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Harawira: Serious Fraud Office Abolition Bill

Serious Fraud Office (Abolition and Transitional Provisions) Bill

Hone Harawira, Maori Party MP for Te Tai Tokerau

Tuesday 20 May 2008, 8.15pm

Mr Speaker, yesterday the whole context of fraud, corruption and serious crime took an interesting, and I have to say, a bloody pleasing turn, with the announcement that victims of South Africa’s apartheid regime could finally sue the corporate world for all the help that they gave South African police and military intelligence squads during the murderous years of apartheid.

Many of those victims are now represented by an organisation called Khulumani that is suing the really big boys, like BP, Barclays, Fujitsu, Daimler-Benz, Deutsche Bank and others – for their corporate investment of a system of racist domination, a system known the world over for harassment, intimidation, torture, violence and murder; corporate investment in the form of finance, oil, weapons and corporate technology.

So while it’s sad to be reminded of the horrors of apartheid, it really is pleasing to see that those big companies who profited from the oppression and repression of the Blacks of South Africa, are finally being dragged kicking and screaming before the courts, to answer for their complicity in the deaths of the thousands of people, whose lives were destroyed under apartheid.

Meanwhile, back here in good ole Aotearoa, are we going after the big criminals, the corporate raiders, the big thieves who have blighted the lives of tens of thousands of ordinary New Zealanders? Like hell we are.

Mr Speaker, while the Serious Fraud Office is supposed to have been going after the big crooks charged with: defrauding the public of amounts greater than $500,000, complex fraud, and fraud of major public concern; in fact they’ve been spending most of their time chasing the little boys, like $25,000 worth of improper expenditure by a school in Hamilton.

Yes, they’ve averaged something like 13,000 fraud investigations a year, but while they’ve been doing all that, the Big Bandits like Bluechip and Bridgecorp, get away scot free.

And just a bit of background on these guys … last year property finance company Bridgecorp went into receivership owing $500 million to 18,000 investors; and this year 22 Blue Chip property investment companies collapsed, owing 2,000 investors, some $80 million.

And guess what? To no-one’s surprise, it seems that although the Serious Fraud Office is currently investigating Bridgecorp and Blue Chip, it would appear that a prosecution might not necessarily follow.

The fraud was so bad in fact, that the Serious Fraud Office actually called it a “deliberate, dishonest presentation of records so as to give investors a false position of the company's financial position."

And yet for all that, the pathetic conclusions at the end of last week were that no matter how explicit the corruption appears to be, how blatant the theft, how improper the activity, apparently the Serious Fraud Office reckon that a prosecution might not necessarily follow.

Mr Speaker, it’s this kind of rank hypocrisy, this racist protection of the corporate world, that really, really … upsets me.

$58 million stolen from Mum and Dad investors and we’re expected to just sit back and watch while the thieves simply change their jackets and go back out and do it all over again – while Maori and Pasifika get thrown into jail for pinching Mum’s handbag, and stealing Dad’s car.

Blue Chip steals millions and millions of dollars of investor money, and then goes belly up, dragging down 19 other companies, and the UFO – the “U can’t be serious” Fraud Office, lets them get away with it.

Sure, the Commerce Commission is looking into breaches of the Fair Trading Act, and whether investors have been conned by misleading representations, but these guys ain’t going to jail anytime soon.

In fact, when I heard Blue Chip founder Mark Byers, say he wanted to put some of his own money into a compensation fund, the first thing I thought of was a Tui ad “honest – I’m gonna give it all back … yeah right”.

And while the Blue Chip crooks get away with doing far, far more damage, to far more people, far more often, instead of beefing up the UFO and giving them some serious grunt, instead they’re getting disestablished, and their functions are going to be transferred to an Organised Crime Agency, with increased search and surveillance powers, and targeting money laundering, and large scale drug trafficking money, with a central focus on countering the billion dollar methamphetamine market.

And that’s cool. Let’s do everything we can to nail the meth gangs, cut off their supplies to finance, ingredients, cooks and the dumb and desperate fools sucked into selling P to their own relations.

But given how quickly the taser got used to zap the wrong people:

* like how a cop slipped and zapped the wrong person;

* or how another one ended up zapping himself;

* or how those lazy buggers zapped that poor guy lying face down on the footpath with his hands handcuffed behind his back;

let’s not get so gung-ho, that we don’t keep a very careful eye on the new search and surveillance powers, included in this Bill.

The Law Commission’s 500 page report on search and surveillance laws released last year, noted huge inconsistencies in the powers of police and non-police agencies, and called for a wide ranging review to bring search and surveillance laws together into one comprehensive statute.

And given that we haven’t even seen the proposed new Search and Surveillance Bill yet, we’re naturally very concerned at the granting of new powers to police, and how those new powers will be independently monitored, to guard against excessive use, against Maori communities.

I also note that this new Organised Crime Agency will also be charged with going after cyber criminals: the crooks of the new age; the internet fraudsters:

• and no offence to the officials group stitching this whole thing together,

• but given how the IRD lost $60 million recently, and a few other agencies have just been conned by a fraudster from within;

• I struggle to see how a hotchpotch of the Ministry of Social Development, Department of the Prime Minister and Cabinet, Internal Affairs, Te Puni Kōkiri, Pacific Island Affairs, Corrections, Customs, Department of Labour, Inland Revenue, and the Ministries of Health and Fisheries,

• will be able to put together the infrastructure, the expertise, and the information technology intelligence to respond to the highly intricate nature of internet crime.

I mean, it took the FBI and the Dutch police to track down that kid in Whitianga who crashed the computer network for the entire University of Pennsylvania, and we now know has earned more than $40,000 as a professional hacker, making software specifically to crash networks.

And we’re going to get WINZ to do the investigation here? I can just see another Tui ad coming on …

Mr Speaker, organised crime is significant, it’s pervasive, it’s reach is global but the pain is very, very local, and beating it will take skill and co-operation, and the Maori Party will support this Bill through to Select Committee, to ensure these issues are given the serious consideration they deserve.

But we challenge this House to not just focus on the crimes of the poor, but also target the rampant and criminal activities of the financial classes, the big boys who don’t just steal from families, but as the multi-billion dollar bailout of Bear-Sterns in America proved, can bring down whole countries.


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