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Wednesday, 29 May 1996
Page: 1277


Senator MICHAEL BAUME(12.46 p.m.) —Today I want to put the record straight. I do not think many members of this chamber have been subjected to the same sort of personal abuse as I have over the many years that I have been pointing out—


Senator Vanstone —I don't know!


Senator MICHAEL BAUME —Not even you, Senator Vanstone. I have been pointing out the reality, the facts, of what, I think, many of us in this chamber believe to have been the potential for conflict of interest involving the former Prime Minister, Mr Keating, as a result of investments he made while he was Treasurer and deals he made while he was Prime Minister.

No-one objects properly to treasurers, ministers or prime ministers having investments and keeping those investments while in those positions of office. However, as I have pointed out repeatedly, many of the actions of Mr Keating and his partner raised the question of potential conflict of interest in this chamber. Honourable senators would remember that Mr Keating was the half owner of a piggery he acquired while Treasurer, and while Prime Minister he was the half owner of that piggery when it entered into a multi-million dollar joint venture with a foreign multinational company.

The question of potential for conflict of interest has been raised many times in this place. I was intrigued to note that when it was raised recently in the other chamber, Mr Beazley quite wrongly said, `But Mr Keating sold out his interest when he became Prime Minister.' That is simply false. Apart from there being a campaign of personal vilification against me, what concerns me is that there is an attempt to rewrite history about Mr Keating's role—the real role he played in this piggery matter.

The reason why this matter has come up again is that Mr Keating has announced that he intends to go into various business enterprises in Asia, particularly in the country from which came the money that rescued Mr Keating from what was, on the face of it, a disaster in the piggery that resulted in a very handsome profit for Mr Keating while the Commonwealth Bank of Australia suffered a huge loss. This piggery is coming back to haunt him.

It is no good members of the opposition saying, `Look, this has all ended a long time ago.' It did not end a long time ago, as evidenced by Mr Beazley's very recent attempts to rewrite history about it. I want to stress to this chamber that everything I said here was backed by documentary evidence, by searches of the Australian Securities Commission, the Land Titles Office and so on. The things that I pointed out as being improper, illegal and irregular have all been demonstrated to be exactly that. In fact, it is even worse than it appears on the surface.

Over several years I noted that the companies that Mr Keating half owned were in constant breach of the Corporations Law. Whenever I raised the matter in this parliament, I was accused of being everything that one should not say in this chamber, because the words are probably improper. I have been accused of even worse things outside this chamber, but the status and nature of the person making the accusations is such that I regarded his comments as an accolade. The reality is that Mr Keating was a half owner of these companies—while he was Prime Minister and Treasurer—while they were breaking the law. No amount of personal abuse against me can change that situation.

The reality is that there is a smell over the Keating piggery and Keating's involvement in it. That smell, that lingers still, comes not only from the effluent problem that prompted, in January of this year, the Scone Council in New South Wales to give the new owners of the ex-Keating piggery 60 days to clean it up or face closure—by the way, according to the locals, things are now less worse up there after some work has been done. Even more on the nose is Paul Keating's business partner and friend, the butcher-turned-accountant Achilles Constantinidis, who ran the piggery group for Mr Keating during their almost three-year piggery partnership.

Added to this problem is the Sydney solicitor Christopher Coudounaris, the secretary of the family company Pleuron, who has been found guilty in the Sutherland local court of three offences against the Corporations Law relating to his failure to file annual returns for three companies involved in the Keating piggery joint venture with the Danes. Four similar actions against Achilles Constantinidis have also proceeded. Mr Constantinidis has been found guilty of the very offences that I was attacked, in this chamber, for pointing out were taking place. This is on top of all the penalties imposed by the Australian Securities Commission—I think there were 13 or 14—on Mr Constantinidis and/or his companies for failure to meet the basic requirements of the Australian Securities Commission in respect of annual reports.

The past does seem to be catching up with Mr Constantinidis. It is probably more like chickens coming home to roost than bringing home the bacon. That past includes the years of his very close involvement with Paul Keating—a relationship close enough for Paul Keating and his wife, Annita, to entrust Mr Constantinidis, together with Mr Keating's brother, Greg Keating, with their power of attorney since 1989.

Why would Mr Keating, then Treasurer, give Mr Constantinidis his power of attorney? That power of attorney, according to records at the Titles Office when I last looked, had not been officially revoked. It may well have been subsequently; I do not know. But the fact is that this power of attorney indicated a very close relationship between Mr Constantinidis and Mr Keating at a time when Mr Constantinidis was seeking to involve the Danes in a joint venture which was needed to rescue this financially unstable company from disaster.

