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Wednesday, 26 June 1996
Page: 2221

Senator MICHAEL BAUME(12.46 p.m.) —My remarks today are not aimed at some political advantage, although I am speaking about the former Prime Minister Mr Keating. Mr Keating has left the political scene but I do not know whether he has exercised an option to return to his formerly half-owned piggery. So there are no political points to be scored from what I am saying. But I am seeking to set the record straight. After years of abuse of me, I am determined that there should be no question about the accuracy of my revelations over the years about Mr Keating's relationship with his piggery.

My purpose is to ensure that there be no rewriting of history to show Mr Keating as some kind of hero of the workers whose behaviour was at all times above any kind of suspicion or proper inquiry. The facts are that it is not customary for treasurers or prime ministers of Australia to enrich themselves in office. One of the purposes of the disclosure requirements for politicians is to enable the Australian public to be fully informed about any such enrichment that takes place and to ensure that it does not represent any abuse of office for personal advantage.

There can be no argument that as Mr Keating prepares to move into his $2.2 million Sydney residence he is far richer than he was as a junior union official before entering parliament and that there were considerable earnings other than from parliamentary or ministerial salary during his time in office. The large profit, for example, on the sale of his piggery interest, while the Commonwealth Bank lost millions of dollars of its money, was revealed only in court documents. That provides a case in point.

My concerns in raising questions about Mr Keating's otherwise secretive full involvement, initially while Treasurer, in his half-owned piggery group and in its joint venture with a Danish multinational pork group, Danpork, which was signed while Mr Keating was Prime Minister, were proper concerns of any senator determined to ensure that there be no taint of impropriety over the Australian parliament or government.

Yet I faced a concerted campaign of personal abuse, illegal obstructionism by way of failures by these companies to file annual returns, and the filing of false and inaccurate company returns with the Australian Securities Commission. Obviously, there are plenty of examples of that personal abuse. This chamber is well aware of them. I think `parliamentary filth' was one of the least charming that he applied to me. But I suppose that being called a guttersnipe by people of the status of Laurie Brereton is some kind of an accolade—and I accept it as such.

I was not the only subject of abuse from the former Prime Minister or his staffers such as Mr Turnbull, or, should I say, Mr Pitbull. Reports are legion of journalists and editors who dared to publish anything about Mr Keating's piggery interests and his remarkable increasing wealth being subjected to incredible tirades of personal abuse. The editor of the Sunday Age spoke of such a tirade a couple of years ago on radio. That tirade resulted in Mr Keating banning the Sunday Age from prime ministerial press conferences.

A prominent female journalist was called a `fat-arsed bitch' by Mr Keating and then became known as FAB. I might say that in my view she is fab, but short for fabulous. A Sydney Sun-Herald correspondent was threatened with a tax office inquiry—which he had the courage to report—for reporting on Mr Keating's activities. An ABC Newcastle part-time radio journalist was sacked, following complaints about her totally accurate report of pollution at the Keating Parkville piggery. A distinguished Age columnist was dropped after daring to ask a series of questions in his column about the Keating piggery.The editor of the Canberra Times was abused for printing detailed reports of official Australian Securities Commission documents relating to the Keating piggery. So it goes on.

It is no wonder that the media in general felt too terrorised to report the great bulk of the factual information detailing the illegal and improper behaviour of Mr Keating's piggery group while he was its half-owner and, of course, while Mr Keating kept on saying, `But I have no role in the management of this group.' No, the group was managed by his 50 per cent partner whom Mr Keating trusted so much that he had given him his power of attorney.

One would think that any person who owns 50 per cent of a company that is involved in constant breaches of the law, in contemptuous disregard of the requirements of the Australian Securities Commission, would at least have some sense of responsibility—but not Mr Keating. When Mr Keating sold out of the piggery at a huge profit, with a repurchase option in the memorandum of understanding to the sale, the media ignored further evidence of impropriety on the basis of saying, `Well, now he is out of it'.

I must say, however, that some journalists like Colleen Ryan of the Sydney Morning Herald and Trevor Sykes of the Australian Financial Review—neither of whom, I might add, are in the gallery—persisted and wrote detailed exposes that were outstanding examples of honest journalism that made some gallery journalists who had dismissed me, in the Labor words, as a `muckraker', look even sillier than usual.

The Senate knows the accuracy of my revelations of illegality by the Keating piggery companies; successful prosecutions of his partner and his representative as a director or secretary for breaches of Corporations Law have all confirmed this. Details have been tabled in this parliament. The extraordinary role of the Commonwealth Bank of Australia in financing this mess has still not been properly revealed. Today I gave notice of a motion relating to this problem, which the honourable member for Mackellar (Mrs Bishop) raised last year in the House of Representatives, when unfortunately the press gallery was, as usual, not very interested.

