Hansard – The National Crime Authority

Operation Albert

  JOINT COMMITTEE ON THE NATIONAL CRIME AUTHORITY – 08/10/97 – Evaluation of the National Crime Authority The testimony of Garry Livermore from the NCA can be found here. Mr Livermore Commenced his testimony to the Committee by stating :

“In 1986, Lord Roskill, in England, chaired the fraud trials committee and prepared a report. The very start of that report reads as follows:

“The public no longer believes that the legal system . . . is capable of bringing the perpetrators of serious frauds expeditiously and effectively to book. The overwhelming weight of evidence laid before us suggests that the public is right. In relation to such crimes, and to the skilful and determined criminals who commit them, the present legal system is archaic, cumbersome and unreliable. At every stage . . . the present arrangements offer an open invitation to blatant delay and abuse. While petty frauds, clumsily committed, are likely to be detected and punished, it is all too likely that the largest and most cleverly executed crimes have escaped unpunished.”

Unfortunately, that is what has happened in the case of Mr Elliott and his co-accused. That is not just my opinion. I refer the committee to the decision of the Court of Appeal last week in the judgement of Mr Justice Brooking, where he made comment that it is cases such as the instant case, Mr Elliott’s case, that bring the criminal justice system into disrepute.”

Mr Livermore continued:

Mr Chairman, I attended the Carlton football match at Optus Oval the Saturday after Mr Justice Vincent’s ruling throwing out all the evidence in the case. I sat down and listened to Mr Elliott tell the crowd, roar to the crowd, in the words of Ted Whitten, `He had stuck it right up the NCA.’ He had not done that at all. What he had done was stick it right up the system and he stuck it up you, Mr Chairman, and every law-abiding member of the Australian community.

In relation to the foreign exchange transactions with the disgraced New Zealand Business Man, Allen Hawkins, Mr Livermore stated:

“The evidence against them was overwhelming, and it was overwhelming without Ken Jarrett. The brief had been prepared without him. The DPP had agreed to prosecute the matter without him. With him, when he decided to plead guilty and tell the truth, if the evidence had of been led then the result was inevitable. All the NCA wanted to do, and all the DPP wanted to do, was to lead the evidence.”

Mr Livermore testified:

The authority effectively changed its priorities and turned away from white-collar crime and that had a dramatic impact upon the support that the NCA was able to give to the prosecutor in the Elliott case.

 

Operation Alice

Mr Livermore then gave testimony into other investigations of the NCA into the affairs of the senior executives of Elders IXl Limited.

Yes. The first was known as «Operation» Alice. It has also been known as the convertible bonds investigation. In 1986, when BHP was under threat from Robert Holmes a Court, a parcel of convertible bonds was sold to BHP as part of that transaction. There had been speculation in the marketplace that Mr Elliott and other directors of Elders were the beneficial owners of those convertible bonds and the NCSC conducted an investigation into it and effectively hit a brick wall during that investigation. The Attorney-General’s office made a number of mutual assistance requests to Switzerland to gather evidence in respect of that matter. It is the matter that Ken Jarrett pleaded guilty to, a breach of his duty as a director of Elders, and he acknowledged in pleading guilty that he and Mr Elliott and Mr Scanlon were the beneficial owners of these convertible bonds. The sale of those convertible bonds reaped them a profit of around $70 million-odd

The NCA, by the time I had left, was in possession of substantial evidence corroborating everything that Mr Jarrett had said about that convertible bonds transaction, namely, that from the outset of the issue of those bonds Mr Elliott, Mr Scanlon and Richard Weisener in Monaco were the controllers, the beneficial owners, of those bonds and that quite sophisticated financing structures were put in place that effectively moved the credit risk for the borrowers of the money to buy the bonds to Elders—effectively moved the credit risk to Elders—thereby being able to keep secret, if you like, the ultimate beneficial owners of the bonds.

Mr Jarrett told us that when the bonds were sold and the profits were distributed among Mr Weisener, Elliott, Scanlon and himself the profits were then deposited in nominee Swiss bank accounts with a bank called Bank Cantrade in Zurich—pretty aptly named. The NCA is in possession of documents showing, as Mr Jarrett said, money coming out of Elliott and Scanlon controlled bank accounts with Bank Cantrade through Hong Kong and back into Australia as part of the equity that they needed.

Mr Livermore continued, making mention of the attempted privatisation of Elder IXL Limited:

The convertible bonds matter: the NCA is in possession of material confirming what Ken Jarrett said about the money coming from these Bank Cantrade accounts of Scanlon and Elliott into Australia as the equity they needed for the Harlin transaction, the attempted privatisation of Elders.

