Not since Phil Coles got named and shame around the world as the IOC went through its rorts crisis in early 1999, has an Australian featured so prominently in a global financial rorting story as poor old Frank Lowy over the past 24 hours.
Being in control of the world’s biggest shopping centre empire puts a huge target on Lowy’s back, because the seven others named in the US senate report don’t have much public profile at all. Check out the committee’s hard-hitting press release here.
Two of the eight named pleaded the fifth last night and it will be fascinating to see what LA-based Peter Lowy does when he voluntarily fronts the hearings next Friday.
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The Lowys have long been known to play hard and push the envelope, whether it be through huge political donations, funding questionable community groups to stymie competitors or lobbying politicians who make planning decisions.
However, taking on the US Senate Committee on Homeland and Government Affairs will be something else. Even the all powerful Swiss bank UBS collapsed in a heap before the committee overnight and promised to get out of the tax haven business for US citizens.
That said, even the hard investigators of the ATO found the Lowys pretty tough, if this story by Colleen Ryan in The SMH back in July 1995 is to be believed:
Mr Frank Lowy, the newest member of the Reserve Bank board, saved an estimated $25 million when his family settled its long-running dispute with the Australian Tax Office in May.
The dispute involved two amounts of $42.8 million and $5 million received by a Lowy family company, Cordera Pty Ltd, in January 1987 and November 1988.
However, the Lowy family reached a settlement with the ATO to pay a total of $25 million. The settlement caused consternation among Tax Office staff. Two investigators involved in the investigation took stress leave after the settlement decision.
The ATO staff were upset primarily on equity grounds. They saw the settlement as yet another example of the Tax Office having one rule for the ordinary people and another for the big boys. They claim that if the case involved a coffee shop owner or some other small business operator the ATO would pursue interest and penalties without hesitation.
If any Australian family was going to be on that Liechtenstein list, it was the Lowys. Even old family friend David Gonski, who will be elevated to chairman of the ASX in October, has been implicated for attending a meeting when the Lowys were setting up there play.
This yarn will have plenty of legs as Fairfax’s Michael West neatly explained in this swashbuckling comment piece today.