One guy prosecuted for allegedly running a company while bankrupt, ten Crown directors off scot free for washing $70bn through casinos for Chinese Triads, drug and sex traffickers and other assorted criminals. One rule for rich and powerful, another for the rest. Michael West reports on the world of deluxe double standards.
Editor’s Note: since this story was published, Crown has been granted another casino licence.
How would you go being a director of the biggest money laundering operation in Australia’s history, heading up a mob which helped Chinese crime gangs launder $70bn, found to be in breach of money-laundering and terrorism financing laws on literally hundreds of occasions?
Cruising, that’s how you’d be, cruising like the directors of Crown Casino. Nary an action by corporate regulators, not even a wee director’s ban. Fees intact.
How would you go though being a bankrupt advocate for bank victims? How would you go being an ordinary Australian, small fry? They’d throw the book at you; they might even try to drag you out of a hospital bed after spinal surgery, against doctors’ orders, to face court in another state. Naturally, you would be up for your own legal fees too.
If there is a moment which illustrates so plainly the mollycoddling of the big end of town versus the treatment of ordinary Australians, this is it:
On the one hand, we see ASIC v Geoff Shannon of Unhappy Banking; on the other hand we see Nobody v Directors of Crown Resorts. Here we are at peak regulatory capture, at the zenith of crony capitalism where double standards are the order of the day.
While the corporate regulators have been cowering from any action against directors of casino juggernaut Crown Resorts, they have been avidly pursuing bank victims advocate Geoff Shannon on flimsy charges of running a company while bankrupt.
ASIC says it has been on a fishing mission with Crown, but decided to take no action, despite multiple royal commissions and inquiries which have showcased an enterprise whose lucrative business model has been facilitating organised crime. Directors are responsible legally for what happens in the company under them. Full stop, case closed.
What do you have to do, murder someone?
Money-laundering authorities from Austrac had sallied forth with a lawsuit late last month claiming Crown breached money-laundering and terrorism-financing laws more than 500 times.
Meanwhile, chair of the corporate watchdog, Joe Longo, popped his head out to explain to corporate media last week that ASIC would not be pursuing Crown directors for breaching their duties. It was all a bit old according to Joe. Yet ASIC is still pursuing the bank victims advocate, Geoff Shannon of the website Unhappy Banking, even trying to drag him off his hospital bed after spinal surgery to force him to face charges in another state.
The supposed Shannon breaches are just as old but of course Shannon has the distinct disadvantage of coming from the Small End of Town, not being a political donor, and acting against the interests of political donors, the banks.
To the extraordinary prosecution, make that persecution of Shannon in a tick. This latest extravaganza of double standards reminds of the time during the financial crisis when there was actually an action, this action:
Malvern man Andrew Scott pleaded innocent but was found to have broken the law after presiding over the loss of $5 billion in Centro Properties’ share value, or other people’s money. Scott has been fined $30,000 – in a court case that cost taxpayers and shareholders more than $3 million.
Warrnambool man Tyrone Lynch pleaded guilty to causing $5,900 damage after he ran out of grog at his mum’s house, broke into the local Terang Mortlake Football Netball Club and took 30 cans of grog then went back to his mum’s and kept drinking. Lynch was sentenced earlier this year to 18 months in jail.
So, while Crown directors are roaming about scot free, their legal costs picked up by shareholders, their millions in directors’ fees banked, bank victim advocate Geoff Shannon’s family has been personally funding his defence against charges which are frankly pathetic.
For some reason, ASIC was so keen to teach Shannon a lesson last month, so zealous and dedicated in their enforcement, that they tried to force him out of hospital while recuperating from spinal surgery. Even demanding he travel from Port Macquarie to face charges in a court in Southport, Queensland.
The regulators and their lawyers were told quite clearly by two of Shannon’s doctors that he had just had emergency neuro-surgery, and was in no condition to go to court, let alone walk. The doctors’ certificates are emphatic, we have them.
The Dystopian shores
Can you imagine ASIC telling Crown directors James Packer, John Alexander, Geoff Dixon, Helen Coonan, Harold Mitchell or Andrew Demetriou, “Sorry, we don’t believe you are in hospital having spinal surgery. You have to turn up and face the judge on Monday in Queensland”?
Despite a letter from doctors, including neurovascular surgeon and head of Neurosurgery at Macquarie University Hospital Professor Marcus Stoodley, they did just that, effectively, “Sorry, we don’t believe you Stoodley, or your GP either, so your patient Shannon will just have to front up at 9am at Southport Court”.
For a spot of illumination of Australia’s regulatory hypocrisy, wrap your minds around this: ASIC is charging one guy for managing a company who was not managing a company while shying away from charging people who are actually legally responsible for the running of a company. A non-director versus actual directors.
Surely we have arrived on the Fatal Shore of Dystopia. On the one hand, those responsible for an enterprise which facilitated organised criminals. On the other, a guy not responsible for running anything, a guy who was helping bank victims.
Just to let it sink in – goodness knows the perspective is mind-numbing – a whole crew, the Crown Gang, whose “regulated” monopoly picks up millions in JobKeeper subsidies, the same gang which acted for years in the interests of crime bosses – whether intentionally or not – is off the hook, while the battler who acted for farmers and other bank victims gets prosecuted.
Even Geoff Shannon’s Trustee-in-Bankruptcy, the veteran Max Prentice, said it was okay for Shannon to manage an advocacy service. He even had an okay letter from APRA to do just that.
Seems it has been Shannon’s bad luck that certain people feed the press and the regulators against him, that he has an enemy at the National Australia Bank, and also that he was kept in bankruptcy for so long following a fight with the CBA.
While the Crown Gang were making mega-rich criminals even richer, Shannon was acting for people like this blind pea farmer from Victoria.
The very day after Geoff Shannon helped this blind pea farmer when his plight was published – a client of NAB who was being charged 28% interest on his mortgage – the bank sent executives out to rural Victoria to settle with the farmer.
We are not imputing here in the least that Crown management and directors are all roaring crooks and Shannon is Mother Teresa, what we are clearly pointing out is a glaring double standard.
We see it all the time, whether it’s in tax, where the big fish get to negotiate a civil outcome and the small fish get fried with fines. Or in massive bank fraud and market-rigging cases where the offending bank gets to sign an Enforceable Undertaking (EU) which is a “Yes, we will pay a small (by bank size) fine if you put out a press release confirming we have done nothing wrong”.
Even more comical is that the banks get to choose the charity of their choice when it comes to paying their fine under the EU. It’s probably tax deductible.
Geoff Shannon has been charged with running a company while bankrupt. He was not a director of the company in question, Business and Personal Solutions Pty Ltd (BAPS). He was running, with permissions, a website, Unhappy Banking.
Was he associated with laundering money for sex slavery operations? Or drug traffickers? Triads? How about accepting money in shoeboxes? Did he bully regulators, dodge tax on a grand scale, consistently break responsible gaming rules?
None of that.
Michael West established michaelwest.com.au to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences.