Perth Mint’s ex-leaders failed to grasp their obligation to taxpayers as the organisation made forays into “risky” products and overseas markets, according to the state’s auditor general.
Perth Mint’s ex-leaders failed to grasp their obligation to taxpayers as the organisation made forays into “risky” products and overseas markets, according to the state’s auditor general.
Fronting a federal probe into Gold Corporation on Friday, WA auditor-general Caroline Spencer outlined an organisation that by 2019 was, due to its self-funded nature, acting without proper consideration of its owner – the State of Western Australia.
Ms Spencer said Perth Mint had at times become “defensive and deflective” and that “adventurous” forays into offshore and online products such as ETFs and the GoldPass trading app had opened the entity up to more risk.
“They saw themselves as having a commercial focus and that was very clear,” she said.
“Because they were not seeking appropriations through the annual budget process with central agency scrutiny by Treasury… that does diminish the level of interaction with central government and the mindset that reminds them regularly they are subject to the normal accountability requirements.
“The focus on risks and benefits to the taxpayer were not of sufficiently high priority – I think they lost their focus on that core obligation.”
In the years under Sam Walsh’s board leadership as her office turned a laser focus onto the organisation between 2019 and 2022, Ms Spencer said the Mint had improved engagement and was working well to resolve its risk issues.
Ms Spencer said she had not come across evidence of money laundering during her audits of Gold Corporation.
She said the organisation appeared to have maintained a strong focus on Australian gold mining’s reputation.
“They are not the first Australian organisation to venture into new markets… without fully appreciating the risks,” she said.
“As they moved into more complex online offshore products they put themselves in situations where they don’t necessarily know who the customer is because of third party intermediaries.”
“That’s what I was concerned about.”
Financial crimes watchdog Austrac has been investigating the mint over anti-money laundering and counter-terrorism financing compliance.
Scrutiny of the organisation intensified last year when the ABC revealed notorious ex-bikie Dayne Brajkovich walked into the Mint and bought $27,000 of gold using only his driver’s licence.
The sale of gold to China which fell short of Shanghai Gold Exchange’s silver content standards between 2018 and 2021 was also raised, leading to an investigation by London Bullion Market Association.
The federal inquiry was launched this year to probe the cause of Austrac’s investigation, the Mint’s governance, and whether Australia’s gold refining reputation had been damaged.
Mr Walsh told the inquiry the past year had been challenging for Perth Mint staff, but reputation remained strong.
“Through all of this we achieved a historically strong financial result for the people of Western Australia,” he said.
“Since March 2021 we have been implementing a comprehensive and fully funded anti money laundering program.
“There has been a range of issues and quite frankly it does take time to work through those issues to put systems in place to introduce computer systems and technology to support that work.”
Mr Walsh said trade at the Mint had gone up in the wake of media scrutiny, but the global economy was now dragging on sales.
Austrac, Opposition leader Shane Love, and Mines and Petroleum Minister Bill Johnston are due to give evidence today.
More to come.
