What on earth has happened to the Robert Gerard tax affair? Why has it disappeared off the radar screen?

Here we have a heavyweight Liberal Party donor who settled with the Australian Tax Office without prosecution and had his tax bill halved after an audit report that apparently detailed indictable offences including a sham company set up in a Carribean tax haven, false records, false statements and hindering tax officers in the performance of their duties.

It all spilled out in public four months ago when Gerard was forced to resign as a Reserve Bank board member – so why aren’t the appropriate authorities pursuing what appears to be one of the worst cases of tax avoidance in Australian history?

Last month, the Director of Public Prosecutions Damien Bugg QC washed his hands of the case when he told a parliamentary committee that he had no power to direct a government agency to refer a matter to him.

Except that two former DPPs – Mark Weinberg and Michael Rozenes – did exactly what Bugg says he can’t do.

In 1991, Weinberg, then DPP and now a judge of the Federal Court of Australia, read a report in TheAge about lawyers who were caught up in an ATO audit net and not prosecuted. Although no names were mentioned in the article, Weinberg’s interest sparked a phone call to AFP Commissioner Peter McAulay requesting an investigation into the errant lawyers.

They singled out Melbourne barrister Tim Morris, who had been audited by the ATO two years earlier as part of an industry-wide audit of barristers and solicitors. Morris voluntarily disclosed understated gross income of $220,362 over a nine-year period, which he subsequently paid in full. As part of the settlement the ATO promised not to prosecute him.

But that was before Weinberg read The Age and triggered an investigation which resulted in Morris receiving a two-year suspended sentence – but on appeal by the DPP was upped to a six-month custodial sentence. Morris was also suspended from working for two years by the Victorian Bar Association. In a show of strength the Morris case was prosecuted by the then newly appointed DPP Michael Rozenes QC, who is now chief judge of the Victorian County Court.

Morris, now a consultant for BM Legal in Melbourne, says he is staggered by Bugg’s response to the parliamentary committee. “It’s bullsh*t; they did it with me and there have been others since,” he said. An AFP spokeswoman said it is not unusual for the DPP to refer cases to them and last year they had one case from the DPP for investigation and preparation of a brief of evidence. She was unable to provide information for earlier years.

So what is Bugg suggesting – that his predecessors were wrong? Or is he merely being selective in who he prosecutes? Bugg, it may be recalled, came in for criticism earlier this year, when it was revealed that 4102 welfare cheats accounted for two-thirds of cases handled by him last year while only 249 tax cheats were referred to him.

The question that needs to be answered is: why has the politically-charged Gerard matter remained untouched by our two leading criminal agencies, the DPP and AFP?