The former Prime Minister, when he was Prime Minister, was subject to severe criticism in the Danish stock market journal just before Christmas, which featured Paul Keating on its cover under the heading `Prime Minister involved in Danish scandal', describing the Danpork joint venture with the Keating-Constantinidis piggery group as a `fiasco' for which the Danish chairman blamed his choice of Australian partners. In that article Mr Keating was described as having `chaos in his money matters', his piggery group as being an `economic morass' that was constantly behind in their payments and the Keating-Constantinidis piggery site at Scone as `totally unsuitable' for the joint venture.

Added to these problems—and I am restating some of them because these are the matters that I have been criticised for raising; matters that go to the heart of the potential for conflict of interest—is the curious involvement in the cascading TV tender winner, Mr Albert Hadid—who, by the way, seems to have close business links with Mr Keating's sister, Anne Keating—and the New South Wales right wing Lebanese number cruncher Mr Eddie Obeid in the piggery group, along with Mr Constantinidis's business partnership, which I must say I cannot understand, with the Indonesian joint venturers Gerry Hand and Bechara Khouri. Mr Khouri, I understand, is a `best mate' of Mr Keating's electorate officer at Bankstown who is now the candidate for Blaxland.

In any event, at best the Constantinidis mess is an embarrassment to Mr Keating and an underlining of this potential for conflict of interest. This problem has been compounded by Mr Keating's obsessive secrecy about this piggery venture, which only really came to light in its full flowering, if I can use that expression, as a result of my inquiries which had to go through the Australian Securities Commission. They certainly were not revealed properly in any declaration of interest.

What has happened to Mr Constantinidis since I raised the fact that Mr Keating's half-owned companies were being improperly run is this: Mr Constantinidis has been suspended by his professional body for unprofessional conduct. He is being sued in the Supreme Court for breach of trust. I do not want to enter into the rights and wrongs of that matter; it is before the courts. He has been found guilty of four breaches of the Corpora tions Law. He has been penalised repeatedly by the ASC for continual failures to meet its reporting requirements. He has been criticised by a Supreme Court judge for diverting company funds to an unauthorised bank account. He has been criticised in the Industrial Relations Court—in fact, only last month—for harshly, unjustly and unreasonably dismissing three piggery workers after their successful complaint about being paid less than the award wage while Mr Keating was a half-owner.

He has been accused by his Danish former joint venture partners of having tarnished their image in Australia and blamed by the Danes for the Danish parent company's $10 million loss last year. He was also the chief executive officer of the piggery group when legal action was taken against member companies to recover years of unpaid workers compensation insurance premiums when workers superannuation fund payments were not made and when at least three workers were found to have been underpaid award wages for years—all while Mr Keating was the half-owner. There is not only the potential for conflict of interest; there is the potential for a Prime Minister being put in an intolerable position.

Despite my repeated suggestions for Mr Keating to dissociate himself from, let alone condemn, the improper behaviour of Mr Constantinidis in Mr Keating's piggery companies, particularly his contemptuous disregard for the Corporations Law, Mr Keating's only response to me was personal abuse. I was even described, I think, as `parliamentary filth' at one stage for daring to raise these matters.

The closeness of their relationship has some bearing—closeness evidenced by that power of attorney—on many of the unanswered questions already posed in the parliament about Mr Keating's own role in the piggery, particularly over the nature of disposal of his half-ownership, whether he retains any existing or potential ownership rights and the role he played in establishing the joint venture with the Danes in the first place. As I said, they had been close enough since 14 December 1989, long before Treasurer Keating became Constantinidis's 50 per cent partner in the Brown and Hatton piggery and refrigeration group on 15 May 1991, for Mr Keating not only to entrust him with his power of attorney but also with the absolute control of the company in which Paul Keating had invested almost half a million dollars in what he described as `punting the super on the future'.

So all the time that Australian government officials, particularly in Austrade, were putting an incredible effort into generating the joint venture with Denmark that was the only hope of saving then former Labor minister John Brown's piggery group from financial disaster, Paul Keating had a very close relationship with Brown's then partner Constantinidis.

Three weeks after Mr Keating bought his half-ownership of the piggery while Treasurer in May 1991, Austrade officials were warned that Keating's company's yet unnamed involvement in the Danpork joint venture was a `sensitive matter about which we should not make inquiries'. Even worse, Austrade's then boss noted in a memo to him on 26 March 1992 when Mr Keating was Prime Minister and a half-owner of the piggery:

What can we do for Danpork? I would like to pull all stops out.

So here were government instrumentalities doing everything they could to bring a major benefit to the Prime Minister at the time, by way of a joint venture. If the opposition would like to have this letter tabled, I would be only too happy to table it. In fact, while I regret that I did not show it to the opposition first, I seek leave to table this letter.


Senator Chris Evans —We have not seen it.


Senator MICHAEL BAUME —I know you have not seen it. If you see it and do not want it, you can reject it. Is that acceptable to you?


Senator Chris Evans —You can seek leave after we have seen it.


Senator MICHAEL BAUME —I just want to say that criticism of me seems to have been clearly misplaced. The courts have demonstrated that I was right. (Time expired)