We also took evidence in Zurich. I was present when a man named Peter Stussi, who was an account manager within the Swiss bank, Bank Cantrade, was questioned by the chief magistrate of Zurich in relation to bank accounts held by Bank Cantrade where Elliott and Scanlon were the beneficial owners of those accounts.

Importantly, Ken Jarrett told us that, after the profits of the sale of the bonds were deposited into these bank accounts, the nominee structure that had been in place was changed. There were just nominee names that operated the accounts and they had fictitious directors. Liechtenstein foundations and other jurisdictional ploys were put in the way to prevent the beneficial owners being identified. Jarrett told us that in 1986 the structure changed, and Peter Stussi confirmed that. He remembered Mr Elliott and Mr Scanlon going to Zurich on a number of occasions to discuss the operations of the accounts.

 
Testimony on the 23 June 1997 can be found here.

Mr Sercombe one of the witnesses in reply to comments made by Peter Scanlon stated:

“It seems to me that you are also indicating that there is some political motivation in the way this matter unfolded. I would like to go back, briefly, to the very origin of this matter which, as far as I am aware, was a letter from Mr Bosch, the then chairman of the National Securities Commission, to the then chairman of the NCA, where he said, amongst other things:

We have been concerned about the way in which some directors of Elders IXL have gained effective control of one of Australia’s major companies. It appears that there may have been breaches of the Companies legislation and the Companies (Acquisition of Shares) legislation and possibly State Crimes Acts.

He went on to say that they have been investigating these matters and that:

. . . we had come to the conclusion that while there was sufficient evidence to believe that offences may have been committed, substantial further work was required before it would be appropriate to institute legal proceedings. In the brief that was prepared after that by the NCA to the Attorney-General, they came to the following conclusion:

In summary, the circumstances revealed by the information held by the Authority . . . suggest substantial planning and organization by those involved in respect of the relevant criminal activities herein referred to involving the use of sophisticated methods and techniques to camouflage the illegal activities in a manner calculated to defeat ordinary police methods of investigation.

What I would like your response on, Mr Scanlon, is against the background of that advice from Mr Bosch–the view presented to the Attorney-General that there could be criminal activity that was seeking to be camouflaged and therefore not responsive to normal police methods of investigation–whether you would think in those sorts of circumstances it would be appropriate for a law enforcement body to want to have a closer look.

I come back to the very obvious point that has been made: in any sense neither you nor any of your colleagues, co-accused, can be anything other than regarded as innocent because you have been acquitted, but what this committee has to do is to form a view about the reasonableness of the NCA’s actions. I would suggest to you that, faced with Bosch’s comments to Faris and faced with the results of their preliminary investigations, they had no alternative but to proceed with an investigation, and to suggest that it is politically motivated does not seem to me to square with the facts.

Testimony on 11 June 1997 can be found here.  

One of the witnesses Mr Cleeland stated:

“It is an unfortunate set of circumstances perhaps that it should be Ron Merkel as a Federal Court judge and Vincent as a Supreme Court judge who have both in similar terms ruled against the NCA and their power to draw references. Maybe it is just a coincidence that Robert Richter was briefed for Elliott. One can say no more than that because, as I said, I have nothing but respect for them all. I believe them to be people of integrity. But I believe it to be most unfortunate that a judge whose opinion on the NCA is known, a judge who detests the royal commission powers of the NCA, was the judge who exercised his discretion in the way he did. I find that worrying.”
Senator Conroy on a matter of Public Interest in the Senate on 29 September 1999 can be found here.  
So it is clear from his evidence that John Elliott committed himself to two foreign exchange transactions; that he knew all about them; and that he said they were legitimate transactions. When he was questioned by the Elders auditors—again these are public documents now—he defended these transactions. He said they were legitimate and demanded that they be accounted for in the Elders accounts in the way he described. After the NCA exposed the evidence as a pack of lies, Elliott left the court following the Vincent ruling and said that: `Of course they were fraudulent, but we did not know anything about them’. John Elliott did not tell the truth when he appeared before the NCA under oath. He did not tell the truth after the Vincent judgment and now he has admitted in his seventh admitted statement of claim that the H fee was a sham. He has perjured himself. The Prime Minister and the Attorney-General need to ensure that the NCA is adequately resourced so that a brief can be prepared for the DPP and the matter brought before the courts as soon as possible. The Victorian electorate showed on 18 September that the days of using government to protect mates are over. The only question remaining is whether John Elliott is entitled to naming rights for his private prison cell, which he deserves. If he does not want to end up there, Chris Skase has a spare room for him in Majorca.

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