Finance Analysis

The Commonwealth Bank's illusion of ethics

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The CBA has been trying to bury its dark past and present a cleaner image (Screenshot via YouTube - edited)

Despite claims of being an ethical bank, the CBA has a trail of malpractice victims that paints a different picture, writes Dr Evan Jones.

ON WEDNESDAY 10 August 2022, the Commonwealth Bank of Australia (CBA) held a cocktail party at the Museum of Contemporary Art at Sydney’s Circular Quay. The occasion was the resignation of the CBA’s Chair, Catherine Livingstone.

Livingstone claims to have cleaned up the CBA’s procedures and ethics such that the bank is now squeaky clean.

The Australian Financial Review’s James Eyers wrote up the affair on 12 August (Livingstone exits CBA declaring victory). Eyers reproduced telling criticisms from the Australian Prudential Regulation Authority (APRA)’s April 2018 Prudential Inquiry into the Commonwealth Bank of Australia Report.

Thus we read of CBA’s ‘continued financial success dulled the senses of the institution’, a ‘widespread sense of complacency’, the bank had ‘turned a tin ear to external voices and community expectations about fair treatment’ and a ‘slow, legalistic and reactive, at times dismissive, culture’.

APRA’s report was instigated after the Australian Transaction Reports and Analysis Centre (AUSTRAC)’s exposure of CBA’s widespread indifference to money laundering. For this sin, the CBA was handed a whopping $700 million fine.

Livingstone claims to have comprehensively cleaned up this racket. Frankly, I doubt it.

During the Hayne Royal Commission, interminable time was wasted in questioning Livingstone (21 November 2018 – I was present) on the marginal matter of executive remuneration, but this episode nevertheless exposed Livingstone as an indifferent chairman and unrepentant for her failures.   

If Livingstone is in full self-congratulatory mode, so also is CBA CEO Matt Comyn.

During a presentation to a conference on improving corporate governance on 28 July, Comyn claimed (Nine reporting):

We were very weak at managing non-financial risk. We didn’t have the capability. There was some naivety, ignorance. We had become arrogant, particularly dealing with some stakeholders, and that was very clear. And that’s that sort of deterioration, it happens over a period of time.


And so we stopped really looking for outside voices, we rationalised a lot of things... there were a lot of things that we needed to change.

These are carefully chosen words but hollow. And what is “non-financial risk”, other than technobabble?

That Comyn’s supposed recent mea culpa is calculated hot air can be gauged by his comparable pronouncements on 28 May 2019.

Reading from Comyn’s prepared speech, a Nine journalist noted:  

Mr Comyn will argue its purpose must refer to the founding principles of the bank. These included that CBA acts as a bank for all Australians, that it supports the wider economy, and that it be a financial institution of which the nation could be proud.


[Citing Comyn:] “This has always been our purpose — improving the well-being of our customers and communities we serve... This starts with embracing a new mindset where we are listening and hearing more, owning mistakes and fixing them faster, putting customers first, and harnessing the full potential of our people and our technology to make a meaningful difference in our customers’ lives.”

Earlier, at the 7 November 2015 CBA AGM, then CBA Chairman David Turner claimed:

“We think we will be the ethical bank, the bank others look up to for honesty, transparency, decency, good management, openness. That is exactly where we are trying to go.”

These statements are not merely so much palaver as outrageous.

The Commonwealth Bank of Australia was created in 1911 by the Fisher Labor Government to serve “the commonweal”. Restricted in its activities during the 1920s, the Chifley Government in 1945 reinforced its “public interest” intent.

Financial deregulation from the late 1970s onwards saw the CBA marginalise its 1911/1945 charters. Profit replaced the public interest. This orientation was entrenched under CEO David Murray during and after the privatisation of the bank during 1991-96. Unconscionability, indeed criminality, became an integral component of the CBA’s modus operandi. The CBA’s trajectory is outlined in my 2012 ‘The dark side of the Commonwealth Bank’ (in four parts).

Labor Treasurer Paul Keating’s privatisation of the CBA was and has been a disaster. Unfortunately, the impending failure of the once iconic State Savings Bank of Victoria had Federal and Victorian Labor stitching up its purchase by the CBA, the purchase to be funded by the first partial privatisation of the CBA in 1991. The opposition to privatisation of Labor’s left-wing forces (they existed in those days!) was swamped by this pragmatic fix.

On 31 August 1990, Fairfax journalist Milton Cockburn, in an article lauding Labor’s privatisation agenda (‘That light is the cold light of reality’, Sydney Morning Herald), claimed:

‘Can it really be said that retaining the Commonwealth Bank in Government hands contributes to the betterment of mankind?’

A preposterous posture. The answer is most assuredly yes. (Cockburn went on to front for the Property Council, whose sense of the public interest in its contempt for the built environment we all know and love.)

The problem is that all the victims of the CBA’s criminality over 40 years have been assumed away. They don’t and never existed. This is how the CBA creates its “ethical” illusion.

