Westpac Scandal About To Blow

Westpac Goes Slow - Fear Of Compensation Clouding Hartzer's Judgement

Bank investigator Evan Jones is worried that post election bankers maybe cooling down a little on compensating victims of misconduct. Here he turns up the heat on Westpac CEO Brian Hartzer who has inherited some dirty laundry that requires some long overdue ..... laundering.

Westpac has kept its own sins relatively under the radar compared to those of the CBA and NAB, which relative lack of publicity has helped that these sins remain unacknowledged and thus uncompensated. Bizarrely, Westpac is investing considerable resources in its Customer Advocate section, headed by Adrian Ahern and Carolyn McCann, but to date nothing of substance appears to have been forthcoming for the victims.

Notable are the cases of Westpac victims farmer Colin Uebergang and developer Patrick Hayes. Both of these cases are distinguished by their criminal dimensions.

Uebergang’s story is briefly told in his pamphlet titled Banking Criminality of June 2018. Westpac was broke in 1990 and undercapitalised, given the combined impact of massive losses from 1980s intemperate lending and the pressures of Basel I for increased capital adequacy ratios introduced in 1988. Westpac, like other banks (definitely including the ANZ) decided to go after some large-scale borrowers (especially farmers with juicy assets) to help save its skin.

Westpac impaired Uebergang’s profitable operations (involving organic wheat and tea-tree oil) as bad and doubtful and then sent in corrupt receivers in 1991, the latter proceeding to destroy its operations and plunder what was left. With Uebergang gaining successful stalling operations in court, a conspiracy of Westpac, the receiver and customer Uncle Toby arranged in 1993 to have Uebergang indicted on a trumped-up charge. The associate receiver was heard to have stated in 1993: ‘It was recommended to the bank to place criminal charges on Uebergang, as this would stop him from surfacing again’. Thus a fraudulent default under CEO Stuart Fowler was extended in its criminality under CEO Bob Joss. Uebergang was gaoled by Boyce J for two years in late 1997. Westpac’s amenable law firm in the operation was the Brisbane establishment firm Feez Ruthning (known to its detractors as Fees Ruthless). His sentence was overturned unanimously on appeal five months later. Westpac consistently denied document discovery (with assistance by Queensland police who conveniently lost relevant material) and has done so to this day.

Developer Patrick Hayes was seeking accommodation for a commercial development and was introduced to Westpac in early 2007. He was forced by Westpac business bankers to form a joint venture with Mario Girardo (also here), a person he discovered some years later to have long been engaged in criminal activities with Westpac staff since 2003.

Westpac bank managers had been handing over fraudulent loans to Girardo for dodgy deals since 2004, even given Girardo’s previous unsavoury record (NAB and ANZ were also at certain periods involved in comparable scams, essentially the same personnel moving between banks). Girardo was belatedly taken down and bankrupted by Westpac but Hayes was pursued for the sins of Girardo and his insider crew, covering up Girardo’s defaults with Hayes’ assets.

Hayes’ project was foreclosed in March 2008 and Westpac sued for possession in 2009. The Queensland Supreme Court in the person of Lyons J decided against him in November 2014 after a hearing for which Hayes was absent due to an extreme medical condition. As with the experience of Uebergang, Hayes was denied document discovery, tolerated by the court, assisted by perjury by Westpac law firm solicitors (Allens, Gadens, Minter Ellisons) denying the existence of certain documents (said documents have since been obtained by Hayes).

These crimes were initiated while the squeaky-clean ex-bureaucrat David Morgan was CEO and perpetuated under the equally squeaky-clean CEO Gail Kelly. More on the sordid details associated with this case is available on Shane Dowling’s Kangaroo Court site, highlighting that (in 2014) CEO Kelly and Board Chairman Lindsay Maxsted were apprised of the fraud against Westpac (a fact that the bank denied between 2010-17).

Hayes has recently received word from Customer Advocate lawyer Adrian Ahern that Westpac is not going to take seriously his claim for compensation, unless he has yet more information to disclose. He has indeed, as Hayes is a walking encyclopaedia on his case and its context. But current Westpac senior management would already be well apprised of the nature and extent of the fraud and the culpability of particular Westpac lending managers and associates who continue to be protected by the bank.

Westpac is facing not merely a hefty payout to Hayes for both monetary and significant non-monetary losses incurred, but the fallout from the fact that the bank had failed to report such corrupt activities in its perennial breach reports to the authorities, as well as the failure to report such to the police. Heads should roll.

At Westpac’s AGM, 8 December 2017, held just after the government announced the establishment of a Royal Commission, Hartzer claimed:

‘“Banks have been a political football for too long. That’s why we have now accepted the need for a royal commission to create certainty and confidence in our banking system,” Mr Hartzer said. Mr Hartzer conceded the inquiry might find "issues" in the industry, but he hoped it would also show the bank was acting to resolve past problems, and investing in customer service.’

Westpac victims would certainly like to see Mr Hartzer’s ‘hope’ fulfilled. As Westpac’s CEO since February 2015, Brian Hartzer inherited the dirty linen, but why should he want to wear it? (The same question goes for the current CEOs of all banks).
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BRN Comments

Well you can't argue with Evan Jones. He has seen it all and is particularly incensed by the way farmers and small to medium sized businesses have been abused for decades. Legacy cases are the first crucial test for bank CEOs and boards. We have dealt with some shocking cases of asset stripping. Bankers have caused untold hardship to far too many families.

The banking Royal Commission deliberately avoided investigating the worst of it. Proper remediation must be paid sooner rather than later. Many victims have been battling for 20 or 30 years. Up to now the banks thought the usual delay, deny, deceive routine would save their bacon and bonuses. Those days are over. Even ASIC has now decided to be much more proactive in the investigation and prosecution of bank criminality. They have already got files open regarding some of the cases we are concerned about.

Brian Hartzer has been personally handed the case histories Westpac must properly sort out ...... including those of Colin and Patrick. Carolyn and Adrian are a pleasure to deal with but BRN has been informed by a whistleblower that bank executives are very reluctant to offer proper remediation as their own positions are at risk. This is the culture that even the flawed Royal Commission identified.

We must not let politicians and bankers continue pretending that our banks are strong and honest. Right around the world serious crimes and misconduct have been exposed. Just recently we shared a letter from the UK's Thames Valley Police & Crime Commissioner Anthony Stansfeld - it is a killer exposing just how much crime and corruption has become a routine part of the banking and finance sector - link below.

Also below links to more information regarding the Westpac cases detailed here. In addition Senator Paul McLean's book Bankers And Bastards also has many pages devoted to Tony Rigg - victim of CBA. We are still waiting for a personal response from CBA CEO Matt Comyn. Last we heard there was an implication that his sense of justice hasn't been tempered. We shall see.

Have a look at the pdf attached - Senator Paul McLean writes to the Foreign Borrowers' Association about the reputation of Australian bankers in Europe during the 80s and 90s.