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Costello burns Gerard candle at both ends

John Miner


DECEMBER 2 UPDATE 2 PM by Margo: Gerard quits - will this save Costello? Should it? Costello tried to save himself by abandoning Gerard via the Oz today - see Costello rejects Gerard's defence. ATO did soft settlement with Gerard Co. after appointment - see Gerard's $75 million to settle tax 'sham'

John Miner is a Webdiary columnist,  a journo and ex-staffer to premiers and a prime minister, and founding member of The New Institute, which argues for a place in national debate for Australians who live beyond the capital cities. John's last Webdiary piece was The Dismissal and the legacy. His IR power to the feds: the Australian people always say no gives an idea why the Howard government is rushing its unpopular IR and Welfare to Work legislation through parliament. Margo's piece on the Costello/Gerard scandal is at Nowhere to hide, Peter, on the Libs' million dollar man.   


I am not sure any of the commentary about Robert Gerard, in the media or parliament, has come to grips with the central issue.

It's not the question of how Mr Gerard came to be appointed to the Reserve Bank board.  It's not the question of whether he was guilty of tax evasion.

The real issue is how the ATO arrived at a settlement with Mr Gerard and his companies.

Beginnings are one thing.  Endings, in the public commentary we have seen, read and heard, seem to be something else. 

In this case, the ending is not separate from the beginning.  They are merely opposite ends of the one process.

As a nation, we seem to have become accustomed to the practice of out-of-court settlement of prosecutions. 

When it comes to offences against the taxation laws, this is hardly surprising. As the Treasurer indicated last week by announcing the excision of 2,100 pages, there's a lot of ridiculous and complicated nonsense in the tax laws.  It must be very hard sometimes to prove intent, almost as hard as it must be sometimes for the taxpayer to comply perfectly.

A difficulty with settlements is that the evidence is customarily not made public.  "Difficulty" if you're a member of the public: it's a positive advantage to those who, for one reason or another, don't want the evidence made public.

It should be borne in mind, also, that prosecutions are judicial, settlements administrative. Yes, settlements are arranged by lawyers, but those lawyers are instructed by public servants.

So the it was the servants of the ATO who agreed to settle with Mr Gerard and his companies.

And to whom do they answer?  Who is their Minister?  The Treasurer, the same person who put forward Mr Gerard as suitable for appointment to the Reserve Bank board.

I wouldn't suggest for a second that the Treasurer would interfere with the regulatory function of the ATO by ordering or suggesting that a prosecution be dropped.  He might wish it; he's allowed to do that.

There must come a time in the administrative process when it crosses the mind of a public servant that the departmental policy does not include embarrassing his or her Minister.

Does he or she want to stay living in that house in Griffith, where the kids can walk to Canberra Grammar? 

Or will the kids enjoy Sulphur Springs High after Dad gets "seconded" to the Department of Agriculture and posted to Woop Woop West? 

Will Mum enjoy sacrificing her salary because there's no work in Sulphur Springs since the drought?  Will she happily fill her social calendar with visits to Kathy's Kolorful Kuts, the leading hairdresser on the Desolate Highway, just 128 km from their home overlooking Lake Disappointment? And what of their membership of the Australian National Gallery, the subscription to Musica Viva, the kids' classes at the Alliance Francaise?

Will the couple enjoy playing tennis with people who think it's a social event? High-flyers know that every game exists to be won, that there's no such thing as a friendly fight. You can't even throw a game against your boss because he wants to see that killer instinct.

Most of all, how does Dad get back to Canberra if he's posted out of sight and out of mind of the high-flyers, if he's not available for the 9 o'clock Mass at St Christopher's, Friday evening drinks at the Hyatt, or the occasional lunch with the Commissioner at the Commonwealth Club?

Welcome to the nightmare of the high-ranking public servant.

So, would a public servant in the ATO like to embarrass Peter Costello by ensuring that all the activities of his nominee to the Reserve Bank board were put in the public domain?

We reiterate that we are not alleging Peter Costello leant on anybody. He wouldn't have to, would he?

The process of settling a legal prosecution is lacking in transparency. It would be better for all concerned if it didn't happen.

At least one commentator, in The SMH, believes the whole thing will be forgotten if Mr Costello makes a good recommendation next time (which will be when Frank Lowy leaves).

I beg to differ.  Mr Gerard and the Treasurer had their destiny in their own hands. Either Mr Gerard should have resigned from the Bank, or the Treasurer should have ensured that justice was not only done but seen to be done.

Now it's too late.

Robert Gerard cannot clear his name or uphold the reputation of his companies. 

And Peter Costello, even on the most generous view, can never be seen to have done the right thing when he sits at both ends of two obscure processes, the appointment of a new member to the Reserve Bank board and the out-of-court settlement of tax matters involving the same person.

They'll both carry it around their necks for a long time, especially if Mr Costello wants the leadership of his party. (Did I say "if"? Good Lord.)

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re: Costello burns Gerard candle at both ends

While all of this is going on, little mention is being made of his chairmanship of the Australian Made Campaign. By the looks of their website he's still in that position.

Such being the case, wouldn't it be inappropriate to represent Australian manufacture when you've been financing your endeavours through foreign tax shelters?

Surely the Prime Minister is asking Robert to step down as we speak.

On a South Australian level, I wonder if the Fin Review leak has any connection to last week's SA debacle over the Libs lack of campaign funds to fight the State election next March?


LIBERAL Party president Christopher Moriarty yesterday accused some members of his state executive of treachery and vowed to "drum the treacherous bastards out of the party" if they continued to leak confidential information to the media.

Mr Moriarty's attack followed an Advertiser report on the state of the party's finances, believed to be only $150,000 - well short of its $1 million election target.