There is the case of South Australian farmer Stephen Heinrich. The CBA inveigled Heinrich to switch his business from the ANZ in 1985, lied to him regarding terms, fabricated the loan figures and then changed adversely the terms of the contract unilaterally, foreclosing on him in 1993.

There is the case of Tony and Dorothy Rigg, their Nowra building frame business destroyed from 1985 onwards (summarised in their submission #15 to the 2015-16 Impairment of Loans Inquiry).

There is the case of many hundreds of CBA foreign currency loan (FCL) borrowers from 1982 onwards, its aftermath stretching for over a decade. The court victory of the Quade farming family in February 1991 was a landmark in exposing CBE perfidy, but that victory didn’t help other CBA FCL borrowers.

An instance of the brutal treatment (ably assisted by the bank’s barrister – now a judge himself – and the judiciary) of one CBA FCL borrower, Geoff Dwyer (and his mother), is outlined in my 2005 article on the case, reproduced here.

The Labor Government worked actively to support the CBA during this time, with a view to flogging it off at the best price. This support included mounting a whitewash parliamentary inquiry in 1991 and brutalising the Australian Democrat Senator Paul McLean who was bringing to Parliament’s attention the then criminality of the banking sector, not least that of the CBA.

David Murray becomes CEO of the CBA in June 1992 and attacks the specialty subsidiary farmer/small business Commonwealth Development Bank (CDB). He marginalises existing management and moves CDB loans onto conventional terms. Thus do CDB borrowers become another round of ethics-less profit-driven roadkill. Murray’s Wikipedia site has as foreground his overseeing the massive growth in the CBA’s market value and shareholder returns. There is nothing there about the profit-driven casualties.

There is the case of the eminent orthopaedic surgeon Dr Robert Cooke. In early 1994, Cooke was given a loan of several million dollars (later enhanced by a bill facility) to re-finance his properties and to develop three emergency medical centres which he had negotiated with private hospitals. The Brisbane loan manager organised this loan outside his Delegated Lending Authority and fabricated loan figures to do so. Sydney Head Office was not amused.

Cooke insisted that his family residence, held in trust, was not to be taken as security. The bank subsequently fabricated documents that claimed security and later stole his home during foreclosure (with customary judicial complicity). The Cooke loans were quintessentially predatory. Head Office installed a head kicker who bludgeoned the hospitals, brutalised Cooke and sold off the emergency centres below value. The bulk of the residual revenue from property sales was also stolen.

In terms of defrauded borrowers en bloc, the foreign currency loan scam was the first. The CBA takedown of close to a thousand commercial (and some farmers) borrowers acquired from the 2008 Bankwest takeover was the second. This story is outlined in my four-part ‘The Commonwealth takedown of Bankwest customers’ on this site.

Then there’s Tasmanian Suzi Burge, small businessperson taken down by predatory loans in 2008 and 2010. Her story (at length) is outlined here.

CBA executives are well aware of these victims’ plight and of their claims.

Thus, for example, Anne Knight, Senior Legal Counsel CBA, writes to Tony Rigg, 19 September 2014:

[Your] matters have previously been the subject of a number of legal proceedings many years ago which were all determined in CBA’s favour. CBA will not enter into any further discussion with you about those issues.’

Knight would possibly have been in nappies when the Riggs were criminally foreclosed. She would know nothing about the case but it was her well-paid job to tell Rigg to bugger off.

The CBA was batting away the persistence of foreclosed FCL borrowers for some time. In 2014-15, the Foreign Currency Borrowers Association (FCBA) sent requests and material to the CBA via Senator John Williams (himself and family a CBA FCL victim).

FCBA members thought that they had sufficient ammunition to demand a settlement for its CBA borrower members, but their presumed firepower was illusory. David Cohen, Group Executive Group Corporate Affairs, was the CBAs long-time front man. In a letter of 14 September 2015, Cohen impressed on the FCBA, with his customary iron hand behind a velvet glove, that the bank called the shots.

In a supercilious diversion introducing a letter to Williams on 5 June 2015, Cohen wept crocodile tears:

‘I understand the concerns expressed by the Foreign Currency Brokers Group and the distress experienced by a number of our customers during the 1980s in relation to Foreign Currency Loans.’

There was to be no understanding of FCL borrowers’ concerns or distress experienced.

Then there’s the Bankwest commercial borrower victims. It is pertinent to review to one such victim, Western Australian Sean Butler, as his foreclosure was so transparently fraudulent (Butler appeared as a witness to the whitewash Post-GFC Banking Inquiry on 8 August 2012).

Following endless correspondence from Butler with Bankwest, Bankwest’s then CEO, Rob de Luca, (subordinate to CBA dictates) replied to Butler, for example, on 11 March 2016.

De Luca claimed:

‘Bankwest and CBA are of the view that they have dealt with you in good faith, answered your queries and made a very reasonable offer to resolve the matter.’

In good faith? CBA executives, following financial deregulation, have long been schooled to the contrary. The letter is full of lies. There were no “reasonable offers to resolve the matter”. CBA/Bankwest had simply stolen his properties. Go away.

This is part one of a two-part article. You can read part two HERE.

Dr Evan Jones is a retired political economist. 

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