson, it is not for
exposing others, as her mythmakers would like to convince us, but rather
it is for her own behaviour.




Jackson signed the cheques. Jackson set up the Peter Mac Settlement.
Jackson spent the $250,000 Peter Mac settlement from an account she set
up. Jackson spent like ten drunken sailors on the credit cards. The
union paid for Jackson’s children’s child care. Jackson took the
numerous trips. It is Jackson’s name as a Director of Neranto #10. It is
Jackson’s signature on Rob Elliot’s contract. It was Jackson that hired
Michael Lawler’s sons on the branch payroll, and so on and so on….








You can read the full saga of Jacksonville here.



Pointing the finger at others did not make these things occur —
Jackson made them occur. Now that attempts are being made to make her
accountable for her own actions, she seems desperate to avoid being held
to the same level of scrutiny she demands of everyone else.




Claims made in the submission that Jackson was open about not being
squeaky clean beforehand, as she admitted to having control of a slush
fund are highly misleading.




There has been no union slush fund — the only fund Jackson controlled was the NHDA fund,
which was a personal bank account for which Kathy Jackson was the
signatory. It was in no way a slush fund ‒ operating for the benefit of
members ‒ and nor did it operate like one.




If there is indeed a slush fund, it has yet to surface.



The submission also seeks to discredit the work of the media, and in particular Vex News, Wixxyleaks and Independent Australia.



The submission talks of an “ALP dirt file” and rumours. Well, I have
heard all sorts of scuttlebutt about the elleged behaviour of Jackson
and Lawler, but I have not published any of it. As for an ‘ALP dirt file’, I have yet to see anything of that nature, so if anybody out there has it, please feel free to pass it on.




The submission in paragraph 74 states:



‘The Commission should infer that Mr Landeryou and Mr Wicks
obtained most of the material that they advanced as “evidence” of
wrongdoing by Ms Jackson from Mr Williamson, Mr Mylan and/or Mr Brown
and that they used that material to make false allegations against Ms
Jackson.’





What utter gall to tell a Royal Commission what they should and shouldn’t infer.







Utter gall ... oh and Gilligan called.



I also find it amusing that the word evidence is between quotation
marks as if it is being derided. The evidence I have presented has been
by way of documentation. Jackson, on the other hand, cites floods
selectively destroying documents and claims stolen mythical exercise
books as evidence. I call that grasping.




I cannot speak for Mr Landeryou, however I can state that I have never met Michael Williamson nor received any documentation from him at all. I also asked Independent Australia
editor David Donovan and he has also never met him not received any
information from. I have however had a conversation with Williamson via
phone, though the conversation was short and in no way influenced any of
my articles. In fact, I’m sure Strikeforce Carnarvon would have a
recording of that conversation and nothing ever came of it. I have had
far longer conversations with Marco Bolano. David Donovan also said he had received a short call from Mr Williamson at one time, however it also had no influence.




I have had some dealings with Mr Mylan and Mr Brown, however I have
never received any documentation from Mr Brown at all, much to my
frustration. From Mr Mylan, I received a copy of a letter he sent to
Fair Work Australia regarding claims against Jackson. That’s all.




In paragraph 76, it goes on to say;



‘During 2013 Mr Brown and his supporters pursued Ms Jackson
through the Courts and continued to leak material to Mr Wicks who
smeared Kathy Jackson on his websites.’





Firstly, website would be more appropriate, I only have one. I am merely a contributor to Independent Australia.



However claims of smear and false allegations are incorrect. I would
content that they are only made before TURC because I cannot claim they
are privileged statements and submissions and so I cannot claim
defamation about them. It is, effectively, a free kick to those seeking
to downplay the evidence against Jackson.




It is worth noting though that, although none of my evidence has ever
been disputed in a serious manner, nor has my commentary been forced to
be removed. This is despite the involvement of defamation lawyers
acting on Michael Lawler’s behalf.




Jackson’s submission takes a twist when it comes to her treatment by
the Royal Commission, which most have described as soft or as with “kid
gloves”, and her claim of an “ambush” when the questioning took a turn
for the worse, from her perspective.




The submission states on page 17, paragraph 82 [IA emphasis]:



'Counsel Assisting initially foreshadowed a thematic approach to hearings involving Ms Jackson. That initial plan however was not adhered to.'








