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Business is business and company directors are under an obligation to ensure
the owners of the business, that is the shareholders, don't lose their money.
It's their job to make sure that the cash keeps flowing in and that the returns
are perpetually increasing so the wealthy get wealthier. We don't want
disgruntled shareholders turning up at the AGM and causing strife now do we?
The current fracas surrounding the Australian Wheat Board gives us a glimpse
into the workings of international business and its ties to government. Now this
case is special because the AWB used to be owned by the grain farmers who
supplied its primary products. It was a highly regulated, government body that
was required to report to parliament and was overseen by the prime minister and
a minister from each of the grain growing states. In theory, it was accountable
to us, the citizens, via the parliamentary reporting processes.
One of the first moves by the Howard government after it came to power in 1995
was to complete the process of privatising the AWB begun under the Keating
government. John Anderson said in 1996 that the AWB could not continue and he
was going to sell it off.
Anderson and his colleagues came up with the idea that a dual share type
arrangement would be 'best' for the farming community and thus set up the
private company as a listed company on the stock exchange. Now under this
arrangement there are two classes of shares. As in any class based system one
type of share has more 'value' (worth, power) than another. The structure that
Howard's men came up with ensures that while farmers make a reasonable return,
the major shareholders make an even greater return on their shares as they are
the ones whose shares are more 'valuable'.
A quick look at the ASX list of AWB shareholders is an interesting journey to
make. Six of the top eight major shareholders are banks or financial
institutions. JP Morgan, National, Westpac, ANZ, HSBC and AMP. Historically
farmers are large borrowers. They have to find money in hard times to tide
themselves over and in boom times are quite able to repay their loans. Of
course, a problem arises when long term hard times hit and the banks are
'forced' to foreclose and sell off the family farm. We all know the stories
about this practice.
What I find interesting is that the banks, the ones who throw people out of
their houses and off their land, are also the ones demanding the board of AWB
make them even more money. What is also interesting is the question posed by
George Megalogenis in the Australian last week.
As noted previously, historically the AWB was overseen, directly, by the PM and
state ministers. They oversaw it and made sure it was abiding by all laws and
regulations. If there was any hint of trouble the PM would be directly in the
firing line. By outsourcing - privatising - the business the PM and the
government could, in fact, claim what is known in PR circles as "plausible
deniability". As Megalogenis puts it, the government can call on the "children
overboard defence". The government didn't know because it didn't ask and no-one
told them.
Megalogenis recalls for us Howard's own words in the parliament only three years
ago. He quotes Howard as follows, "The oil-for-food program has been immorally
and shamefully rorted by Saddam Hussein, who has used the proceeds of it to
acquire his weapons capacity and support it … It has to be said, and the
Australian public should be reminded, that we had these economic sanctions
because Iraq did not disarm ... Worse still, having through his policies made
those sanctions necessary, the Iraqi leader has compounded the sins inflicted
upon his own people by rorting the very oil-for-food program which was designed
to, in some way, mitigate the impact of the economic sanctions. So he is doubly
guilty of betraying his obligations towards the Iraqi people."
Let's expand the circle and see who else is being disingenuous when they say
they didn't know anything about the AWB and its "facilitation payments" to quote
that great moral leader, Philip Ruddock. At the time the AWB was privatised
Alexander Downer was Foreign Minister and Mark Vaile had just replaced Tim
Fischer as leader of the Nats and Deputy PM. He also took on the role of Trade
Minister, a role that puts him, alongside Alexander Downer, right in the firing
line of the Cole inquiry.
We know that a government never sets up or allows the formation of an inquiry
that might come up with findings adverse to that government so we find the Cole
inquiry nobbled to restrict its investigation. That is nothing new. Governments
have been doing it for years. It's 'good' government business practice. However,
what will be interesting is to see if any of the major shareholders cop any
flack over their greed.
Like Gunns in Tasmania, a business that ruthlessly destroys as much of the
natural beauty and amenity of Tasmania as it can, the AWB is mostly owned by
financial institutions. It is quite obvious that they are as ruthless and want
to maintain their "plausible deniability" of and culpability, as the government.
We must add into the mix here the Washington lobbyists who are at least as rabid
as the businessmen running this country. There are thousands of these men and
women on Capital Hill whose sole job is to get into the ear of the politicians
and use whatever means possible (I didn't say legal) to get the pollie to vote
favourably on whatever issue it is they are hawking. We should not forget that
the agriculture lobby is one of the most powerful in Washington and is in the
top five with the military, pharmaceutical, energy and Christian industries.
There are many among our 'closest ally' that would like to put the AWB and
Australian grain farmers out of business.
This leads us back to where we began. The lobbyists, the directors and the
shareholders can argue quite convincingly that they are only doing their job. So
can Howard, Downer and Vaile. "We're only protecting the national interest",
they each chime in turn. However, what they can't and must not escape is the
culpability they share as ministers of the government and of the people.
They are supposed to know! If we look at Howard's record as PM he has to go down
as one of the most uniformed, forgetful or ignorant men to have held the office.
He denied any knowledge of the children overboard affair. He denied lying to us
about weapons of mass destruction. He lies to us about not knowing anything
about the AWB scandal. So does Downer and Vaile. So I pose this question to you.
If these men have no idea what is going on in their own departments who does? If
they want to sound credible, surely they need to show some leadership and own up
to the bribery and corruption they have allowed to take place on their watch.
Howard promised us a ministerial code of conduct and it has been years since a
minister resigned. Yet since then we've had Reith and the Patrick affair,
children overboard, weapons of mass destruction and now the AWB. The Howard
government seems hell bent on proving one thing only. It is not running the
country. It is just facilitating business. And why do businesses exist? To make
money for their shareholders and who might the major beneficiaries be, again?
Those with the most wealth already.