He would not comment on how much the party had in its coffers. However, he launched a blistering attack at his senior party colleagues, who were briefed on the Liberals' fundraising earlier this week.

Mr Moriarty said he would raise the issue "long and loud" at the executive meeting on Monday night.

"If we catch these treacherous bastards, I will drum them out of the party. These leaks have come straight out of the executive, and I intend to do whatever I can to stop it," he said. "If we have to meet next week, we will; the week after that, we will, the week after and the week after . . . If we were at war, these people would be shot. It's treason."

This story was written by our friendly former foreign affairs press secretary and ex-Liberal politician.

I wonder what services Mr Gerard was asking for in return for this year's donation, and whether a transaction occurred. If it didn't, and the SA Libs are suffering because of it, I could understand how a little bitterness could turn into an act of revenge.

Perhaps this is an instigated campaign against Costello via Gerard from a State party level?

Plots do thicken too easily.. I could be totally wrong, but it's a train of thought worth following.

I've been confused about some of this for nearly a couple of years now, as you'll see in the fifth listing of this 2004 Crikey Yoursay. I had suspected, partially from looking at WA Rail contractor lists, that the proximity of Clipsal and Parsos/Worley in WA, and the partnership of Parsons/Worley and Halliburton KBR in Iraq oilfields, that switchboards made in Adelaide were ending up in Iraq (with certain people making certain amounts of profit, naturally.

The folks who work the production line have no idea where the components they assemble are destined for, and so draw their own conclusions. The sight of the occassional military uniform on the factory floor hasn't aided clarification.

I would love to see an inquiry into Mr Gerard's RB appointment, but have a feeling that it's unlikely given the political Pandora's Box that might manifest.

Life will be potentially less embarrassing for Howard, Costello, Downer, andd Hill (not to mention his predecessor Peter Reith) if their benefactor is removed from perceived connections to their party.

Perhaps Howard could set up a new campaign "Australian Made By Ripping Off Australian Taxpayers" of which they could award the chairmanship to their friend with no loss of impunity.

Margo: Hi Richard. Gerard is also on the Prime Minister's 'Community Business Partnership", which Howard set up in 1999 to squeeze out voluntary organisations (NGOs) he didn't like in favour of those he did. The partnership has been used to fund - without tender, naturally - neo-liberal 'research' by the Institute of Public Affairs recommending ways to stop NGOs getting access to government. Journo Paddy Manning wrote a chapter for my book on Howard's five pronged strategy to suppress or stop dissent from voluntary organisations. It's called 'Keeping democracy in its place'.

re: Costello burns Gerard candle at both ends

Innuendo is the cheapest form of condemnation. This slur on senior people in the ATO - the settlement with Gerard was allegedly by those people looking after their own backs - is backed by no evidence and seems to be predicated on the naive assumption that settlement of tax disputes is unusual.

Margo: The attack is on Peter Costello, Colin, for putting the ATO in this position in the first place.

re: Costello burns Gerard candle at both ends

Margo: If I had been a senior ATO officer dealing with the Gerard case I would regard the article as deeply offensive because it asserts, without evidence, that I have put my personal interests above my duty - that I have been dishonest.

Margo: If I was a senior ATO officer dealing with the Gerard case I'd regard as deeply offensive, or worse, my minister's decision to appoint someone who sought to defraud the taxpayer and mislead the ATO as a Reserve Bank director. This isn't about tricky lawyers finding loopholes in tax laws, this is about tax EVASION. This is about FRAUD. On a massive scale.

Costello has showed he is unethical. He clearly knew about the tax fraud saga, because he won't go near any question about what he knew. Why? Because that would open up a can of bloody worms. Who else round the Cabinet table knew? Howard? Downer? Hill? Minchin? If they did they're complicit in this outrage. If they didn't Costello would have to resign for not informing them. Costello stressed in Parliament yesterday that everyone in Cabinet supported his recommendation. Circling the wagons, eh? I wonder who suggested Gerard's name to Costello, hmmm? According to the Oz today, Gerard's been funding 10 percent of the South Australian Libs' budget for years. Has he bought himself a Party here?

Care to bet on whether Gerard will sue the Fin? I think not. And what is the story behind Carmody's careful letter clearing his PERSONAL tax affairs? There's a story behind that too, I'd wager.

re: Costello burns Gerard candle at both ends

Colin Martin, why are you at such pains to defend the indefensible? Care to declare your interests?

re: Costello burns Gerard candle at both ends

I have just finished watching ex Auditor General Tony Harris's analysis on the above appointment (7.30 Report). He was unequivocal in what he says - Mr Gerard should not have been appointed and it is up to him personally to resign.

But more important it displays what we can expect if Mr Costello assumes the PMs job, We can expect much of the same. Following in Howard's footsteps as a liar, Costello is now doing the same by professing that he knew nothing about Gerards company's troubles with the Taxation Dept on tax evasion. Congratulations Peter Costello you have joined John Howard in the liars club, what an honour to have bestowed upon you.

Margo: Danny, Costello has NOT said he knew nothing, indeed he's got out of his way to refuse to say whether or not he knew. You see, Gerard says Costello did know - and told him he knew before the appointment - and Gerard, Costello and Howard keep telling us, is an honourable man.

Costello has used every lawyer's trick in the book to avoid saying whether he knew, and he won't front top interviewers like Kerry O'Brien or Tony Jones who would test his avoidance skills for all to see. There can be only one conclusion, and that is that he did know. It is now up to journos to keep asking the question at every press conference he holds and every radio interview he does until he answers it. This is a big test for the media. Costello - and Howard - have treated Parliamentary questions with contempt, and there's only the media left to get the truth out of him on behalf of the Australian people.

