person who’s unlikely to emerge from the Robert Gerard scandal
unscathed is Tax Commissioner Michael Carmody, the author of a letter
to Gerard clearing him of any “current disputes with the Tax Office in
respect of your personal affairs” before he was appointed to the
Reserve Bank board.

Gerard forwarded Carmody’s letter to Peter
Costello as evidence he’d been given a clean bill of health from the
Tax Office, and Costello yesterday brandished it in parliament as proof
that he’d conducted the proper checks and Gerard was squeaky clean when
he was appointed to the Reserve Bank board.

That is
disingenuous, to put the best light on it, and it raises an obvious
flaw in the system. Any government serious about properly vetting
appointments to high office wouldn’t rely on such a letter – they’d ask
the applicant to sign a confidentiality waiver and make their own
official inquiries.

But should Carmody – and therefore the tax
Office – also shoulder some responsibility here? In writing his
response, he must have had some knowledge of the purposes to which such
a letter might be put, and he must also have known it could have been
misleading not to mention the matter of a 14-year $150 million dispute
between Gerard’s company and the tax office.

So why did he
neglect to mention it? Did the small matter of a $150 million major
bunfight simply slip his mind? Or was he colluding with Gerard and the
Treasurer to give the Adelaide businessman a misleading clean bill of

And even more importantly – has another independent
Australian institution, the Australian Tax Office, also been dragged
into the Gerard Affair by Costello and the government in its zeal to
deny to undeniable?