Does Peter Costello have a record of
appointing people with controversial tax histories? That certainly
seems to be the case with Rob Gerard, but what about the man he
hand-picked to be chairman of ASIC, David Knott?

Crikey had a
brush with the Federal Privacy Commissioner over Knott’s controversial
former business partner and convicted tax dodger Ian Collie, but this SMH story summarises the key points. Then Shadow Treasurer Mark Latham even fired out this statement in September 2003 and an even feistier effort the next day.

The Treasurer also made a solid defence of Knott to ABC’s PM program.

Costello and Latham clashed in Question Time twice (1st and 2nd) over Collie’s tax history and BRW’s Adele Ferguson won the 2003 Melbourne Press Club Quill award in the business category for her story on Collie’s past.

Even
more embarrassing for Costello was the trouble that his chairman of
APRA, Jeffrey Carmichael, found himself in 2003 after his credibility
was already shot to pieces by the HIH Insurance collapse. This is from
a story in The Courier-Mail at the time, which no doubt hastened the departure of APRA’s chairman after five years in the job:

Legal check on APRA chief’s deals

The
chairman of Australia’s financial industry regulator is the founder and
co-owner of a financial services firm which has been accused of
operating illegal investment schemes.

Dr Jeffrey Carmichael’s
Gold Coast-based company Atlantic 3-Financial (Aust) Pty Ltd has agreed
to freeze activity in its mortgage investments and allow outside
accountants to comb through records after a Supreme Court hearing
yesterday in Brisbane. The Australian Securities and Investments
Commission alleges Atlantic 3-Financial and its directors had pitched
the mortgages to investors without a required licence for managed
investments.

Justice Philip McMurdo said yesterday “the evidence before me indicates it’s an unlawful scheme.”

ASIC
maintains the unregistered schemes have operated since July 1998,
meaning the alleged infractions occurred over a three-and-a-half year
period when Dr Carmichael still served as a company director. Although
Dr Carmichael stepped down as a director and secretary of Atlantic
3-Financial in January last year, he and his wife Elizabeth retain a
third of the shares, with the balance held by Dr Fred Acker.

So let’s see. Costello has appointed one of Australia’s biggest tax
dodgers to the Reserve Bank and on discovering the scale of the
activity still won’t take a backward step. Then we have the former
partner of a convicted marketer of sales tax evasion schemes as
chairman of ASIC and a promoter of unlawful investment schemes running
APRA.

It
makes you think a bit about putting the friend of big business, Graeme
Samuel, in charge of the ACCC . Many of these appointments are of
personal friends. Other friendly appointments included Steve Vizard to
the Telstra board by his mate Richard Alston.

And who can forget the appointment of John Howard’s old mate John
Pascoe as chief Federal Magistrate when he and his company, George
Weston Foods, were regularly done over for breaching the competition
laws? Remember this exchange with Seven’s Mark Riley going into last
year’s election?

MARK RILEY: Prime Minister, in the news this week, the George
Weston case, which I am sure you are aware of. The ACCC – a $1.5
million fine, Justice Roger Giles saw price-fixing, he saw all sorts of
anti-competitive practices at play there between George Weston and the
Manildra Group. The chairman of George Weston, John Pascoe, has been
appointed by your Government as Chief Magistrate. Do you have any
concerns about his position now, knowing the result of that ACCC
prosecution?

JOHN HOWARD: No, not of itself, because the
court dealt with an issue, and they fined the company and the law took
its course. I don’t know whether the company is considering an appeal.
I am not sure, and I don’t really want to get into the detail. Mr
Pascoe, I know. He is a person of impeccable character, to my
knowledge, and he was checked out as you normally check these people
out when these appointments are made, and we saw no reason not to
appoint him.

Anyone see a trend here?