I wrote in a comment this morning that I disagree with Peter Hartcher's assessment in the SMH that this will only wing Costello and that he can fix it all up by making an appropriate Reserve Bank appointment, due within weeks. This scandal strikes at the core of his credibility, and raises serious doubts about his integrity. And that of the Cabinet, if Cabinet knew. If it didn't know, then Costello should be sacked as Treasurer for failing to inform his colleagues before they ticked Gerard's appointment. My guess is that Costello, Howard and at least one or two of the South Australian Cabinet Ministers did know. After all, the Oz reported today that Gerard has provided more than 10 percent of the SA Libs' campaign funding for 15 years! Gerard is also a Howard favourite for government appointments, too.

It's rotten, Danny, that the guardian of the revenue on behalf of Australians would reward a man who defrauded taxpayers and misled the ATO with a Reserve Bank directorship. It means he's no guardian at all, of the revenue or of the reputation of Australia's most important financial institution, one which the people must trust. I reckon he, and perhaps in time if more comes out, the underbelly of the entire government, has been well and truly exposed on this one. The merger of government and corporate power is what defines fascism, according to Mussolini. We're not there yet, but we're getting closer all the time, uncomfortably close, as this total failure to put the public interest above Liberal Party favours to one of its biggest cash cows shows. If you've got my book, re-read Chapter 1, "Disclosing John Howard's elite by the skin of our teeth.' Howard's business guest list for the Bush barbecue reveals some of the real elite power behind his prime minstership. Frank Lowy, the retiring Reserve Bank Governor and big Liberal Party donor was invited but couldn't attend. Same with Ron Walker - former big time Liberal Party Treasurer and fundraiser recently appointed Chairman of Fairfax - who was said to be, until this week anyway, Costello's pick for the next director.

re: Costello burns Gerard candle at both ends

Colin Well someone in ATO, namely Carmody, did knowingly mislead someone in his ever so carefully worded letter. These guys are all out of the same cloth; Carmody has been doing Howard and Costello's bidding for the "big end of town" for years with tax. This is just one more example of how badly warped the system now is. Carmody should be ashamed of himself too. Costello should resign. But, I'll bet when you follow the money trail that it will in fact lead back to Howard...eventually. Costello only does what he's told too.

re: Costello burns Gerard candle at both ends

"Steal a little, and they'll throw you in jail, Steal a lot, and they'll make you a king" - Bob Dylan

Never were truer words said.

The Howard Government scapegoats disabled people on disability and soleparents pensions, and rewards corporate tax evaders. Go figure.

re: Costello burns Gerard candle at both ends

I indulged in lattes today with my 2 National Party friends and the talk about this situation was hot. Howard, Costello, and Peter Hartcher are missing the plot on Gerard. While I don't have a problem with the man and his fortune or his Liberal Party connections, I abhor his ATO situation. The PM & Treasurer must not understand how this resonates with every taxpaying worker, including Liberal and National Party members. If they are not in the process of asking him to resign of his own accord to save them the embarrasment, they deserve the firestorm heading their way.

re: Costello burns Gerard candle at both ends

Hello Margo. Point taken, Im sure we both agree that what this episode is showing us is that under Costello nothing will change, the lies and deceict will go on. Same team different captain.

re: Costello burns Gerard candle at both ends

Ah!! I get it now. The way that John Howard was going to 'keep interest rates low' was to stack the Reserve Bank with mates and Liberal Party backers! A masterstroke of genius!!

re: Costello burns Gerard candle at both ends

Gerard has also been a major sponsor of the SA State Theatre Company for the last few years, funding its under-25s audience development program. That says nothing about his tax affairs but a bit about whether he is "honourable".

re: Costello burns Gerard candle at both ends

Danny, sorry to question your statements but I have to ask. When did Peter Costelloe, or any other Party bound politician for that matter, tell the truth? He spent all yesterday avoiding the issue as much as he could and he is supposedly our next PM. More of what we already have suffered.

To me that is what the media should be reporting on, any instance where a Party politician has been proved to have told the truth, the whole truth and nothing but the truth. Why? Because it's so rare today and even when they may tell the truth the public cannot tell the difference any more. It would be a sensation that the public deserves to hear.

We continually see only one thing from our politicians, at all levels. That is self interest, twisting any information to present themselves and their party in a positive light and bald faced lies.

More independents please, and now!

re: Costello burns Gerard candle at both ends

"thinks Costello's observation that we are all "entitled to funnel our pay through a Caribbean tax haven will come as enormous comfort next time auditors arrive demanding receipts", from Wayne's wrap of today's news is most encouraging, no doubt the big tax rort in Sydney being investigated will take heart and more Liberal funds will flow into the NSW coffers. Nice way to get big business donations isn't it, or keep them coming?

Anyway, who is surprised by this government and its big business bed sharing partnership producing feral unfettered kids?

That bit about NGO control is just so typical of this lot and so annoying to those who prefer opennnesss and accountability. I note the wonderful amounts of money going to certain organised religions for their versions of community work and the resulting block of voters that politicians love to woo.

Spot on Margo about fascism and Mussolini. Indeed it is worrying to see how few at the time recognised how close they were to a fascist government in Italy and Germany, concentrating more on the common fear of communism terorists and economic progress and apparent improvements, funded as you know, mainly by the US banks. Quite a supressed scandal that was.

How close are we? With this silencing of dissent legislation I would say it is easy to impose whatever enabling rules wished, along with controlled diebold voting boxes and voila - a controlled democracy for an ever smaller elite of big business.

Why is the Murdoch media heavily running the Gerard scandal? Why, when it reflects so badly upon the integrity of Costello and the Liberal party and big end of town? Stories of such heavy Liberal hitters require authorisation from the top. Why not the Fairfax media? Certainly the reserve bank is important for the Sydney money direction and property businesses, especially with the local tax miscreants.

