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Sydney bureau chief Ross Jones discusses the government regulator myths, ASIC and the AEC.

DROP BEARS. These mythical creatures are capable of terrifying tourists and children alike.

But anyone who lives in Australia and is aged over five knows they are nonsense.

In the same way, anyone who has any familiarity with the banking caper knows ASIC is nonsense. A fictitious creature. A drop bear.

THE ASIC DROP-THE-BALL BEAR

For my sins, in the early 1980s, I spent a few years working for French merchant bank Societe Generale.

If that name sounds familiar, it might be because that is where recent (now ex-) ASIC chief Greg Medcraft spent 27 formative years of his very profitable banking life.

I never actually met Greg, our paths never crossed, but I was aware of his heroics in kicking off the securitisation craze, which ultimately served us all so well. Think GFC.

Those deals included putting together the first securitisation of non-mortgage assets outside the U.S. in the late 1980s and the first securitisation of a credit card portfolio outside the U.S. in the early 1990s.

Former Treasurer Wayne Swan did a lot of good things for the Australian economy, including having the nous to prime the pump when the GFC – brought on (arguably) by the very securitisation process Medcraft had pioneered – threatened to derail the lot of us. Swan and former Prime Minister Rudd saved us from a recession — no doubt about it.

But Swan could also, on occasion, be as far-sighted as a fruit bat. And putting Medcraft in charge of ASIC in 2011 was about as batty as the night sky above Gotham City. I am struggling for a fox/henhouse metaphor here — maybe the bat and the mango tree? You get the point.

Medcraft presided over a bloated, generously-funded ASIC, only too happy to pretend to be the "tough cop on the beat" when, in truth, it was no more than a limp toady, smitten by the big swinging dicks at the banks.

As they say in the classics: Here comes lunch baby.

Medcraft was replaced in late 2017 by former Goldman Sachs banker James Shipton.

We will see how that goes.

THE GUMMY AEC BEAR

Also on the topic of drop bears, I give you the Australian Electoral Commission (AEC). This organisation’s name sounds impressive like it has teeth but it is as much gummy bear as drop bear.

Back in May 2017, the AEC announced it was to conduct an investigation into the very shady funding of James Ashby’s One Nation Jabiru aircraft.

On 26 May 2017, the Sydney Morning Herald reported:

The Australian Electoral Commission has launched a formal investigation into the funding of a $100,000 private aircraft used by Pauline Hanson's One Nation.

Electoral Commissioner Tom Rogers confirmed the AEC had already been conducting an inquiry into the party, and revealed a further investigation was authorised in early May.

The AEC is employing "rarely used" powers to compel people to provide information once they have been issued with notices.

"With the issue of those notices, this matter ceased to be an inquiry­ and became a formal investigation," Mr Rogers said.

IA checks in with the AEC every so often, just to see how they are going with their investigation with its “rarely used” powers.

On 1 May 2018, the AEC advised:

Hi Ross,

Yes it is ongoing — I am advised that the AEC is still actively investigating disclosure matters related to the aircraft. In line with standard practice, the AEC makes no comment regarding matters currently under investigation.

It seems the rarely used powers are not going all that well. How hard can this investigation be?

There are just three parties — Bill McNee, One Nation and James Ashby. Associated entities of interest might include the manufacturer, Jabiru, perhaps the aircraft insurer, possibly three or four witnesses.

Given the AEC has compulsory powers and documents don’t lie, why is this dragging out almost into its second year? It should be a very straightforward investigation.

Are the AEC investigators that inept? Maybe, but unlikely.

It seems way more likely the AEC, for whatever reason, does not want to do this. There is a strong smell that Ashby is being protected because he has the wood on too many people.

IA knows of one crucial witness who informs us: 

  1. the AEC has not yet requested relevant documents; and
  2. despite the witness expressing a willingness to testify, no interview has yet taken place or been scheduled.

What is that up in the gum tree anyway? Is it dangerous?

Nah, it’s just a gummy bear.

Sydney bureau chief Ross Jones is a licensed private enquiry agent. You can follow Ross on Twitter @RPZJones.

Ross is also the author of the Ashbygate book.

Creative Commons Licence
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License

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