Brian Hartzer has been forced to step down as the CEO of the banking giant Westpac after AUSTRAC revealed the bank had breached anti-money laundering laws more than 23 million times.
AUSTRAC is the government’s anti-money laundering and counter-terrorism financing regulator. They claim that, among other things, Westpac knowingly facilitated transactions that enabled child exploitation in the Philippines and across South East Asia.
AUSTRAC described Westpac’s conduct as “serious and systemic non-compliance”. The agency has now applied to the Federal Court for civil penalty orders against the bank. Westpac faces the prospect of fines totalling more than $1 billion, although they could be much less.
Coming on the back of a royal commission that exposed a raft of corruption in the banking sector, this latest scandal is another major blow to the authority of the big banks.
While both the Liberal and Labor parties act as representatives of the banks, even they saw this as a step too far and called for senior executive changes. Westpac’s management themselves however initially ignored the gravity of the situation.
It has been reported that only hours before resigning Hartzer told colleagues that this was “not an Enron or Lehman Brothers” situation, referring to two of the biggest corporate collapses in history. He also said the scandal “was not playing out as a high street issue”, showing contempt for ordinary people’s attention and understanding.
These people are indeed out of touch, expressed in the fact that despite his criminal activity, Westpac will pay out Hartzer at least $2.7 million. That’s the equivalent of a year of his salary or 60 times the median Australian income.
The hypocrisy of the bank bosses is just as bad as the government itself.
When pressed on the matters Prime Minister Scott Morrison said that the government would not interfere in the running of the bank. He said that senior management positions should be decided by the board.
This is in stark contrast to the way the government treats workers’ trade unions.
Proposals in the anti-democratic Ensuring Integrity bill mean that a union could be deregistered for three successive administrative paperwork errors. Union officials could also be more easily removed, as opposed to union members themselves deciding who their leaders should be.
The big four banks are amongst the most exploitative institutions in Australia. Huge amounts of their profits come from fees, interest and charges levied on ordinary people.
Socialists say that the profit motive needs to be removed from the sector. The big banks should be brought into public hands and run democratically for the public good.
That’s the only way to end the rip-offs, the corruption and the greed.
By Anthony Main