So Moriarty is Liberal leader. What could be more approriate? Sherlock, needed.

BTW, is threatening to shoot political party executives sedition or terrorism? Time for a hardrive ram raid methinks!

re: Costello burns Gerard candle at both ends

Regarding wether or not this will hurt the Prime Minister in waiting I sadly have to admit that I dont think it will.

After all wasn't it the Federal treasurer of the time involved in convincing the ASIC to allow FAI insurance to become publicly listed. We all now know how that eventually turned out. The treasurer became prime minister.

Kerri: Hi Allan, welcome aboard! Could you please use your surname also when posting comments, as per our Webdiary discussion guidelines. Cheers.

re: Costello burns Gerard candle at both ends

Dee Bayliss You asked me to declare my interests. They are exactly none. I have never worked in the ATO and know nobody working there now. I had never heard of Gerard until the AFR story and I've never met Costello. I just thought the Miner article was more about inflicting collateral damage than about going after Costello but Margo is her wisdom says I am wrong so I'll desist.

re: Costello burns Gerard candle at both ends

For me there is something truly delightful in this Gerard spectacle and it was captured by the Fin's front page photo with Howard looking like a weasel and behind is Costello looking ill. Howard is now tied to the mast of this disreputable ship and can't get off - if he chose to leave now his reputation would be of a rat deserting the party.

He can't pass the baton to Costello as he is tainted goods and that justifies Howard's abhorence at the thought of handing over to the Melbourne establishment after what they did to him in the Fraser years.

Abbott is as likely a successor as was Brutus.

There is really only one choice left in NSW and that is Turnbull. The thought of Howard handing over to Turnbull will make Howard puke. He is not alone there of course.

So there he is, tied to the mast of the good ship Ideologue and there is a distinct whiff of smoke in the air. And he will be there for some time to come as the whole damn thing turns to ash and ultimately the electorate chucks him out. Makes me feel fine.

re: Costello burns Gerard candle at both ends

The Liberal Party's hypocrisy struck me when I was listening to Costello on the ABC the other day. He kept going on about Gerard is innocent until proven guilty. The fact was he made a settlement and the charges were a little more serious than some misunderstood areas of tax law should have thrown some doubt on giving him such an important position. On the other hand the rat pack do nothing about Hicks who was held for years without charge in America.

As for future Prime Minister, no way. Howard has made it pretty clear that he is staying until he is carried out, and Costello is too spineless to ever seriously fight for the job. Even if Costello did challenge, who in the party would vote for him?

The next leader is either somebody who can rally the disaffected backbenchers (as well as some realists who can see the writing on the wall for the neo-liberalism).

re: Costello burns Gerard candle at both ends

If you were a wee bit cynical about this affair you might be forgiven for thinking that Howard set Costello up... consider.

re: Costello burns Gerard candle at both ends

It’s an intriguing phenomenon that, while capitalism can exist without fascism, fascism cannot exist without capitalism.

Fascism comes in all shapes and guises but it never comes without the embrace of capitalism. It also rarely comes without the embrace of any given nation’s upper classes. Old money would not like to be directly associated with fascism but will nonetheless support it. New money, as we see with Gerard, openly supports it.

Of course, these days it’s not called fascism. Very few will openly concede that they actually are fascists, indeed, most will vehemently deny it; they will simply laugh at the notion. They say that they don’t like dictatorships per se but they do like strong leaders that have a firm grip on things and they will ensure that that strong leader will stick around for as long as possible within the bounds of not going the full hog of having a real full-on dictatorship. Today’s fascist, in short, would never actually want to be seen as a fascist.

How things have changed. Between the wars in Europe, including Britain, when fascism was on the rise, most people that were fascists were quite happy to call themselves ‘Fascists’. They joined this or that Fascist Party. In fact it was really quite fashionable to be a ‘Fascist’ in the 1930s. Since they lost the war however, it has never been fashionable again. In fact to be called a fascist was – and still is – something of an insult. But that doesn’t mean that the concept has gone away. Every now and then it raises its head again. Several Latin American nations experienced fascist style governments including Brazil, Argentina, Bolivia and, of course, who can forget Chile. Spain went on for decades under Franco and Portugal didn’t fare much better under António Salazar. The Greeks had their juntas in the 1960s and the Croatians had Franjo Tudjman (yet another fascist that came from the left) in the 1990s. All, every one of them, were supported by their nation’s wealthiest people.

All, in the main, also had the support of their respective armed forces and security services whose upper ranks are usually filled with those who, just by the very nature of their work, have right-wing leanings generally even when the government of the day is left-wing.

Are we really on the road to fascism in Australia? The right-wing, of course, would deny it. Either that or simply ignore the question.

re: Costello burns Gerard candle at both ends

The topic for tomorrow's Advertiser opinion page is "Should Rob Gerard be removed from the Reserve Bank Board?"

It's far from unknown for letters to appear from around the country. Send your thoughts to debate@adv.newsltd.com.au.

I'm still ruminating on those defence files in the rubbish bin.

Some of the possibilities:

(a) Sombody has planted them there to create a stir (don't look at me... I'm not that creative);
(b) Somebody has been cleaning up around the factory;
(c) Somebody has been driving around the area working out relevant details of co-ordinating the landspace to future defence plans between Adelaide and Darwin.

The jury's still out. The importance in the third conjecture is that if any major defence/industry co-ordination arises, it will have involved substantial negotiations between other Ministries and Mr Gerard.

Around last Christmas the Territorian reported Gerard's hiring of the Ghan for New Years Eve, with extra first-class cars laid on, for a transcontinental party. It was anticipated that guests would fly into Adelaide to join the train, then fly out the country at the other end.

