Financial intelligence agency AUSTRAC is pursuing Westpac over 23 million alleged breaches of money laundering laws in the biggest such case in Australian history. According to AUSTRAC, Westpac allowed transfers of about $11 billion without proper scrutiny, including funds destined for child exploitation rings in the Philippines.
Some believe that is just the tip of the iceberg when it comes to Westpac鈥檚 crimes. Thomson Reuters Asia-Pacific Bureau chief in Financial Crime & Risk Nathan Lynch alleges the system was primarily used to implement corporate tax evasion. "That's what this case is all about,鈥 he said.
鈥淚t's the facilitation of massive high-level, cross-border tax evasion." He added the AUSTRAC prosecution will "send shockwaves around the globe."
Caving to public pressure, Westpac CEO Brian Hartzer resigned as head of Australia's second-biggest bank on November 26. Westpac announced that Hartzer had been given 12 months' notice and would pocket a tidy $2.7 million salary during that period.
Responding to the news, Finance Sector Union (FSU) national secretary Julia Angrisano said on November 20: "Today we have an appalling case of Westpac being accused of breaking money laundering laws on 23 million occasions, illegally moving $11 billion dollars. The allegations include claims of potential聽child exploitation."
Angrisano noted that Westpac is not the only bank in the firing line: "Yesterday [November 19], the Commonwealth Bank pleaded guilty to illegally selling life insurance to consumers through unsolicited phone calls, after being criminally charged by [the Australian Securities and Investments Commission].
"And earlier this month, the National Australia Bank admitted to 255 breaches of credit laws and faces financial penalties as a result of the 'Introducer' loans scandal.鈥
But while the government goes after the banks with a feather, it is dramatically stepping up its attacks on trade unions.
Angrisano said: "Even though they are finally being targeted by the federal government, the banks can negotiate penalties for ripping off customers that barely dent their bottom line. And there is no impact on their ability to continue in business.
"[Treasurer] Josh Frydenberg thinks the current penalties for banks are OK, but at the same time he is supporting industrial relations minister Christian Porter in an attack on workers and their unions that could see a union shut down for failing to complete paperwork on time.
"There is no suggestion from the [Scott] Morrison [Coalition] government that banks should be closed down for ripping off the public and breaking money laundering laws.
鈥淏ut if this anti-union [Ensuring Integrity Bill] law passes, it will mean the government can take a big stick to unions and give the banks a slap on the wrist."
Responding to the latest amended version of the Ensuring Integrity Bill, Australian Council of Trade Unions president Michele O'Neil said on November 22: "Effectively, the Morrison government is asking the Senate to support laws that would never apply to banks or business and which they would never apply to themselves or their political parties.
"For example, banks have been accused of money laundering, supporting terrorist organisations, charging fees to dead people and supporting child exploitation.
鈥淒espite all this, there are no proposals to ban bank board members, appoint administrators or shut the doors."
"The government is hell bent on trying to shut us down 鈥 This is extreme. It's dangerous. There's no equivalent in the Western world, and there's no justification for it."
In the aftermath of the banking royal commission, which issued its final report earlier this year, calls have been made for the Big Four banks to be more tightly regulated and held to public account. Sackings of bank executives and prosecutions for financial crimes and fraud are an essential follow-up to the startling revelations from the commission.
However, this latest scandal involving Westpac underlines the fact that these banking giants are a law unto themselves, despite the limited role of various regulatory agencies.
There can be no solution to the banking crisis until major banking institutions are taken out the hands of private profiteers and placed under public ownership 鈥 just as the Commonwealth Bank was until the mid-1990s.
Considering the widespread public outrage over the scandals revealed by the banking royal commission, now intensified by the Westpac disaster, it is time to mount a major community-based campaign to nationalise the Big Four banks under workers' and community control.
We need to demand that the banks' huge assets be placed under public ownership and used for the good of the community and the environment. These funds could be used to build public works and fund much-needed public health, housing, education and renewable energy projects that are essential if we are to effectively tackle the climate crisis.