Put a crook in charge at the bank?

Australia now has its very own pay-to-play political drama playing out. It’s hardly a new phenomena downunder, but is resonant with the current scandals surfacing in the US.

The basic scenario is: Local industrialist make good; donates wads of cash to major political parties; falls foul of the taxman over bags of bucks sent offshore for cleansing; is appointed to the Reserve Bank board as a thank you.

The Liberal Party, Prime Minister Howard’s party, had already offered Industrialist, Robert Gerard, position as the party’s treasurer. Gerard, obviously cognizant with ethical sensibilities, declined the position, citing his $150million battle with the Australian Taxation Office.

Not to worry young Robert, came the reply. We have a pozzie on the Reserve that should suit nicely. “No worries me, mate,” was Robert’s warm response as he grabbed his new seat.

Odd isn’t it? Considered too shady to be party treasurer, but just fine to sit in on the country’s central bank board. Perhaps it was thought that Gerard could add some experience in the field of tax free investment. Well, fairly tax free. The Tax office settled for a good deal less than it claimed he owed them.

One of Australia’s most respected commentators, Alan Ramsay, takes this story far deeper than the Reserve Bank fiasco; deep into the political life of his home state, South Australia – A little dirty laundry in Adelaide It is a fascinating look at the way its done elsewhere.

Anyway, our friend Robert is exposed as ethically challenged, but the government are wary of responding to the charges and looking bad in the process. So they defend the guy, tell us why he’s just the man for this job, and make themselves look worse.

“He is a major employer, a major manufacturer,” Costello told parliament.” He brings a great deal of understanding about the Australian manufacturing industry to the Reserve Bank board.”

Actually, suggestion has it that they didn’t really know how to dump him anyway. This is the government rewriting workplace laws so employers can dump employees at will, and they were worried he’d attack them if they sacked him.

They didn’t have much to worry about on that score. Gerard was appointed to the board in March 2003, and had the worst attendance record of any board member in the year ending June 30, 2005, going to seven of the 11 meetings, according to the Reserve Bank of Australia's annual report. Under the Boards own rules he could have been dumped for non attendance alone.

Well they finally give him his marching orders and things really take a turn for the worse, becoming a regular French farce. You see there are sub plots, even more sub plots than in the above quoted Alan Ramsay story.

For a start, Treasurer Peter Costello wants Prime Minister John Howard’s job. He’s been waiting in the wings making impatient noises and irritating the PM. So said PM says, rather publicly, that appointing Gerard was all Costello’s fault.

A not surprisingly upset Peter Costello told Parliament how the PM had enthusiastically embraced the idea. "I have never seen such an enthusiastic response in all my life, in all my life". He chortled to the House.

So on top of the appointment of a crooked businessman to the central bank board, we now have to watch as the Prime Minister and his heir apparent go at it hammer and tongs.
Shadow treasurer Wayne Swan said the finger pointing suggested the affair had become a major leadership issue in the Liberal Party.

"We saw back-biting and finger pointing at its highest levels of the Government, and we saw it for all to see on the floor of the Parliament," he said.

Happy Christmas Australia! Just think, it could be worse, Canada was forced to a Christmas election, you’ll get a break while these combatants go off to the beach, or wherever summering pollies go.