I believe, and I think Margo does to, that there is still much more to the Robert Gerard story than meets the eye.

re: Costello burns Gerard candle at both ends

Right.. now that you all know what businesses reside in the Adelaide suburb of Bowden, you should know that that it merges with it's equally tiny neighbour, Brompton:

"The Defence Department will try to find out how files outlining information about the State's defence bases were found in a public bin in Brompton." The Advertiser 28/8/05

We'll probably never hear the results of the inquiry otherwise, would the reason for sensitive documents, plans of S.A. Defence bases (including ammunition storage areas) ending up in a bin within a such a currently prominent locale

It may be a good time to ask the question in Federal Parliament. With Gerard's and the local council's (Charles Sturt, if you want to look it up) associations with KBR, and with components being manufactured here that are installed in defence facilities, the results of such an investigation should be made quickly available, so that no further confusion can arise.

Or it can wait, to emerge in the inquiry into Gerard's RB appointment

re: Costello burns Gerard candle at both ends

In agreement with Kevin Childs, on the Howard-Costello photo on front of Financial Review, Dec 1st. It's one for the archives.

If Richard Tonkin cares to part with $2.50, he can read a fine article on Mike Rann's strategic plan for SA, by Geoffrey Barker in Financial Review, Dec 2nd. (My copy is available for loan, to save diving into the dumpster.) Here's a taste:

With an eye to the next election, Rann recently released the second edition of the government's directory of major projects. It shows the number of projects has grown in a year from 140 to about 220, valued at more than $20 billion. Some projects are still only under consideration and represent hopes rather than achievements, but some big defence and mining projects are under way or are pending.

re: Costello burns Gerard candle at both ends

re: Costello burns Gerard candle at both ends

Poor Robert Gerard, imagine being the victim of scurrilous spin aimed at discrediting ones good name, it's outrageous, and after all this man has done for this country, all he has given. I tell you I really feel something for him. And his health has started to suffer too, real suffering mind, not the kind of fake suffering of those disability support pensioners sucking this county dry at couple of hundred a week.

Where do I send a sympathy card? It's just all so damned unfair.

re: Costello burns Gerard candle at both ends

Well who would have thought that this would happen so soon? I thought he would cling on for far longer considering he had the solid support of both Howard and Costello who both demonstrated their beliefs.

Beg for a penny from your master and they'll kick you in the teeth, steal from the city coffers and they'll pat you on the back for your enterprising spirit.

Hard to say how this will hurt both politicians as the public has a short memory.

re: Costello burns Gerard candle at both ends

This issue threatens the good name of honest politics. But, more seriously, it threatens the economic fabric of our society. Our governments must be active in pursuing good corporate governance, and appointments to regulatory agencies must be founded on transparency and merit. When shonks are elevated, on the basis of political favours, the sharks sense the opportunities, and move in for quick kills (Enron, HIH) The losers are, nearly always, little people.

I don't think Howard or Costello give a flying fruit-bat for the ethics of the situation, since their record is to keep scoring political points at all costs. Some people have trodden hard on this pair of misbegotten, and I expect the editorials and op-eds to have a long, hard purview of the whole rotten trail in this disgraceful episode.

The Financial Review today listed significant people of authority (including Henry Bosch and Bernie Fraser)in the realm of financial regulation, who expressed the need for firm action. Goodness know what others, less polite, have been saying. That Costello is dim enough to rely on Gerard's own undertaking is one thing, but for Howard to give the impression of using Costello's discomfort for his own pleasure, is the mark of a small-minded predator.

re: Costello burns Gerard candle at both ends

What chance the hand of Howard being behind the media focus on Gerard and Costello? What better way to put a potential contender back in his box - perhaps for good?

re: Costello burns Gerard candle at both ends

An issue that makes my blood boil in this grubby little saga is the dismissive comments that both Howard and Costello were making on the floor of the House the day the story broke along the lines of … Gerard (Oops sorry! Not Gerard but a company that he has some tenuous connection with.) had been in dispute with the ATO… and that this circumstance was no shame because everyone has a dispute with the ATO at sometime or another… Ho ho! Nudge nudge! Wink wink!

Well I don’t have a dispute with the ATO.

Strangely enough as a PAYE taxpayer, I believe it is my responsibility to pay my share of tax and receive in return politicians that serve the people honestly, roads that do not have pot holes, public hospitals and schools that provide a service equal to the private sector, social security that provides an adequate welfare payments in order that people do not have to beg on the streets or steal from their neighbour and a communication system that delivers equally to city and country alike.

Yeah I know! I am an odd little character who also believes in fairies at the bottom of the garden.

re: Costello burns Gerard candle at both ends

This whole affair, anyone got a catchy name for it?, raises two issues that need to be addressed for transparent and honest government in this country:

1: Government Appointments...
I've lost count of how many times John Howard, having made appointments to various government bodies and had them blow up in his face, in coming to the defence of these people says "so and so is a very good friend of mine" as if that automatically means they are pure and innocent.

If this isn't cronyism then I don't know what is. IMHO they should not be friends of his at all.

One thing I like about the US system of appointments and would like to see introduced here, is that they have PUBLIC hearings into the suitability of a person to be appointed to government positions. It is not perfect but it at least gets a lot of the dirty laundry out up front. If the President then chooses to push on with the appointment then he has no access to Howard’s favourite excuse of 'I wasn't told'.

2: Political donations
No matter how much Howard and Costello protest, it appears that this was a case of the favour being returned i.e. an appointment for the cash. Minchin wants to raise the non-disclosure limit massively above where it currently sits. No guesses as to which party that will favour.

