Former NSW MP and erstwhile partner of the premier Daryl Maguire cuts a pathetic figure in the ICAC witness box, meekly admitting to using his office as the representative of the good people of Wagga Wagga, albeit occasionally objecting that there were some holes even he wouldn’t crawl down to make a buck.
Maguire was a two-bit huckster, most of whose endless schemes failed to come off, though not for want of trying. But he was playing the same game played by far bigger, far more successful business and political figures across Australia: rigging the rules for their own benefit.
Australian business and politics is pervaded with the mentality that regulations are not to be adhered to but gamed, and if necessary changed by influencing those who make them, and intimidating, overriding or litigating those who enforce them.
Credible, powerful, independent regulators are needed to deter such behaviour, but it also needs a cultural shift from regarding lobbying for preferential outcomes as a core business activity to regarding it as evidence of a lack of integrity, managerial competence and credibility.
While the ICAC hearings have been unfolding, another saga of regulatory failure and poor culture has been playing out at the NSW Independent Liquor and Gaming Authority, which has teased out how rotten the culture of Crown was, from the board down. Directors treated their obligations with disdain, including in relation to some of the most serious regulatory requirements relating to casinos, around anti-money laundering.
Crown is a prime example of regulatory gaming, as Janine Perrett detailed this week. A giant black phallus now stands erect over Barangaroo on Sydney Harbour as testament to the absurd deal James Packer struck with the NSW Coalition government in 2012, with the NSW Labor Party — no stranger to cosying up to the Packers — lobbied into silence by their erstwhile colleagues and bosses, Mark Arbib and Karl Bitar.
Meantime junkets involving criminals, drug dealers and sex trafficking were going on at Crown’s Melbourne and Perth casinos, all enabled by a compliant Home Affairs Department.
The Crown board, with an array of prominent names, looks wholly respectable. Helen Coonan, former senior Howard government minister. John Horvath, former Commonwealth chief medical officer. John Alexander. Andrew Demetriou. Long-serving senior public servant Jane Halton. Harold Mitchell.
But the respectability — heavy with political and bureaucratic connections — is a veneer for the same sordid games Maguire was involved in at a lower level: wielding influence for mates. Only courtesy of extensive media reporting has Crown been brought up sharp and exposed to scrutiny by the NSW gaming regulator. The company’s culture, as Demetriou and Alexander admitted, failed.
At least, at this stage, there’s no suggestion Crown enabled child abuse. That was Westpac’s failing. Last month it accepted a $1.3 billion fine for tens of millions of money laundering breaches that included enabling 260 child abusers to make payments. Along the way it admitted that it could have spotted them earlier — which might have enabled them to be stopped earlier.
Austrac, unlike other regulators, was at least on the ball. But Westpac’s culture, like that of all the major banks, enabled this industrial-scale misconduct during the long years pre-Hayne when they were allowed to run amok by the Coalition government they so generously donated to.
Meanwhile, in the case of energy policy, the government has actually allowed its donors from fossil fuel companies to write the policy to boost gas consumption.
Last month also saw the CEO and two senior executives depart Rio Tinto over the shameful Juukan Gorge destruction, with the company citing a lack of individual accountability behind the decision — one forced on it by major institutional shareholders, not regulators.
Wherever you look, across different industries, even major corporations have profoundly flawed cultures and poor accountability that are only reactively addressed when an external intervention threatens.
Not every regulator is an Austrac or an ICAC. For years, ASIC was ineffectual and nobbled. The new aged care regulator is a study in hands-off regulation. They reflect a political culture in which compliant politicians are paid by donors to soften regulation in the name of slashing red tape, help companies, and underfund and disempower regulators where they can.
Maguire is only the crude, sordid end of a continuum that extends all the way to the Prime Minister’s office and the board rooms of some of our biggest companies, which encourages a culture of making the gaming of regulatory outcomes the core business model of major corporations.
Until that culture changes and we have powerful, independent regulators right across the economy, the scams and scandals will continue.