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Westpac Letters Exposed Australia's Worst Case of Corporate Crime

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The Westpac Letters revealed the worst case of corporate crime in Australian financial history. These letters were written in 1987 to Warwick Kent, Chief General Manager, Corporate & International, Westpac, Sydney by Paddy Jones, senior partner of Allen Allen & Hemsley. Paddy Jones had been given internal bank documents to determine if there was any problem. His advice was that they represented "devastating" evidence of fraud and perversion of justice. Australia's most prominent lawyers advised Westpac senior executives how they might evade legitimate claims for compensation on parity losses, excessive point taking through secret commissions, fraudulent hedges, and deal switching by withholding evidence and stonewalling claimants. In his testimony before the infamous Martin Inquiry, Mr. Francis Galbally of Galbally and OBryan a top criminal law firm in Australia stated,
"...there is a prima facie case that senior executives of Westpac and the advisors had been guilty of aiding and abetting the initial deception or being an accessory after the fact for being party to a conspiracy. I say prima facie."
Tom Valentine, Professor of Finance and Director for Applied Finance, University of Technology, Sydney, told the Martin inquiry
I do not believe our legal system has the proper capacity to deal with this particular question. Quite apart from the cost it is fairly obvious from listening to the Judges and lawyers involved in these cases that they have a minimal understanding of the issues involved. As such I cannot believe that the court is the right place for these issues to be solved.
Judge Terry Cole, whose father was a Commonwealth Bank of Australia (CBA) manager, having previously condemned two borrowers, said at a third hearing against a CBA borrower,
"I have not the slightest idea what managing a foreign currency loan is...really just a matter of looking at the exchange is it not?"
Of course Judge Cole would not recuse himself for conflict of interest or incompetence. A Royal Commission would not allow conflict of interest or incompetence.

Evan Jones, Professor of Political Economics at the University of Sydney has examined the Dwyer v CBA history and says of the bank's counselor, Sackar QC, that he "was diversionary, abusive and manipulative." Of the performance of Acting Judge Staff he says, "In general, Staff's judgement is reprehensible in its sloppiness and impropriety. It puts at risk the reputation of the Australian judicial system as a vehicle for justice." Of the Appellate Judges, Sheller, Clarke and Handley, Professor Jones notes that,

"The Appeal judges to a man exposed themselves during the hearing as novices on currencies.

[ ... ]

 The Appeal judges were so flummoxed by the withholding tax issue that they recommended referral back to the Commercial Division of the NSW Supreme Court."

After losing their cases, some borrowers discovered that their own Counsel or even the presiding judge, as a Barrister, had accepted briefs and retainers from the bank that was the defendant in their litigation. Such a conflict of interest should have led to the Counsel or Judge removing themselves from the case. This failure to disclose demonstrates the contempt some judges have for the law and the contempt the banks have for the legal system and yet they receive preferential treatment from the courts.

The Australian Competition & Consumer Commission (ACCC) has responded that they are more concerned with addressing "matters with a broader impact on consumers" as though the cost of a $3.5 Billion to $5 Billion fraud in Australia isn't enough to warrant a Royal Commission. The ACCC saw fit to investigate and successfully prosecute Chats House Investments Pty Ltd on behalf of 26 investors who each lost $20,000 plus margin calls in foreign currency transactions. Barely more than half a million dollars, the Chats decision is peanuts compared to the losses to 3500 to 5000 Australians averaging millions of dollars each. But ACCC wasn't challenging a bank. The issues are much the same. Branson J said in his decision,

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"I find that (Chats) deliberately and unconscientiously took advantage of its superior position of understanding and knowledge in circumstances in which its clients were in a position of special disadvantage and without the ability to make judgements in their own best interests."
That's exactly what happened to several thousand Australians when the banks talked them into foreign currency loans, assured them that they were safe investments, and proceeded to pillage their accounts. In a small minority of court cases, that's what honest judges decided. The majority of Foreign Currency Loan borrowers lost and lost big, but government has been unresponsive in its duty to Australians. To make themselves look as though they were responding to their constituents, the Parliament set up the Martin Inquiry with a narrow reference to make sure that the truth was suppressed ...and a Royal Commission avoided. Steve Martin, its chairman, did his hatchet job and retired shortly thereafter to a career as an academic at the University of Wollongong and a highly paid consultant.

The crime has not gone away. It remains a blot on Australia's banking institutions, courts, Parliament, and government agencies.

Australia needs an effective Royal Commission to avert a constitutional crisis; but a compliant mainstream media has stopped covering such news because it is threatened by a pullout of its advertisers. Still worse, the ownership of the media has been been infiltrated by corporate privilege and perspective.

Corporate crime has gone unregulated and unpunished. This week, Westpac merged with St. Georges, a smaller bank, to become the largest bank in Australia. Parliament led by Labor once again has not made a fuss about the criminal past of Westpac and let the merger pass without further examination of the corporate mindset that was caught stealing twenty years ago and has never been called to account for their crime.

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Labor under Hawke and Keating had followed upon the recommendations to deregulate banks proposed by John Howard in the previous Liberal government. With deregulation came a marked shift in corporate responsibility and conscience. As in many other nations, the deregulation led to massive concentration of money and property. Banking malpractice is a systemic problem for small business. Commonwealth Bank of Australia and Westpac were by no means the only banks involved in malpractice and theft on a grand scale. National Australia Bank (NAB) was also busily defrauding its customers using various methods to strip their assets, forcing them into default and appointing a liquidator who would sell to insiders far under the market price.

Obviously this was a global tactic to accomplish the globalist strategy of increased control. Deregulation in Australia and America proceeded in about the same pattern and at about the same time. The result can be seen in the suffering of people disenfranchised from their fair share of the economic pie.

See the previous two articles in this series:

Wednesday, October 22, 2008


Fraudulent Banking in Australia Offers a Peek at Global Bank Fraud

Fraudulent banking has been unmasked in Australia over the past 20 years and the lessons to be learned can be applied in America and Europe if not globally. A courageous senator and many whistleblowers in Australia have ripped aside the illusion of banks as pillars of the community. They show the collusion between banks, government agencies, media, and the courts to maintain a financial mafia that steals from the people daily.

 

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Thursday, October 23, 2008


Australian Injustice, Court Jesters, and Constitutional Crisis

Australian banks fraudulently marketed unhedged Foreign Currency Loans to over 3500-5000 small businessmen and farmers, a massive fraud and banking malpractice breaching the Trade Practices Act. Not only did the borrowers lose because of the falling exchange rates, the banks switched accounts at will, stripped assets, took exorbitant commissions regardless of the huge losses, and applied a withholding tax which they pocketed.

 

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My life came to a watershed in 1988 when I was forced to either teach what was in the selected history text or end my teaching career. I couldn't lie to my students so I ended my teaching career. Today, through my websites, I teach thousands each (more...)
 

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