So at the same time as the government is trying to nobble a source of funding for the ALP via it's IR legislation, it wants to expand the very mechanism which will ensure that it's own source of funds will increase. If Howard wants to appear even-handed then there should be a ban on all political donations by any company listed or unlisted and on the Unions. That way the primary source of funding for both parties is limited equally (fat chance that he would even consider it).

Donations by individuals would still be allowed but would have to be publicly declared regardless of the size of the donation. This means that both parties will have to get off their collective arses and work for their donations instead of having it fall in their laps and leaving them open to corruption.

AND the amount that can be claimed as a tax deduction should be very small and preferably non-existent.

Having watched some of this week's question time and watched it at various times over the years, there is probably a third item that should be added to this list:

A truly independent speaker. Everyone whinged when Leo McLeay (ALP) was the speaker but apart from Ian Sinclair, the clowns that have occupied this position over the course of the Howard governments term have made him look impartial. Their bias is at times so embarrassing that I am surprised some of the government's own members don't cringe at their rulings. What was it the other week: 20 opposition members ejected to the governments one in one day.

The Independents in the lower house to all intents and purposes serve no useful purpose in terms of the proceedings. They get to ask one question in a blue moon, get treated with disdain as Tony Windsor did this week when McGaurin contemptuously partly answered the question Windsor asked, and then spent the rest of his answer abusing the opposition.
Having asked their single question, if they don't like the answer, they then have to wait who knows how long to try and get the answer they want from the minister who hasn't bothered to even attempt to answer the question.
How about the Independents get rostered to serve as Speaker. This way, they can at least require the minister answer not just the opposition's questions but their own questions under threat of suspension from the house.

That would shake up a few ministers who simply don't answer any opposition question and rely on Dorothy Dixers to allow them to launch into attacks on the opposition.

Question Time is supposedly about keeping the Government accountable but you'd never know it from watching.

re: Costello burns Gerard candle at both ends

So, Rob Gerard Resigns on Friday from the Reserve Bank board. If it was so bad him being in that position what about he who named him there? But that would certainly be a first, a Howard government minister actually resigning for corruption or gross incompetence in their department.

Name one federal department without either having happened and then name one dept resignation. can name quite a few choice dip posts for such deeds.. bit weird really that people put up with all this.

Oh and before you put up your hand and say defence, try the now 7 billion dollars hole in the auditors report....,again. Put down so eloquently to new accounting practices, but really! How do we know it isn't in the Bahamas?
And next time we say that our company audits are out (esp by 6-8billion for ? 4yrs in a row!!! I wish eh?) due to "new accounting practices" to the board and share holders don't hold your breath for an understanding nod.(actually we may be yachting on our billions in the Cayman ISs before anyone was the wiser).

The economic rationalists have removed "accounting" from the lexicon when it comes to social and environmental consequences, politicians and big business money movements and executive salaries. Funny it still applies to the Reserve Bank. I expect that to be privatised to close that loop, eh?

ps why did Rumsfeld visit Adelaide? Check his shares? Special meeting with Stephan et al? More deals with Rann gov about using certain facilities?

pps Are they using depleted Uranium in the US military manoeuvres here? I have heard "yes" (but no official confirmation, nor denial)..And the intention to ramp up higher the rate and amount. I would like to hear a cast iron denial about this from Hill et al but even then....after the WMD fiasco...could one trust our government not to deceive us when monied and power interests are at stake?

Doesn't that make anyone angrrrry? One big nuclear dump, just like Iraq. Thanks allies. Who needs enemies? Just like the Brits and the Coffs Harbour fallout, and just don't breathe in when the wind blows that dust around. Alpha particles aren't healthy in lungs. Hope the Ghan has closable windows.

By the way Margot, have you thought of looking at that private city proposed by Hardie industries to be built at the end of the expressway on NSW? The concept is interesting.

re: Costello burns Gerard candle at both ends

Justin Wilshaw: "The average Joe, which make up 99%, of the population..."

What, average Janes are only 1% of the population? No wonder it's getting harder to pull these days.

re: Costello burns Gerard candle at both ends

I dont think this will hurt Costello. The average Joe, which make up 99%, of the population, don't latch on to stories such as this. It's just too boring. At the end of the day, interest rates and unemployment is low, Costello has enough political capital to come out of this.

Labor may pursue it and beat it up, the media may hold some interest. But its going nowhere.

re: Costello burns Gerard candle at both ends

G'day. Stand by for a hot Question Time. And ex-Treasury head and former Coalition MP John Stone details the decline in standards here. And see The Herald's John Garnaut at Gerard's gone but his ghost lingers. Thanks to The Daily Briefing for the links.

re: Costello burns Gerard candle at both ends

I didn't make myself clear- the position Mr Gerard was offered is Treasurer of the Liberal Party.

Wouldn't it have looked beautiful in the soon-to-come history books showing Robert as the funnel for US Republican funds into Australian political campaigns?

re: Costello burns Gerard candle at both ends

It just keeps getting better and better! Robert Gerard was asked to be Treasurer, but he thought his tax practices would embarras the government! extract from ABC Online:

Federal Treasurer Peter Costello says he has no knowledge of claims former Reserve Bank (RBA) board member Robert Gerard turned down a job as Liberal Party treasurer.

Channel Nine reports that Mr Gerard once turned down an offer from Ron Walker to become the party treasurer Mr Walker stepped aside.

The report alleges Mr Gerard told Mr Walker his tax affairs could embarrass the Liberal Party.

Labor's Wayne Swan says the report shows Mr Costello must have also known about Mr Gerard's tax problems.

"As you would be aware Mr Walker is a very senior Liberal from Victoria, that is where Mr Costello comes from," he said.

