Rodney Adler got what he deserved, but did Treasurer Costello and his
appointed regulators get theirs? The sentencing judge said the
following right upfront:

It is important to note at the beginning
of these remarks that he has not been charged or convicted of being a
director of a large public company which went broke resulting in large
losses to shareholders and creditors, including a large number of
insurance claimants, whose claims could not be met and others such as
building owners who could not get their work done or completed because
insurance for buildings ceased to be available. As he has not been
charged or convicted of any of those things, he cannot be sentenced or
punished for them in these proceedings. It has not been suggested, and
cannot be, that the conduct alleged in these four counts and to which
the offender has pleaded guilty caused or significantly contributed to
the collapse of HIH in 2001 with debts of $5.3 billion.

That apparently didn’t suit Treasurer
Costello, nor the ABC and ASIC head Jeff Lucy. After all, the HIH Royal
Commission into the HIH collapse cost a reputed $100 million, and
Adler, if they can be believed, caused the collapse. Let’s make sure
we’re all getting our money’s worth here.

Today’s SMH carried the following:

The federal treasurer, Peter Costello, said
the jail sentence would send a strong message to corporate Australia.
“Criminal conduct in the corporate sphere will be investigated, it will
be prosecuted and the courts have shown that they are prepared to
impose heavy jail terms.”

The Government had invested millions
bringing those responsible for the HIH collapse to justice, he said.
HIH collapsed in March 2001 with debts of $5.3 billion, triggering a
torrent of litigation.

Much the same was reported by
the ABC on its 7pm news broadcast which also featured ASIC head Jeff
Lucy imputing the same sentiments.

So where does that leave the ABC, SMH , Costello and Lucy? Were they misleading the public? As the actor Harvey Kietel playing the FBI agent in the film National Treasure
says to Nicholas Cage, somebody has to go to jail. That’s Adler, fallen
national treasure, but it has absolutely nothing to do with the
collapse of HIH. The media is doing nothing but falling for the party
line. No wonder they were such suckers for Adler’s pitches.

why is a higher standard being demanded of Adler than the treasurer and
the head of ASIC (and APRA), who, it should not be forgotten, were
sound asleep at the wheel for years while trouble brewed at HIH? On the
Adler servitude scale, how many years in the iron motel would they rate
for overlooking the damage being done out there in corporate land and
misleading the public? Is it really now safe to go back into the
investment waters now that Adler is behind bars?

For instance,
what about the Pasmincos and Homesides of the world? Nothing misleading
there? All transparent? No investigation? Why not? Does it really just
come down to who is in the frame?

Catching and jailing a
colourful miscreant corporate tadpole in the scheme of things like
Adler does nothing to address the underlying rotten corporate morality
that festers behind the sharp suits, slick lawyers and well padded pay
packets of the sanctimonious big end of town. It appears they are quite
beyond the reach of the law. And the government and the regulators it
appoints give every impression of applying the law selectively. A far
cry from Eliot Spitzer indeed.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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