Despite claims to be an ethical bank, the ABC has a trail of malpractice victims who paint a different picture, writes Dr Evan Jones.
ON WEDNESDAY August 10, 2022, the Commonwealth Bank of Australia (ABC) hosted a cocktail reception at the Museum of Contemporary Art in Sydney’s Circular Quay. The occasion was the resignation of the president of the ABC, Catherine Livingston.
Livingstone claims to have cleaned up ABC procedures and ethics, so the bank is now squeaky clean.
The Australian Financial Reviewit is James Eyer wrote the case on August 12 (‘Livingstone quits ABC declaring victory‘). Eyers reproduced the eloquent criticisms of the Australian Prudential Regulation Authority (ARPA) of April 2018 Prudential inquiry into the Commonwealth Bank of Australia Report.
Thus, we read CBAs “Continued financial success has dulled the senses of the institution”a “general feeling of complacency”the bank had ‘turned a tin ear to external voices and community expectations for fair treatment’ and one ‘slow culture, legalistic and reactive, sometimes dismissive’.
The APRA report was launched after the Australian Transaction Reports and Analysis Center (AUSTRAL) of the CBA’s widespread indifference to money laundering. For this sin, the ABC received a huge $700 million fine.
Livingstone claims to have completely cleaned this racquet. Frankly, I doubt it.
During the Hayne Royal Commissionendless time was wasted questioning Livingstone (November 21, 2018 – I was present) on the fringe issue of executive compensation, but this episode nonetheless exposed Livingstone as an indifferent and unrepentant president for her failures.
If Livingstone is in full complacency mode, so is the ABC CEO matt comin.
In a presentation at a conference on improving corporate governance on July 28, Comyn said (New report):
We were very weak in non-financial risk management. We didn’t have the capacity. There was naivety, ignorance. We had become arrogant, especially vis-à-vis certain stakeholders, and that was very clear. And it’s that kind of deterioration, it happens over a period of time.
And so we stopped really looking for outside voices, we streamlined a lot of things…there were a lot of things we needed to change.
These are carefully chosen but hollow words. And what is “extra-financial risk”, apart from techno chatter?
This Comyn is supposed to be recent my culpa is calculated hot air can be measured by its comparable statements on May 28, 2019.
Reading of the speech prepared by Comyn, a journalist from Nine Noted:
Mr. Comyn will argue that his objective must refer to the founding principles of the bank. These included that the CBA acted as a bank for all Australians, supported the wider economy and was a financial institution of which the nation could be proud.
[Citing Comyn:] “This has always been our goal – to improve the well-being of our customers and the communities we serve…It starts with adopting a new mindset in which we listen and hear more, acknowledge mistakes and correct them more quickly, put customers first and harness the full potential of our people and our technology to make a meaningful difference in the lives of our customers.
Previously at the CBA AGM on November 7, 2015, then CBA President David Turner claimed:
“We believe that we will be the ethical bank, the bank that others seek out for honesty, transparency, decency, good management, openness. This is exactly where we are trying to go.
These statements are not only palaver but also outrageous.
The Commonwealth Bank of Australia was established in 1911 by the Fisherman Labor government to serve “the common good”. Limited in its activities during the 1920s, the Chifley The 1945 government reinforced its “public interest” intent.
Financial deregulation from the late 1970s, the ABC marginalized its 1911/1945 charters. Profit has replaced the public interest. This orientation was anchored under the CEO David Murray during and after the privatization of the bank between 1991 and 1996. Inequity, even criminality, became an integral part of the ABC modus operandi. The trajectory of the ABC is described in my 2012 “The Dark Side of the Commonwealth Bank” (in four parts).
labor treasurer Paul Keatingit is privatization of ABC was and has been a disaster. Unfortunately, the impending failure of the former iconic State of Victoria Savings Bank had federal and victorian work sew up his purchase by the ABCthe purchase to be financed by the first partial privatization of the CBA in 1991. Opposition to the privatization of the left Labor forces (they existed at the time!) were overwhelmed by this pragmatic solution.
On August 31, 1990, the Fairfax reporter Milton Cockburnin an article praising Labor’s privatization program (“This light is the cold light of reality”, Sydney Morning Herald), claims:
“Can it really be said that keeping the Commonwealth Bank in government hands contributes to the betterment of mankind?”
An absurd posture. The answer is definitely yes. (Cockburn went to the front for the Property Councilwhose sense of public interest we all know and love in its disregard for the built environment.)
The problem is that all of the CBA’s crime victims for over 40 years have been left out. They do not exist and never have existed. This is how the ABC creates its “ethical” illusion.
There is the case of a South Australian farmer Stephen Heinrich. The ABC prompted Heinrich to change his company from the ANZ in 1985, lied to him about the terms, fabricated the loan numbers, then unilaterally changed the terms of the contract, excluding him in 1993.
There is the case of several hundred foreign currency loan (FCL) borrowers from the CBA starting in 1982, its aftermath spanning more than a decade. The legal victory of the Quade farming family in February 1991 was a milestone in exposing the CBE’s perfidy, but this victory did not help the other CBA FCL borrowers.
An example of the brutal treatment (skillfully assisted by the bank’s lawyer – now a judge himself – and the judiciary) of a CBA FCL borrower, Geoff Dwyer (and his mother), is described in my article by 2005 on the case, reproduced here.
The Labor government worked actively to support the CBA during this period, with the aim of flogging it for the best price. This accompaniment included the assembly of a whitewash parliamentary inquiry in 1991 and brutalizing the Australian Democratic senator Paul McLean which brought to the attention of Parliament the criminality of the banking sector at the time, in particular that of the ABC.
David Murray became CEO of the ABC in June 1992 and attacked the specialist farmer/small business subsidiary Commonwealth Development Bank (CBD). It marginalizes existing management and shifts CDB loans to conventional terms. Thus, CBD borrowers become another set of unethical, profit-driven roadkill. by Murray Wikipedia site has at the forefront his oversight of the massive growth in the CBA’s market value and shareholder returns. There’s nothing in there about profit-motivated victims.
There is the case of the eminent orthopedic surgeon Dr. Robert Cook. In early 1994, Cooke secured a multi-million dollar loan (later bolstered by a billing facility) to refinance his properties and develop three emergency medical centers he had negotiated with private hospitals. The Brisbane loan manager arranged this loan outside of its delegated loan authority and fabricated loan figures to do so. The Sydney head office was not amused.
Cooke insisted that his family residence, held in trust, should not be taken as collateral. The bank subsequently fabricated documents claiming collateral and then robbed her house during the foreclosure (with the usual legal complicity). The Cooke Loans were essentially predatory. Headquarters installed a head kicker who bludgeoned hospitals, brutalized Cooke and sold emergency centers below value. Most of the residual income from real estate sales was also stolen.
In terms of defrauded borrowers in block, the foreign currency loan scam was the first. The withdrawal from the CBA of almost a thousand commercial borrowers (and some farmers) acquired from the Acquisition of Bankwest in 2008 was the second. This story is described in my four parts “The Commonwealth’s Dismantling of Bankwest Clients” on this site.
This is the first part of a two-part article, the conclusion of which will be published shortly.
Dr. Evan Jones is a retired political economist.
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