"Mr Walker has been very close to Mr Howard and Mr Costello, it simply beggars belief that the Treasurer did not know about Mr Gerard's tax problem.

I was also interested tonight to read how Gerard was named 2004 Australian Entrepeneur of the Year, the judges having proclaimed that "Robert has so much energy, he drags everyone along with him!"

I wonder if Mr Gerard dragged the judges along four weeks later for his transcontinental train party? He certainly is dragging Treasurer Pete downwards.

re: Costello burns Gerard candle at both ends

Richard, that link is probably another Adelaide entity through Halliburton... but they may well be related.

re: Costello burns Gerard candle at both ends

How long will it take for the fur to fly? Costello obviously isn't in this by himself. See here.

What a setup job this was!

re: Costello burns Gerard candle at both ends

This little band of thieves sure does stick together ... now this from Abbott (and Costello...) here

"The cabinet took collective responsibility for the appointment of Robert Gerard to the Reserve Bank board, Health Minister Tony Abbott says."

but wait for it...the REAL bad guys are Labor...go figure.

re: Costello burns Gerard candle at both ends

Hi Margo, thought this might help if you think there's still digging.

It's an spreadsheet file I put together - available here (.xls 28kb)

It's a breakdown of the Gerard donations from http://fadar.aec.gov.au/ site as far back as it goes (1999).

The 2nd sheet is the timeline along with the key SA liberal events that happened in that time.  Including the "Catch Tim" donation (State Bank GM -
Tim Marcus-Clarke) that unravelled to find Gerard at the end of it.

Dean Brown, Rob Kerrin were mates of RG. John Olsen and Alexander Downer are not.  Check out a little dirty laundry in Adelaide for the full list.

The figures don't go back to 1996 when Brown lost the leadership to Olsen - maybe someone can find the numbers.

But it's clear that the donations came think and fast in the last 6 years and certainly peaked in the 2002 state elections.

Dunno if it helps unravel this, but as Deep Throat said...

re: Costello burns Gerard candle at both ends

The very best thing about the scandal is that it has the potential to rip the Federal Liberal Party to pieces, even more so than the damage that has been inflicted on the State machine in NSW. And what's even better, it may suck Howard in whether he likes it or not. It has the potential to fester either right through until the next election, or a successful leadership challenge, or if Howard decides to go of his own free will.

That was a very telling piece of political theatre from Costello in Parliament yesterday afternoon, the sort of thing that makes your jaw drop, hit the ground and bounce. I think there were two messages from Costello to Howard AND his supporters in it. The first was "don't try and wash your hands of it and leave me in the lurch", and the second was "I have had a gutful of you and your acolytes and I am not going to cop it anymore". I would have loved to have been a fly on the wall in Costello's living room when Howard made those remarks on the Insiders.

The big question now remains, will this be the smelling salts that Costello needed to make him go after Howard?

I have got to say I think the only political commentator to read this correctly so far has been Alan Ramsey. The appointment and ESPECIALLY Gerard's resignation absolutely reek of the Rodent's handiwork. And the story of the South Australian Liberal's infighting was excellent by way of background to the main story.

re: Costello burns Gerard candle at both ends

Addition... and change back to their old directions. The "publicised" version of the story shows a Cabinet defending itself from apparently unsubstantiated allegations.

Damage control?

re: Costello burns Gerard candle at both ends

After a week of attempting to protect Mr Gerard's reputation by "burying" the story as much as possible, and presenting supportive editorials, The Adelaide Advertiser is dancing to a different tune now that Treasurer Pete's stance is looking shakier.


A STRUGGLING Peter Costello was unable today to explain why his office asked the tax commissioner about businessman Robert Gerard before he was appointed to the Reserve Bank board.

The Treasurer could only say his staff member had done the right thing to check with Michael Carmody over Mr Gerard's tax affairs, even though he could not say whether the same checks were done for other Reserve Bank board members.

It came as Labor said Mr Costello was not fit to succeed John Howard as prime minister because of the way he had misled the Australian public over his handling the Gerard affair.

It follows a week of sustained pressure on Mr Costello over how he came to appoint Mr Gerard, a Liberal Party donor, to the board of the nation's central bank.

At the time in March 2003, Mr Gerard denied having any personal tax issues, despite being in a 14-year dispute with the tax office.

The winds of Adelaide are changing direction.

re: Costello burns Gerard candle at both ends

Russell Darrioch I agree. Allan Ramsay's SMH piece was close to the mark, in noting that all three prospective sites for the dump are along the trainline. This is unsuprising... given that KBR were the consultants for ARPANSA in the Woomera dump proposed by SA Premier Rann, in areas including probability stats of a containment breach due to missile attack, it would be likely that another set of experts would be called in to do the same job for new site possibilities.

Where Gerard fits in is difficult to say. All I know for certain is that with all of this activity along the Hallirailway, an industrial area at one terminus is of signifigant potential value, especially if products can be turned onto the Port Adelaide line, down to the Warship precinct, without going too close to the city.

One thread of thought I've been running through the Advertiser letters pages (before defence construction as a war issue was editorially banned) and incidentally the one I received a massive response to, was the concept that with M-1 Abrahams tank refurbishment facilities coming to town, Adelaide might have an ongoing industry refurbishing the things. Mr Hill did say last year that our M-1's were part of an international fleet didn't he? He did.. my first ever posting on Webdiary. We've dredged the harbour deep enough to allow the Armored Task Force Ships in, Rann has proposed the Mitsubish car factory as a refurbishment facility, now all we need is a way to, after replacing it with an Australian invented lead based coating, dispose of the depleted uranium from the tanks from the Middle East.

If the tanks are brought up from Port Adelaide on the railway, then across to the other side of town to the refurbishment plant, the locals aren't going to take kindly to uraniam being trundled through the heart of the city. However, if it's stripped from the tanks on the northern side of town, then carted up the track to the dump, everyone will be happy.

