The Treasurer seems to have a curious interpretation of due diligence. He’s copping it all over the meeja yet again today.

At least one of the odder questions around Reserve Bank Board Member
and high profile Liberal Party donor and activist Rob Gerard, the
donation from the mystery entity Catch Tim, has finally got a proper explanation in a piece in The Australian by Andrew McGarry and Glenda Korporaal.

But this story also raises an interesting issue. It points out “In
2003, Gerard and his wife were invited by Prime Minister John Howard to
attend a barbecue to meet visiting US President George W. Bush.” Yep.
That barbecue.

Gerard is also on the Prime Minister’s Community Business Partnership board. Factor this in and look at McGarry and Korporaal’s article in more
detail and what it has to say about Gerard’s blue ribbon Liberal
credentials and history of involvement in the party, and it’s very hard to do
anything other than conclude that Gerard must be closer to the PM than he is
to the Treasurer. The Treasurer only made the appointment.

So why isn’t the PM dealing with the sort of stuff Cossie cops today? Leading the front page of the Fin – not online – Morgan Mellish and Laura Tingle have a piece, “It’s not my job to check, says Costello”:

Treasurer Peter Costello yesterday washed his hands of any
responsibility for checking the background of new Reserve Bank of
Australia board members, telling parliament the obligation for
providing details of outstanding tax issues rested with the proposed

Mr Costello and Prime Minister John Howard faced a second day of
grilling about the circumstances surrounding the 2003 appointment of
Liberal party donor Robert Gerard to the RBA when his Adelaide-based
company, Gerard Industries, was subject to a finding from Australian
Tax Office investigators that it had engaged in tax evasion…

In the News Limited papers Terry McCrann – online later today – says Costello is digging his way to embarrassment:

Peter, a word of advice: stop digging. Whether or not South
Australian businessman Rob Gerard should ever have been appointed a
director of the Reserve Bank might be debatable. Whether he should
remain is not…

McCrann goes on to say that Costello has:

… gone out of his way to dig
himself into an ever-deepening ‘ownership hole.’ Yesterday’s responses
verged on the embarrassing – actually, leapt deep into embarrassing.

Costello said Gerard had “broken no law.” Well, that’s
assuring – if somewhat short of a resounding endorsement of his

Costello said Gerard had only done “what every Australian is entitled
to do.” Absolutely true – every one of you can set up a paper company
in Bermuda and pump around $1 million to $2 million a year of “insurance premiums” through it…

It also rings of a famous saying that Costello as a lawyer I’m sure is
aware of. Anatole France’s: The law in its majestic equality forbids
both rich and poor from sleeping under bridges.

Dennis Shanahan in The Australian puts in the boot in hard again. And The Age editorialises that: “Costello’s blunder spoils his own good work.”

Yes, well, this is all an embarrassment for the Treasurer. But who’s
bright idea was it to put Gerard on the Reserve Bank Board? Who really
pushed? A number of Cabinet members offered variations on “Search me,
guv” when this question came up yesterday.

It doesn’t look good for Costello, or his ambitions, as we said
yesterday. He’s in a tight corner. In which case he may just have to
use whatever weapon comes to hand.

PS. Some good thoughts on Gerard’s position by former Paul Keating adviser John Miner in Margo Kingston’s Webdiary.