$4bn at stake so bring on the inquiry

As a dutiful law abiding watchdog we notified the wannabe bloodhound ASIC and we dropped a few notes on the Crikey Line. We also noticed “other people’s money” being gathered by “Mr Millions” Kim Clifton, with Carol and Dean as skipperettes, in a boat called the Salt Shaker II: purchased for $650,000 in mid 1999, – nothing escapes our members. Investment invitations were sent out for mortgage proposals, with the Saltshaker as “security.” Nothing was apparently moored down. Our message to ASIC at the time: early action against scams which cross state boundaries is essential – not optional.

Ben’s excellent page 1 story highlights the effect of racketeering – the typical link between tax effective scams, financial wizards and mortgage broker-related, dodgy deals, comfortably running from NSW to Western Australia and the inability of ASIC to close them down. The deals take on a second and third level; starting with the brokers, fed through a tunnel of financial planners, into the waiting arms of the ATO. The promoters of Preston Vale milked the town of Narrogin (WA) with unconscionable suggestions of borrowing $100,000 – $200,000 from local “friendly” banking agents, anxious to arrange further loans and misery, to supposedly take advantage of expected “profits”. $28 million was raised and only $9 million found its way into the project.

RECA and Doug Solomon exposed the connection between Preston Vale, Cliftons, Knightsbridge, Braysich and friends from the Bondie days, mid last year . Mr Braysich’s business interests in WA attracted our attention, when our vulnerable retiree members received promises of a $40 million rescue package, to supposedly bail out Clifton Partners, (renamed Knightsbridge: with ASIC’s blessing).

Mr Braysich starred in yet another impossible deal, doomed to failure from the beginning. A round robin of cheques mentioned in the WA Parliament, thanks to our diligence, exposed the complete intentions of corporate raiders, traders and undesirables. All of the above were described in the Chamber of Power, as a “mob of gangsters” and members of the “dirty dozen.” ASIC snoozed through the entire matinee. Let us hope they read the Fin Review and discover all the other suspect dealings which have driven investors to ruin and despair.

Ben’s story was exceptionally well written and the first investigative expose we have read to date which captures the national magnitude of the largest fraud this country has ever seen. Over 200 solicitors/brokers/planners/auditors across Australia were earning a living from deceptive market practices, understanding fully that new money was desperately needed to prop up old debt – and the watchdog has known since 1991. Bureaucratic madness! Just who is at the helm of our national financial security? Well done Ben – investigative journalism is alive and well!!!


We love Denise Brailey here at Crikey and this is an article she wrote that was pubished in the WA edition of The Australian on May 28. She is a rare gem in Australia and is making genuine reform happen.

Tricky language can’t obscure Labor promises to victims

“I know that you believe you understand what you think I said, but I’m not sure you realize that what you heard is not what I meant.” These infamous words of Richard Nixon could have been very aptly spoken by State Attorney-General, Jim McGinty, at a meeting of angry victims of the Finance Broking scandal last Friday. Mr McGinty was trying to explain why the clear language of a pre-election ALP document, and the equally clear record of his words at a meeting of victims at Eaton, meant something different. The undeniable fact is that the ALP promised victims in a written policy document that, if they won office, legal assistance would be provided to determine whether or not the State is liable to provide compensation. Those promises were repeated by Mr McGinty at five meetings he attended with victims. I attended two of these meetings and heard what he said. Mr McGinty acknowledged to the meeting last Friday that the finance broking scandal was the single most important factor in delivering a change in government at last February’s State election.

Whether or not Labor thought they were going to win when promises were made, they must now be honoured. Otherwise, they can expect to be rightly considered far worse than mean and tricky: it is one thing to genuinely make a pre-election commitment and later find that, for unforeseen reasons, it cannot be met; it is another thing altogether to make a clear commitment and refuse to keep it for the reason that the promise was clumsily written and spoken and did not properly convey the intended meaning. The later approach is not merely putting a spin or favourable interpretation on an event. It is indicative of a view that the making of clear pre-election commitments can be justifiably denied by untenably suggesting that clear language had another meaning. If Mr McGinty thinks that political accountability has become so flimsy, he is sadly mistaken.

The finance broking scandal was such a powerful political issue because many of the victims have significant influence on two generations of voting descendants. I think much of the goodwill that Labor generated concerning this issue in Opposition has been lost. All of it will be lost if the ALP does not immediately honour its election promises – and, if the promises are not honoured, Labor will have no prospect of achieving the same kind of support in Western Australia at the forthcoming Federal poll as at the February State poll. Jim McGinty has probably never had Richard Nixon high on his list of political mentors. However, if his approach to the ALP pre-election commitments on finance broking is a guide, he has developed a remarkably similar style.