I don't think the tanks or D.U. will be stored at Gerard's factory at Bowden/Brompton... KBR's new road to allow fast acces from the Port to the Northern Defence Area is almost complete.. the D.U. could go straight onto the train without coming any further in. I could envisage Gerardville becoming a "spare-parts storage facility, a components centre, an inter-track junction..

I know what some folks think of my odd ideas. However, having been proved correct today on a three-month-old guess that the JORN radar system was to be used for the U.S. Missile Shield (see posting on Halliburton's Adelaide) I'll a little more confident of my hunches.

The hunch I've had for two years is that Robert Gerard's activites are integral to the militarisation of Adelaide. This relates to my other hunch that Adelaide is the centre of an international foreign-aid finance loophole that has the potential of becoming another Watergate.

re: Costello burns Gerard candle at both ends

"If you have any inquiries into the proceedings of the tax office I suggest you refer them to the tax office or to the taxation commissioner."

Seage. He wouldn't be able to tell you much at all because he would be subject to the secrecy provisions of the taxation act.

A retired senior tax officer says that the matter should have been referred to the DPP but that he can say no more as, although retired, he's still subject to the secrecy provisions of the taxation act. This is much of a tune as Chris Searle can whistleblow, and it's a strong and stirring lament.

There was no lamenting on the night of John Howard's re-election at Gerard's private function room in Bowden, as his guests, members of the SA Liberal Party, cheered the results, and their signifigance. As a party insider said at the time, "Every party has eliminated it's Left."

Two weeks ago, former Premier Dean Brown announced he would not contest the seat of Finnis at the next election. The "capital" of Finnis is the tourist town of Victor Harbour, and the region has been booming with development ahead of speculation of a new four-lane highway to the area. Immediately after the announcement, Brown retired. The rumour for twelve months back was that responsibility for the road's construction is in the hands of Halliburton.

Former Premier John Olsen had a couple of quiet paragraphs in the Advertiser today, announcing his continual journey promoting South Australia in the US. He's just been appointed Consul-General to New York. Olsen, Premier when Halliburton CEO Dick Cheney visited Australia in '97, was responsible for selling SA's water to supply to SA powerbroker Malcolm Kinnaird, creator of the company that became Halliburton/KBR Australia, and acting as its consultant when his bid, placed several hours after closing time, was accepted amid accusations of government and industrial expionage. The 'Tiser today notes Olsen's significant contribution to promoting South Australia to the US. If you're looking for Judas, he's out in the olive garden, puckering up.

Have you read Alan Ramsay's SMH piece yet? There's a paragraph here that's ring bells:

"A leaked [internal party] memo from Senator Minchin [to South Australian party officials] states: 'In my eight years as state director [until elected a senator in 1993] I never knew the existence of, let alone met, Mr Bill Henderson, whom we now know apparently obtained the Moriki and Catch Tim donations for the party. Mr Henderson was named as the conduit for both donations." Yes, but the conduit from whom?

The question Ramsay raises here is a biggie. Gerard, concentrating on financing the expansion of his empire, was probably beginning to show the finiancial stretch-marks that lead to his "globalisation". Was it Gerard's money that flowed through Catch Tim and other fronts, or was he only pretending?

At any rate, with Kinnaird working the corporate end, and Robert Gerard manipulating the Liberal Party, South Australia never stood a chance. Cheney and Rumsfeld's wishes were fulfilled.

The ironic thing about the raising of the supicious nature of relationships between Gerard and Costello is that what the exercise has ultimately achieved is for John Howard to get into temporal firing-range of the next election. Why has this maintaining the PM's international position, over the past recent months, "suddenly" become a necessity?

The phrase, "Think Global, Act Local," has taken on a whole new meaning in the New American Century.

re: Costello burns Gerard candle at both ends

Hey Richard, when you talk about Gerard's private function rooms, do you mean the old pub in the shadow of the bridge the workers used to flock to, just across he way from the railway station, that they did up?

Live just off of Gibson Street myself and seem to remember you saying you are connected with the Guv Hindmarsh; Adelaide's answer to the "Basement", of ABC fame.

Fascinated the other day when you reckoned they might be on the verge of closing the factories down - a lot of vulnerable people could be looking down the gun if this is true. Miserable bastards!

Note your comments re Fleurieu: they are really keen on buggering it up, last fifteen years or so. Is a sort of "sacred site" for me - a place where my late lady and I used to go for the peace, beauty and quiet. Explains why I tend to keep away (apart from not owning a car), I hang onto the idealised memories.

re: Costello burns Gerard candle at both ends

Amazing Paul Walter that we walk the same streets (I too being car-less) and if you go down to the Gov on a Friday night have a beer with the fiddler.

The stories of our local Clipsal factory's impending closure have been around for a while now, and what I'm hearing is that it's a fairly piecemeal process.. section no longer being used except for storage, etc.

Next time you catch the train, have a look at those fences on the adjoining blocks. Why did Gerard have them put up, and what are his intentions for that piece of space? Given that he already owns (literally) half of the adjoining street, I'd like to know what will happen when all of that carpark area for Clipsal workers' cars suddenly becomes available for other uses.

re: Costello burns Gerard candle at both ends

Richard, just caught up with this. I always thought the fences were maybe just about protecting the cars in the carparks (bit extreme, I thought...). They are certainly letting a lot of the old houses they bought go to rack and ruin, becoming eyesores, and the area in general. You could be right, Richard.

I originally come from Elizabeth, and they let Elizabeth North go like that before they tried to turn it into Rosewood Park.

They seem to be having a right old bugger round with Bowden station, too.

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