To me, that suggests a deal was done prior to the hearings that the
Commission was going to go soft on Jackson. And, indeed, many have
highlighted by the different style of questioning Craig McGregor faced compared to the Jackson factional cronies that came before him.




Once again, this brings the integrity of the Royal Commission into
question. Why would a deal be done to go soft on Jackson and, if so,
under whose authority?




George Brandis, perhaps?



Anybody who wants some comic relief from all the legal talk and
mountains of evidence would do well to check out the conclusion on the
last two pages of the submission; here’s a taste:




‘She has been pilloried in the media, deserted by her union, left
without a salary, dragged through the courts and had her health
destroyed.’





It has taken the media a few years to see the real Kathy, it’s called catching up.



Jackson is currently on unpaid sick leave by her own volition, as she has reportedly been for around two years.



Jackson deserted her own union the moment she took money from it in an allegedly unlawful manner.



Being “dragged through the courts” is a consequence of her own
behaviour and if she is as innocent as she claims, I would suggest this
is something she should welcome rather than seek to avoid.




As for Jackson’s health, there are positive signs. Apparently,
although she is still not mentally fit to provide legal instruction on
matters to do with the $1.4 million she is in Federal court over, it has
been alleged she is apparently mentally fit enough to give legal
instruction in relation to lodging a workers compensation claim. That’s
got to be a step forward.




Paragraph 261 section (b) of the submission says the Commission should make findings that:



‘Give her a measure of vindication by acknowledging what she has done and condemning those who have sought to destroy her.’








Perhaps a statue erected in her honour?



They’ve got to be kidding … right?



But I fear they aren’t.



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Wednesday 12 November 2014

Jackson’s referral to Victoria Police — and IA's long lonely slog for justice

Jackson’s referral to Victoria Police — and IA's long lonely slog for justice



Peter Wicks 11



In the MSM, Kathy
Jackson has gone from being a "whistleblower" to being "controversial".
It has taken them a long time to accept the obvious. (Image screenshot
Herald Sun)


With Kathy Jackson being referred to the Victoria Police
for the alleged theft of $900,000, many in her former cheer squad must
be feeling fairly pretty stupid this morning, writes
Peter Wicks from Wixxyleaks.




I CAN ONLY WONDER HOW STUPID some people must be feeling today.



Yesterday, it was announced that
Kathy Jackson will be referred to Victorian Police over the alleged
theft of approximately $900,000. This is the same Kathy Jackson that is
still facing civil proceedings in the Federal Court over $1.4 million in member’s funds she is alleged to have misappropriated.



Jackson has, of course, checked herself into a psychiatric hospital as a voluntary patient over an alleged mental health issue.



Witnesses have claimed to have seen her pottering around the shopping centres in Wollongong and having pedicures done, however by night she is in hospital for what the court has been told are serious issues.



It is fantastic to see that Jackson is able to get around and perform
normal functions and I can only assume that this is a sign that her
therapy is going well. This is incredibly encouraging as I am assuming
that this will mean no more delays in the court case and, given it looks
like a speedy recovery is being made, she will finally be ready to
proceed when the case resumes in February.



For those who have been singing the praises of Kathy Jackson for the
past two years, the news of her being referred to police for criminal
investigation must come as a bit of a blow.





Yesterday, acting national secretary Chris Brown had this to say on the evidence of Jackson’s alleged crimes.




“It makes the Craig Thomson stuff pale into insignificance.”


That must be music to the ears of Thomson, whose appeal is due back in Magistrates Court later this month.



For the past few years, however, it is worth remembering that there
have been those who have screamed for Thomson to be hung from the
highest branch of the highest tree and those who have held Jackson is
such high esteem.



Senior Liberals like Tony Abbott, Christopher Pyne, George Brandis
and Eric Abetz. Shock jocks like Ray Hadley, Chris Smith and Paul
Murray. Newspaper columnists like Piers Ackerman and Andrew Bolt.
Bloggers like Michael Smith.





All must be feeling pretty daft this morning.



I’m sure some, like the politicians, will ignore it;
some of the shock jocks may try to say that Jackson was looked into
previously and police dropped the matter and it is only the trade union
referring it to them again.



The last investigation into Jackson stalled as evidence was lacking.
Now, there is an over-abundance of evidence for police to wade through.
While it is true that the HSU is referring the matter to police, it
comes soon after the counsel assisting the Trade Union Royal Commission recommended the matter of the infamous Peter Mac settlement be referred to the Department of Public Prosecution.



