Put them in the slammer, lock the doors and throw away the key

Matthew Hooton in NBR (I bloody had to traipse up to the How­ick Sta­tion­ers again) makes the case based on an Aus­tralian prece­dent that Michael Cullen and Maryan Street should be in the slam­mer doing hard time for their delib­er­ate malfea­sance over ACC.

In 2001, Aus­tralian insur­ance giant HIH col­lapsed with debts of around A$5 bil­lion, caused by gross mis­man­age­ment, includ­ing charg­ing too lit­tle for pre­mi­ums and fail­ing to put enough aside for claims.

The Aus­tralian author­i­ties took the mat­ter seri­ously, includ­ing Prime Min­is­ter John Howard, who estab­lished a royal com­mis­sion.  The company’s prin­ci­pals were jailed for offences includ­ing know­ingly dis­sem­i­nat­ing false infor­ma­tion, fil­ing false finan­cial state­ments, being inten­tion­ally dis­hon­est and fail­ing to dis­charge their duties in good faith and in the best inter­ests of the company.

The Aus­tralian author­i­ties’ rigor might help explain why the Aus­tralian finan­cial sys­tem is per­haps the only one in the world to be almost entirely untouched by the global finan­cial crisis.

Exactly, I was liv­ing in Aus­tralia at the time of this coll­pase and was also involved with help­ing ASIC with some soft­ware that nailed these pricks. The other thing that Aus­tralian has is the ACCC as well that has largely pre­vented the col­lapse of finan­cial insti­tu­tions like the coll­pases we have seen here.

The sim­i­lar­i­ties between ACC and HIH are astounding.

This week, New Zealand’s biggest insurer, ACC, reported a NZ$4.8 bil­lion loss on top of a NZ$2.4 bil­lion loss the pre­vi­ous year.

Major fac­tors were charg­ing too lit­tle for pre­mi­ums and pay­ing out too much in claims.  It con­tributed mate­ri­ally to the Crown’s deficit reach­ing an unprece­dented and dis­as­trous $10.5 bil­lion in the year to June 2009.

Like HIH, ACC’s cri­sis was know­ingly hid­den from the pub­lic.  The Treasury’s Pre-Election Eco­nomic and Fis­cal Update, signed by then finance min­is­ter Michael Cullen, did not dis­close it, a fail­ure sub­se­quently found by an inde­pen­dent inquiry to have breached the Pub­lic Finance Act.

Even worse were the pub­lic state­ments of then-ACC min­is­ter Maryan Street.

On June 26, 2008, ACC was appar­ently strong enough for Ms Street to announce that 400,000 casual and sea­sonal work­ers would get improved cover.

On Sep­tem­ber 11, she had enough con­fi­dence in the company’s finances to announce a re-elected Labour gov­ern­ment would cut the motor vehi­cle levy from $254 to $203.

Three weeks later, and just five weeks before the elec­tion, Ms Street was at it again, announc­ing an expan­sion of ACC enti­tle­ments to peo­ple over 65.

The most char­i­ta­ble inter­pre­ta­tion is that the for­mer uni­ver­sity aca­d­e­mic might suf­fer from some advanced form of onio­ma­nia that makes her believe that, despite bal­loon­ing lia­bil­i­ties and a global finan­cial cri­sis, it was pos­si­ble to keep buy­ing new ser­vices from ACC, while cut­ting its rev­enue, and expect it to remain viable.  Alter­na­tively, per­haps she was just telling lies in the heat of a close elec­tion campaign.

Union boss and Labour insider Ross Wil­son, then ACC’s chair­man, was also complicit.

Why are they not await­ing trial no? Oh that’s right, maryan is off on a jaunt with deputy leader Phil Goff and Michael Cullen got given a job to fuck off out of par­lia­ment. This is why, I have been call­ing, seem­ingly upon deaf ears about the for­ma­tion of an Inde­pen­dent Com­mis­sion against Cor­rup­tion. if this wasn’t col­lu­sion at a min­i­mum then it was cor­rup­tion to deceive in an elec­tion year.

Per­haps we even need a Truth and Rec­on­cil­i­a­tion Com­mis­sion, with­out the reconciliation.

Pop­u­lar­ity: unranked [?]

Related Posts:

• Ten­der­watch – Is A.C.C. about to get tucked again?
• A.C.C. doing a Fidelity Life
• Miss­ing the Point
• A.C.C. and the S.F.O.

Tagged as: ACC • Matthew Hooton