Hartzer must go
Westpac stands universally condemned and the CEO has to take responsibility
If Westpac chief executive Brian Hartzer does not immediately resign, or the company’s board does not sack him, it will make a mockery of any remaining notion that CEOs are rewarded lavishly for good performance and held accountable for bad performance. If there is no consequence for such an appalling failure, the reputation of the whole of corporate Australia will be flushed down the toilet, joining the reputation of the banking sector. So far today Hartzer is refusing to step down, insisting that he stay on to fix the problems that have occurred on his watch. In the court of public opinion, that is completely untenable. If the country’s most powerful company directors cop that excuse then they, too, should be for the chop. What’s also increasingly plain is the contrast between the prime minister’s hands-off approach to the banks – telling the ABC that “it’s not for the government to say who should be in those jobs or not” – and his government’s crackdown on unions with the Ensuring Integrity Bill, which will do exactly that.
Regulator AUSTRAC yesterday claimed that Westpac had breached counter-terrorism and anti–money laundering laws on more than 23 million occasions. The most damning allegation was that the bank had failed to “carry out appropriate customer due diligence on transactions to the Philippines and South East Asia that have known financial indicators relating to potential child exploitation risks”. That is simply mind-blowing. The Australian Financial Review reports [$], for example, that across more than 3000 transactions since 2013, 12 Westpac customers used their accounts to pay a total of almost half a million dollars to recipients in these locations. One such recipient was arrested for child trafficking and child exploitation – including live-streaming child sex shows and offering children for sex.
Commentators are almost unanimous: Hartzer must go. Nine’s Adele Ferguson, author of Banking Bad, wrote yesterday that this was “skin-crawling stuff”, a scandal Westpac could not live down. The AFR’s Chanticleer columnist this morning writes [$] that Hartzer’s attempt to push responsibility down the line “simply isn’t good enough”. The Herald Sun’s veteran Terry McCrann goes one step further, forcefully calling for both Hartzer and Westpac chair Lindsay Maxsted to quit, adding [$]: “And I do mean IMMEDIATELY – they must both be out of the building today. If Hartzer won’t resign he must be sacked – again, today.”
Maybe Hartzer and Maxsted will last the day, maybe they won’t. The Australian points out [$] that Hartzer has $21 million reasons to hang on, on top of the $5 million he earned last year. Attorney-General and Industrial Relations Minister Christian Porter was suitably damning yesterday, saying, “On its face, it’s completely appalling,” and pointing out that the Commonwealth Bank paid $700 million to settle a similar action over 53,000 breaches. Investors are doubtless doing their own sums on Westpac’s potential liability, and have dumped the bank’s shares, lowering the whole market.
The more important point was the stark contrast with the government’s heavy-handed union-busting Ensuring Integrity Bill, which looks likely [$] to pass through the Senate in the next fortnight, with the support of Centre Alliance and One Nation. Porter denied the government was using a hammer (a bill that will allow union bosses to be removed and whole unions to be deregistered) to crush a walnut (Victorian CFMEU secretary John Setka). He went on: “Now in answer to your question about, if you like, the analogy between different set of circumstances, do we honestly think that it is a minor matter – a walnut – that a CFMEU official bullies, intimidates, and lies to an electrical apprentice, turning up at student accommodation just trying to do their job to put solar panels on a roof? Because that’s the behaviour that is going on. It is not a walnut. It’s unbelievably serious. It’s unbelievably costly.”
Rubbish. Compared to the allegations against Westpac – systematically enabling child exploitation and who knows what else – that kind of anecdotal allegation against the CFMEU suddenly rings extremely hollow. One rule for capital, another rule for labour.
Treating fines as a cost of doing business? It’s what the banks do.
“At first blush, this looks like the complete abandonment of open justice. Are we now a totalitarian state where people are prosecuted, convicted and shunted off to prison without they or the public having any notion as to what has happened?”
“The suggestion that … Australia, accounting for 1.3 per cent of the world’s emissions, that individual actions of Australia are impacting directly on specific fire events, whether it is here or anywhere else in the world, that doesn’t bear up to credible scientific evidence.”
“In our vision of the future: Ageing, polluting coal power stations are replaced with clean, renewable energy sources … Australia is a leader in responsible climate action. The transition to 100% clean energy creates good jobs for communities around Australia. The shift to clean energy takes place in a just way for Indigenous peoples the world over, people of colour, poor communities, women, fossil fuel communities, young people and future generations; and Aboriginal and Torres Strait Islander peoples are central to decision-making about energy developments taking place on their lands. Our homes, businesses and industries are powered by affordable and reliable clean energy sources like wind, solar and batteries. We breathe clean air, free from toxic coal pollution.”
“In an underreported crime like sexual assault, just changing the law does nothing. We need to change society. We need to change the people and we need to change the men. This is a step in that direction, but there is so much more that we could be doing and I hope this helps start that.”
“Denial takes many forms. There is the shameless intellectual dishonesty of the hard right, with its junk science and surrender to corporate interests. This is Tony Abbott declaring coal is ‘good for humanity’ or Scott Morrison bringing a lump of coal into parliament … But there is another form of denial as well, one more insidious than the full-blown denialism of the far right. This is the kind we see when politicians accept the science of climate change but refuse to grapple with its implications.”
Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?
If Westpac chief executive Brian Hartzer does not immediately resign, or the company’s board does not sack him, it will make a mockery of any remaining notion that CEOs are rewarded lavishly for good performance and held accountable for bad performance. If there is no consequence for such an appalling failure, the reputation of the whole of corporate Australia will be flushed down the toilet, joining the reputation of the banking sector. So far today Hartzer is refusing to step down, insisting that he stay on to fix the problems that have occurred on his watch. In the court of public opinion, that is completely untenable. If the country’s most powerful company directors cop that excuse then they, too, should be for the chop. What’s...