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Greed is good! ATO mates rates for mining billionaire tax evasion scheme

by Michael Pascoe | Oct 22, 2024 | Finance & Tax, Latest Posts

After winning the Gold Walkley for the PwC tax leak scandal, the AFR’s Neil Chenoweth has produced another scorching tax story – one calling into question double standards in the treatment of tax fraud along with exposing the greed and venality of the extremely rich. Michael Pascoe reports.

With timing you couldn’t make up, Mineral Resources (ASX:MIN) has released its 2024 Corporate Governance Statement along with its annual report. If ever such a statement looked like a box-ticking exercise, this was it.

MinRes, as the company is best known, declared, “We’re honest, authentic and no-nonsense” and that the company was “committed to a high level of corporate governance that encourages a culture valuing safe, ethical behaviour, integrity and respect.”

Too bad the CEO established a decade-long tax evasion scheme to enrich himself and four other founding executives, in the process costing the mining company’s shareholders $7m, according to Neil Chenoweth’s report ($).

Billionaire CEO Chris Ellison

The AFR’s Rich List reckons the CEO, Chris Ellison, is worth a couple of billion dollars, keep the change.

He could also appear on any Euphemisms of the Year list by describing the tax evasion as a “serious lapse of judgement”. The version of the story Ellison told Reuters also is a little, er, euphemistic:

“Ellison said that prior to listing Mineral Resources in 2006, he and his business partners operated entities overseas that imported mining equipment into Australia. Some of that revenue was not disclosed to the tax office, he said.”

Well, you could put it that way, particularly if you wanted to skim over all the tacky details in the AFR, the stuff about inflated prices for second-hand equipment bought through a British Virgin Islands company, “children accounts” set up in Hong Kong, the use of credit cards to spend the rich profits that were kept hidden from the ATO, the full nature of the conspiracy to dud the Australian Commonwealth and that the evaders only stuck up their hands to cut a deal with the ATO when they feared they were about to be sprung.

In bad taste? Albanese wining and dining with Zionists and billionaires

ATO mates rates

There are serious questions to be asked about that deal – the ATO’s apparent mates rates for some blatant tax evaders – and about exactly what the MinRes board knew and when about their CEO’s character as displayed by evading his responsibility to pay his fair share of tax the way many millions of other Australians do.

The board’s immediate reaction when the scandal hit the fan in the AFR Weekend was to state that directors had “full confidence in Mr Ellison and his leadership of the MinRes executive team”. The chairman denied that Ellison’s actions were improper. However, by Monday, the board had engaged an external law firm to investigate the matter.

Making life more interesting for the board is Chenoweth’s further report that “in June 2022, the current MinRes board was alerted to Mr Ellison’s and Mr Wade’s involvement in the transfer pricing scheme through an anonymous whistleblower complaint that was forwarded to the new chairman, Mr McClements and to non-executive directors.”

Given the 14% dive in the MinRes share price on Monday, it’s a fair bet some ambulance-chasing class-action lawyers will be wondering if the board had kept the market fully informed.

As for the ATO – oh dear. As Neil Chenoweth’s original story put it:

“Fearing the scheme was about to catch up with him, he (Ellison) asked his lawyers to cut a deal with the ATO. He offered to share his secrets with the ATO, pay back any tax owing plus a multimillion dollar fine to avoid serious penalties.

“The deal he proposed to the ATO contained an important condition: the tax office would never reveal its existence or its investigation to anyone including the Australian Federal Police or the Australian Securities and Investments Commission.”

In a statement on Monday, Ellison said: “All outstanding tax, penalties and interest that should otherwise have been paid by me has been fully repaid, and the matter has been settled with the ATO.”

How neat.

Remembering Project Wickenby

Just by way of comparison, in 2007, Glenn Wheatley pleaded guilty to evading a much lower amount of tax, $318,092, as part of Project Wickenby.

“I’m ashamed of what I have done,” Wheatley told the court. “It was something that I have regretted for a long, long time and I’m ashamed of what I’ve brought on my family, who have had to suffer a lot.”

Wheatley was sentenced to 30 months jail with a minimum of 15 to serve. He spent ten months in jail and the remainder of his sentence in home detention.

Commonwealth prosecutor Richard Maidment SC said: “The fraud that was instigated (by Wheatley) can be described as sustained and sophisticated. Tax fraud is not to be seen as a victimless crime.”

But apparently, it can also merely be a “serious lapse of judgement” all tidied up by a billionaire paying a few million dollars in penalties, nowhere near enough to threaten his Rich List membership.

No victimless crime

What is tax evasion? In my opinion, it is theft from your fellow Australians, stealing money that rightfully belongs to the Commonwealth for the benefit of our commonwealth. It is all the more egregious when carried out by the rich – people who clearly don’t need their ill-gotten gains,

people who can afford all the very expensive tax lawyers and accountants and bankers and offshore paraphernalia that make it possible to dud the mere plebs.

P.S. There is nothing new in this story – it is effectively a report of the AFR reports. But a relatively small number of people are AFR subscribers and this is a story everyone should know about.

It also has long been a whinge of mine that, too often, media outlets are loathe to give credit for a story “not invented here”. The AFR broke the story on Saturday morning. As far as my Googling and scanning could tell, no other news organisation touched it over the weekend, many hadn’t on Monday morning and some still haven’t as I write.

That is a disservice to readers. Very few people subscribe to multiple news services, there’s not much crossover of readers or viewers. This is a story of genuine public interest on a number of levels – the public should be told.

The Big Four accountants and the $480 billion global tax evasion industry

Michael Pascoe

Michael Pascoe is an independent journalist and commentator with five decades of experience here and abroad in print, broadcast and online journalism. His book, The Summertime of Our Dreams, is published by Ultimo Press.

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