Many, however, will be scratching their heads and wondering how they were so sucked in by Jackson.



Having had the opportunity to meet Kathy to ask her questions, and
having seen numerous interviews and watching her testimony at the Royal
Commission, I have wondered the same. From all I have seen, heard and
experienced, she is utterly unconvincing.



Perhaps these people were just so blinded by their agenda to destroy a
hung parliament they could see little else but the political mileage to
be gained. If that was indeed the case, then it is only fitting that
they are now stuck in reverse and are likely to end up behind where they
originally started.



The evidence was there and publicly available, however those with an agenda made the conscious decision not to look at it.





For Kathy, it must be disappointing that the legal advice of her partner Michael Lawler
has been of such little value and only succeeded in delaying the
inevitable. I’m sure Jackson was convinced he was one of the world’s
most intelligent men. The realisation that he is clearly not even close
must be crushing. Lawler will have his own issues holding onto his role
as the vice president of Fair Work Commission, given his involvement in
the HSU saga has caused the industrial affairs watchdog’s credibility so
much damage.



This whole saga has shown us the importance of independent media and also the power of the mainstream media.



As most would realise, Kathy Jackson has been hailed as an heroic
whistleblower by the mainstream press for years. It is only through
independent media that the other side of the story has been explored and
the evidence brought out and displayed.



For this we have sites like Independent Australia –
and in particular editor David Donovan, who has also put a hell of a
lot of work into this investigation – to be thankful for; because I can
assure you, the effort comes at a price.



Along with all of the work, along the way, there have been threats,
smear campaigns and defamation lawyers to fend off, and so I have a debt
of gratitude towards Independent Australia for having the guts to persist and soldier on where other mainstream news sources feared to tread.





The power of the mainstream has also had a lot to do with where the matter has come to today.



Whilst the mainstream were responsible for whipping up the frenzy
that saw Jackson elevated to such dizzy heights, it has also been the
mainstream that have brought her crashing down.



I was amazed at how those in the media room at the Royal Commission
were so keen to see Jackson fall from her perch. It was like they
suddenly realised that before them was a woman who had strung them along
for years and used them almost as an accomplice to achieve her goals.



This has much to do with the integrity and journalistic standards of a few journalists. In particular Nick McKenzie and Ben Schneiders of Fairfax and Brad Norington of News Ltd have been vital in opening the public’s eyes.



I find it amusing that Kathy Jackson finds herself in the same
position with the media that Craig Thomson found himself in two years
ago.



I hope she finds it comfortable.



Follow Peter Wicks on Twitter @madwixxy. Catch up on the full Jacksonville
saga here. Peter Wicks will be talking about Jacksonville at an IA
function at the Summer Hill Hotel in Sydney on November 21. Book your
tickets here.






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Sunday 2 November 2014

Control fraud: Australian banksters rort with impunity

Control fraud: Australian banksters rort with impunity



8



(Image screenshot smh.com.au)


There has never been a better time to be a criminal in
Australia — so long as you’re a white-collar criminal in the finance
industry, writes Philip Soos from Deakin University comments (via The Conversation).




RECENTLY, the head of the Australian Securities and Investments
Commission (ASIC), Greg Medcraft, called Australia a “paradise” for white-collar criminals (note image right).




Soon after, he recanted,
claiming he didn’t want the country to become a haven for financial
fraudsters. This rephrasing likely followed on from Finance Minister
Mathias Cormann leaning on Medcraft.




The mass media has done an admirable job bringing the Commonwealth
Bank (CBA) financial planner scandal to light, forcing the ASIC to
finally investigate, the Senate to inquire and the CBA to apologise and
provide compensation. Despite this, frauds like these are universally downplayed as isolated events, perpetrated by “bad apples” in an otherwise trustworthy FIRE (finance, insurance and real estate) sector.




Australia’s economic history shows otherwise.



Our past is littered with a surprisingly large number of control
frauds, which government and regulators have done next to nothing to
prevent and rarely prosecute. The mounting frauds appear emboldened by
deregulation and liberalisation of banking and finance.




The following table provides an overview of the major frauds committed by the FIRE sector in recent decades:







The term “control fraud” refers to the systematic, highly damaging,
institution-driven and directed nature of the fraud, in contrast to
common low-level frauds. The weapon of choice is accounting.




