06/03/2007 - 22:00

Some curly ones at the CCC

06/03/2007 - 22:00

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It appears no-one has outwardly canvassed the possibilities raised by a simple, three-word question – was anyone trading?

People familiar with the stock market will know instantly where Briefcase is heading.

In Briefcase's opinion, it’s worth considering whether any of those appearing at WA’s Crime and Corruption Commission inquiry into the activities of lobbyists was tempted to cross a threshold with regard to information and the market.

So far, only a few hints of something of that nature has floated to the surface, without the CCC going too far with that line of inquiry; and why would it?

The CCC, as far as Briefcase understands the situation, is only looking at influence peddling, and possible corruption inside government.

But, when some of the matters examined intimately affected companies listed on the stock exchange, a red light started blinking furiously in front of Briefcase, just as it surely did in the offices of the Australian Securities and Investments Commission, and the Australian Tax Office.

Consider, for example, the way in which matters relating to Precious Metals Australia were handled. This small company was on its knees for much of the past decade, destroyed by a failed vanadium project, and trashed by a decision of its one-time partner, Xstrata, to start demolishing the processing plant.

As events unfolded, PMA staged a Lazarus-with-triple-by-pass return from the dead, aided to a major extent by a WA parliamentary inquiry that dished the dirt on Xstrata.

Over the past two years, thanks to the combination of government and private action, PMA’s share price rose from one cent to a peak of $2.86, and recent trades around $1.85, so anyone buying in the early days of the revival has made a killing.

How embarrassing for all concerned, including Briefcase, which sided with PMA in its battle with Xstrata, not knowing that the company and its lobbyists were working hand-in-glove with some in the government involved in a parliamentary inquiry.

At some point in this process, which Xstrata will now try to overturn, knowledge of the inquiry recommendation, and the potential impact this might have on a settlement with Xstrata will have become known to a variety of people.

The opportunity to buy, or sell, PMA shares, at the same time as they were passing around drafts of the inquiry recommendation, could have tempted some.

Commissioner Hammond, and counsel assisting the CCC, do not appear to have chased the lobby ferrets down the share trading burrow.

But it’s a fair bet that the chaps at ASIC are pouring over share trading records – and if they’re not, they damned well ought to be.

What the CCC exposed is one of the most spectacular cases of government corruption in Australian history.

Involvement in the decision-making process across virtually all levels of government is a stunning achievement of the lobbyists exposed by the CCC. Providing Norm Marlborough with a secret-squirrel mobile phone was an inspired piece of information gathering, while drafting questions and making changes to parliamentary reports was simply breathtaking in its audacity.

The challenge now is to plug the holes opened in government and pray that the corruption exposed at the top does not reach too deeply into the functions of government.

But, while that is being done, there are lines of inquiry other regulatory agencies must follow. The share-trading angle is one of them. Fully declaring income from lobbying activities is another.

Briefcase might be allowing its imagination to run riot here but, with a federal election less than a year away, and with the new opposition leader, Kevin Rudd, already suffering a little collateral damage from his association with Brian Burke, it is easy to imagine a full-blown ASIC investigation picking up where the CCC left off.

•••

History has a strange way of repeating itself, as readers old enough to remember the 1980s will be thinking as they try to grasp the enormity of what has happened to government in WA.

Back in 1987, it was people such as Alan Bond, and the late financiers, Laurie Connell and Robert Holmes a Court, who caused government so much pain with their antics during the years of WA Inc.

Back then, however, it was all about trying to rescue failed companies that had bet heavily on a never-ending boom and lost.

Mr Bond couldn’t control his acquisitive instincts, while Mr Holmes a Court bet badly on a proposed takeover bid for the US oil company, Texaco, and an even more troubled attempt to take over BHP.

It was those deals which led to the utter nonsense of Messrs Bond and Connell with their petrochemical plant, and Mr Holmes a Court cashing out at the expense of the State Government Insurance Commission.

Mr Burke, for a while, was on the government-receiving end of those rotten deals.

This time, Mr Burke appears to be applying knowledge gained to plunder government in the same way Messrs Bond, Connell and Holmes a Court did 20 years ago.

If points were being awarded to lessons well learned, Mr Burke would get an A. Unfortunately, he also gets an F for ethics for the way in which he played his power-broking games at the highest levels of government.

•••

Where to now for WA?

Well, if it wasn’t for the strength in the ‘real economy’, where big companies the state government sees as its enemies continue to dig and deliver jobs and growth, we would be up a certain creek without a paddle.

The aftermath of the 1987 fiasco in government was a prolonged economic drought in WA, which really only lifted with the start of the resources boom about four years ago.

Bad times are unlikely to bite again thanks to demand for raw materials from fast-growing Asian countries, especially China.

But, where there will be a big change is in a widening of the split between business and government – at all levels.

State government, through its corruption and ineptitude, is condemned to years of internal bickering, and increasing irrelevancy. You can see this in the quality of people being attracted to work for any state government agency, the low wages paid compared with the private sector, and work-to-rule mentality which pervades government.

Out in the private sector it’s full steam ahead – and avoid wherever possible any contact with government, unless prodding it with a very long pole.

•••

 “Let the people know the truth, and the country is safe.” Abraham Lincoln

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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