Westpac, Australia’s oldest bank, its second-biggest bank, its most sustainable bank in 2019 according to Dow Jones, and one of its top employers for LGBTI inclusion, is looking for a new CEO. A message was delivered by financial regulators that it had breached anti-money laundering and counter-terrorism financing laws 23 million times between 2013 and 2018.
These included 3,000 transactions linked to producers of child pornography in the Philippines.
A dozen Westpac clients were identified by the regulator, AUSTRAC, as customers of child exploitation material, whose transfers amounted to hundreds of thousands of dollars. One of them transferred A$132,000 to a person in the Philippines who “was later arrested in November 2015 for child trafficking and child exploitation involving live streaming of child sex shows and offering children for sex”. AUSTRAC said in a press release:
“Westpac has allowed correspondent banks to access its banking environment and the Australian Payments System without conducting appropriate due diligence on those correspondent banks and without appropriate risk assessments and controls on the products and channels offered as part of that relationship.”
Child pornography transactions are just a bubble in the $11 billion ocean which AUSTRAC is investigating. But they are easily identifiable – typically they are small amounts to many payees who have no family relationships in the Philippines or other countries.
So what was Westpac’s response to a message from its money-laundering reporting officer that it had broken the law 23 million times and faced the biggest fine in Australia’s corporate history? It demoted her.
That’s right. According to today’s Australian Financial Review, Westpac shot the messenger.
As for its complicity, however remote, in terrorism, money laundering and child pornography, it was pretty relaxed about it. At a crisis meeting of the bank’s senior executives after the story broke, CEO Brian Hartzer poured oil on the troubled waters:
“This is not an Enron or Lehman Brothers, we will get through this. We all read the Fin (The Australian Financial Review) and The Australian, and we all read that and think the world is ending. But actually for people in mainstream Australia going about their daily lives, this is not a major issue so we don’t need to overcook this.’’
One of Australia’s leading businessmen thinks that his bank will just dust itself off as if nothing had happened? Has he not read the newspapers about the Royal Commission into Institutional Responses to Child Abuse? Has he not picked up the vibe on public outrage at “giving a free pass to paedophiles”, as Home Affairs Minister Peter Dutton put it?
Of course he did. Just a teensy bit, though.
Mr Hartzer cancelled the bank’s Christmas parties. “Unfortunately in the heightened media environment it will not look good if we have our staff whooping it up with alcohol,” he said.
Mr Hartzer resigned earlier this week. But what had given him the smug confidence that this would be overlooked?
Some incensed commentators have accused Westpac of hypocrisy.
That’s nonsense. Mr Hartzer’s team would certainly have thrown up their hands in horror if they had been aware of the money-laundering. They just didn’t care enough.
The question is: why not?
Did those gala dinners for LGBT inclusion, those warm fuzzies for promoting same-sex marriage, those gold stars for carbon neutrality distract them from core business? Did the glamour of virtue signalling give them more of a buzz than the slog of trawling through dreary figures?
Westpac’s website features warm words from Mr Hartzer about the bank’s stand on social justice:
As Australia's oldest company, we are proud to have led the charge on gender equality and are serious about maintaining a workplace that is safe and respectful for our LGBTIQ employees.
That’s fair enough. Everyone deserves to treated respectfully. But then he adds:
At the same time, we are always looking for new ways for the Group to be more flexible and accessible for all our customers and our people.
Here’s a suggestion that many Australians would like to make about those “new ways” — how about taking seriously Westpac's responsibility to keep us safe from terrorists and paedophiles?
Michael Cook is editor of MercatorNet