William K. Black’s book The Best Way to Rob a Bank is to Own One provides an excellent account of regulatory public executives who, during the United States Savings and Loan crisis
in the 1980s, actively protected the worst fraudsters in the industry,
while damning “mum and dad” investors. Black later developed the concept of control fraud, whereby executives use the institution they manage as the mechanism to commit fraud.




Control frauds
typically involve a four-part strategy: exponential loan growth,
lending to uncreditworthy borrowers, extreme leverage and minimal loss
reserves (plus obnoxious pay packets for bank CEOs). The obvious
presence of these four elements in Australia’s banking system
demonstrates the risk to stability which lies at the centre of finance.






Why fraud goes undetected



Australian economist Phillip J. Anderson documented in his book on US real estate cycles from 1800 to 2008 that fraud is never detected by the mainstream for two reasons.



The first is that FIRE sector executives and managers are extremely
powerful politically, financially and legally, so few will tangle with
them.




Secondly, during economic booms, the public is typically too
self-centred to care, as long as the predations don’t affect the
majority.




ASIC refuses to investigate the control frauds, instead choosing to
offer up a number of excuses: lack of funding, jurisdictional
boundaries, ineffective laws and so on.




Thankfully, 20-year veteran financial consumer activist Denise Brailey
does what ASIC declines to do on a A$400 million dollar budget.
Brailey, a criminologist, has helped unearth and sue control frauds and
recalcitrant state governments over the years.




According to Brailey, Australia has two major control frauds rapidly growing without restraint: a subprime mortgage scandal and debenture-funded pyramid business scams. The former is similar to the U.S. subprime mortgage scandal.



Brailey estimates these control frauds could each cause over A$100
billion in losses. She has warned ASIC about these control frauds for
over a decade.






Paradise untouched



It has never been a better time to be a criminal, as long as you’re a
white-collar criminal in the FIRE sector. Bankers involved with the CBA
financial planning scandal have still managed to advance their careers and win bonuses.




History enlightens us, which is why the history of control frauds
isn’t taught anywhere. Political and economic elites want the public
kept blind to the plague of theft they’ve been engaged in.




In Australia, this history is left to individuals like Denise Brailey and (IA contributor) Dr Evan Jones to tell, whose work was used in my recently published book, co-authored with (fellow IA contributor) Paul D. Egan.



The disparity between white and blue-collar criminals has never been larger.



If I defraud my neighbour of $10,000, I’ll be charged, prosecuted and sent to jail for years.



In contrast, a banking executive
who robs borrowers and loots or destroys untold billions of dollars is
praised by politicians, business groups, the mass media and the
economics profession for “wealth creation”.




Australia’s credit-based banking system – liberated from
responsibility by deregulation, self-regulation, de-supervision and de
facto decriminalisation – has and will inevitably continue to generate
toxic and recurring control frauds. The FIRE sector cannot be allowed to
profit from control fraud. Government has a civic obligation to
prosecute those who perform criminal acts on innocent parties. We know
this as the rule of law.






Academia could offer an independent voice against these control
frauds, but the legal and economics professions are mute before the FIRE
sector, which employs many directly and indirectly. As Black
documented, mainstream economists have intentionally ignored the dangers
of control frauds, proclaiming that “private market discipline” and
“rational agents” can prevent frauds from even occurring — 
the fallacious “market knows best” line of  reasoning.




The full extent of these control frauds is yet to be revealed as the
government, regulators and external dispute resolution organisations
(RBA, ASIC, APRA, ATO, AFP, Treasury, FOS and COSL) resolutely refuse to
investigate. Meanwhile, control frauds are free to weave a trail of
forced bankruptcies, homelessness, poverty, desperation, depression and
suicide.




History shows government only acts when the predations of control
frauds break in the mass media. The two largest control frauds, the
debenture-funded pyramid business scams and subprime mortgage scandal,
are running rampant. Unfortunately, government will only grudgingly do
something when the number of victims climbs far enough that they become
too visible to openly ignore – but, by then, it will be too late.




Nevertheless, a Royal Commission is necessary to shine a light on the transgressions of the FIRE sector.





This article was originally published on The Conversation. Read the original article. Read the finance industry exposés of Dr Evan Jones here.