The revelations at the Corruption and Crime Commission are deeply disturbing.
The revelations at the Corruption and Crime Commission are deeply disturbing.
They have revealed a fundamental breakdown in some of the basic principles of governance and ethics.
It is extraordinary that a succession of government ministers and bureaucrats have failed to respect their privileged positions and the responsibilities they carry as servants of the public.
It has also revived – once again – the spectre of WA Inc, which never seems to be far below the surface of public life in Western Australia.
The saga has taken on tragic proportions as the number of ministerial casualties has increased to four.
It has ended the ministerial careers of at two least two people considered to have bright futures – environment minister Tony McRae and highly regarded local government minister John Bowler.
More fundamentally, it must be having a damaging impact on the running of the state.
Premier Alan Carpenter had to cut short a trade mission to India, and would have been fully occupied this week dealing with the fallout from the CCC inquiry.
Now he needs to complete yet another ministerial reshuffle.
While Mr Carpenter may bring some new faces into the ministry, he should think long and hard about sticking with his existing ministerial team to deliver a more effective outcome.
Former premier Brian Burke and former minister Julian Grill, at the centre of the inquiry, have revealed their willingness to do whatever was needed to achieve an outcome for their clients.
The inquiry has also shone a spotlight on their clients, which include the likes of property developer Australand, Macquarie Bank, Fortescue Metals Group and Precious Metals Australia.
They may have been unwitting participants in some of the questionable tactics employed by Messrs Burke and Grill.
Nonetheless, their experience will prompt the business community to think carefully about who they engage and the tactics they employ in pursuit of their commercial goals.
Achieving short-term success is one matter: protecting a corporate reputation may be more valuable in the long term.
Mr Carpenter has already acknowledged that he made a big mistake when he lifted a ministerial ban on Messrs Burke and Grill and accepted Norm Marlborough into the ministry.
He has also foreshadowed new rules governing contact with lobbyists, though revelations this week suggest some former ministers would have bypassed the rules.
What is needed most of all is for ministers – and their staff and bureaucratic advisers – to maintain impeccable standards in all their dealings.
Private equity trend hits WA mining
Press reports this week foreshadowed the imminent launch of the largest private equity deal of all time: a planned $US44 billion ($56 billion) buyout of US power company TXU Corp.
The US reports also disclosed that, of the 10 biggest deals of all time, nine were completed in 2006.
That highlights the rapid uptake of highly leveraged (i.e. high debt) corporate takeovers.
Traditional wisdom holds that high debt transactions are also high risk, hence the concern about the long-term future of national airline Qantas if it is acquired by a private equity consortium.
Many people, including former Alinta chairman John Poynton, argue that the world has changed; long-term interest rates are at historically low levels and will stay low, hence it makes sense to increase corporate gearing.
That logic underpins his involvement in a proposed management buy out of Alinta.
The private equity boom hit WA last week when former BHP Billiton chief executive Brian Gilbertson emerged as the key player in the effective acquisition of Consolidated Minerals.
The ConsMin transaction was notable in several ways.
The return to Australian public company life of Mr Gilbertson caught many people by surprise.
The deal also highlighted Australia’s integration into the global economy.
The funding for this deal has come from Mr Gilbertson, who operates on a global stage, his current employer, Russian oligarch Viktor Vekselberg, and AMCI, one of the world’s biggest privately owned coal and energy companies.
Mr Vekselberg’s company Sual is in the process of merging with another Russian company, Rusal, to create the world’s biggest aluminium producer, probably with Mr Gilbertson as chairman.
They have targeted ConsMin as the vehicle for building a substantial mid-cap mining house, perhaps something akin to Swiss company Xstrata.
The proposed transaction will give the new investors a 60 per cent stake in ConsMin, which will emerge with a conservative debt level.
It is to be hoped the company will be able to achieve its growth aspirations, but without having to take on imprudent levels of debt.