The comments by the honourable member for Mackellar relate to the way that the Commonwealth Bank successfully sought to hide the special relationship that existed between the Commonwealth Bank in lending to this piggery group and Mr Keating, who bought into the group while Treasurer and was the Prime Minister when the joint venture deal with the Danish international company Danpork was put into effect. The honourable member for Mackellar said:

. . . if there had not been a class order granted back in 1993, there would have been a requirement on the bank to report on the relationship between Mr Keating and the Commonwealth Bank and the nature of the loans he had from that bank. I am further concerned about this matter because, on the last day before the last election in 1993, a document dated 6 August 1992 in the name of D.N. Maynard of the Commonwealth Bank, purporting to be a report to the credit committee of the board, was the subject of a legal action by the Commonwealth Bank to prevent this document being published by Channel 10. It was an interim injunction that was sought and was gained.

The honourable member went on to say:

Class orders had been obtained which effectively exempted directors and auditors from reporting on related party disclosures.

They relate to the Commonwealth Bank. The honourable member continued:

In 1993, under the guidelines for financial statements of public authorities and commercial activities, which were issued by the Minister for Finance, it was said with regard to Accounting Standard AAS22 on related party transactions that `subject to Ministers not being taken to be related parties in relation to matters falling within their statutory responsibilities, they were to be exempted'. But in all other respects, ministers of the executive government were to be related parties for all public authorities and Commonwealth commercial entities. That is quite clearly meant to cover the Commonwealth Bank.

Accounting Standard 1017 was amended.

I mention in passing that the Treasurer was the minister responsible for the Commonwealth Bank at that time. At that time, the Treasurer was Mr Keating. The honourable member for Mackellar continued:

It was amended in order to toughen it up so that we could have a stronger accounting system. Immediately that amendment was gazetted, there was a letter written by the Australian Bankers Association to the Australian Securities Commission, asking for an expedited and amended class order to be given in respect of reporting on related third-party transactions. The worrying thing was that the conclusion of the letter says this: `It is therefore submitted that there is an overwhelming case for the ASC to extend the scope of the Class Order in the terms sought. If you wish any further information or explanation in support of the application please call'—

and a man is named—`of Commonwealth Bank of Australia'—

and the phone number is given. It continues: `Because the financial year of Commonwealth Bank of Australia ends on June 30 1993, it is anxious to have the benefit of the ASC's ruling on the extended Class Order as soon as possible. Other member banks of the Australian Bankers' Association are similarly affected by the disclosure requirements but their financial years occur later in the calendar.' Quite clearly—

as the honourable member says—

this letter was written at the behest of the Commonwealth Bank with regard to expediting the granting of the extended class order because of their reporting period.

The honourable member for Mackellar asked representatives from the Australian Securities Commission at a hearing of the Joint Committee on Corporations and Securities whether they

realised that once that class order had been granted the relationship between the then Prime Minister, Mr Keating, and his piggery group of companies and the Commonwealth Bank did not need to be reported. They replied that they did not know that that would be the effect of the order.

The honourable member then asked whether it would have made a difference in their giving that order. They replied that they certainly would have been hesitant and given it far more consideration. The honourable member said:

My specific concern relates to the effect that the class order had in preventing information as to Mr Keating's dealings with the Commonwealth Bank, bearing in mind the relationship between the government and the Commonwealth Bank, and particularly the Treasurer (Mr Willis) and the Commonwealth Bank, and the need to have transparency.

They are not my words but the words of the honourable member for Mackellar.

The clear fact is that the guidelines of the Minister for Finance require ministers to be accountable when they act in other than their capacity as a minister. The honourable member for Mackellar said:

I do not believe that Mr Keating's investment in the piggery group of companies had anything to do with his ministerial responsibilities.

That is self-evident.

The big question is this: if there was nothing improper to hide, why has the Commonwealth Bank gone to such extremes to prevent the normal release of information normally required by law? It took out an injunction—it clearly indicates the accuracy of the document—to prevent the publication of the report to the credit committee of the Commonwealth Bank revealing the provision for bad debt of $4.5 million against the Keating piggery group. That loan was made when Mr Keating was the Treasurer and when Mr Keating's partner in this matter was an owner, along with Mr Keating's former colleague Mr John Brown.

There is no doubt that Mr Keating subsequently received a substantial benefit while Prime Minister as a result of the Commonwealth Bank's extraordinary financial support of his half-owned piggery. It is a matter of concern that the report the Commonwealth Bank prevented from being shown on television notes that the loan given was because of the failure to investigate adequately the financial position of the operation.

It is about time that this cover-up of an incredible loan involving enormous losses at a time when Mr Keating made a very substantial profit on the sale of this very expensive piggery, at least as far as the Commonwealth Bank is concerned, was revealed. It is about time that the cover-ups were brought to an end. It is about time that the gallery, for example, stopped being terrorised by the former Prime Minister. He is not around any more to bark at them and threaten them with non-admission to press conferences.

The facts are that Mr Keating has benefited from a whole lot of activities, particularly the fact, which cannot be denied, that the company's accounts were false and Mr Keating made a mint by selling out to an Indonesian group. How curious that his new venture in private life involves business interests in Indonesia!