The Commonwealth Director of Public Prosecutions called the Australian Securities Commission yesterday a “”gentlemen commercial regulator” without enough interest in jailing corporate crooks.
Michael Rozenes, QC, said the ASC policy had resulted in one law for the rich and another for the poor. Rich corporate crooks got civil penalties, whereas those without any money left were prosecuted under the criminal law.
The policy brought the criminal law into disrepute.
The ASC’s emphasis was on protecting the creditor or the shareholder. Its policy seemed to be that if you imposed a commercial civil penalty that would be a deterrent.
“”It won’t,” he said.
Mr Rozenes was prosecuting his argument before a panel of six members of the Joint Committee on Corporations and Securities at Parliament House.
He said the ASC seemed to think corporate criminals will be deterred by losing their ill-gotten gains.
“”I can tell you as a barrister practising in the corporate and white-collar area for 15 years that that is the last thing he is worried about,” he said. “”There won’t be a dollar left in the jurisdiction by the time they find out.
“”What he is really afraid of is going to prison.”
The system did not offer rapists, arsonists and robbers the option of paying civil penalties; why should it be different for white-collar crime, he asked. The civil penalties might be a deterrent if 80 per cent of the crime were detected because no businessman would bet on a 20 per cent chance. But only a small percentage were caught so it was no disincentive just to say put the money back.
“”That is a pie in the sky view,” he said.
The Commonwealth should have consistent prosecuting guidelines for all agencies. Where there is serious criminal conduct it must always be prosecuted.
The Commonwealth DPP was in a different position from those in the states. Nearly all investigating work in the states was done by police. Police had only one legitimate objective: to bring criminals to book. However, under Commonwealth law, agencies other than the police investigated, most notably Customs, Taxation and the ASC. These bodies had other objectives like protecting the revenue or regulating corporations.
The ASC made decisions on which cases to send to the DPP for prosecutions on criteria (if there were any) unknown to the DPP.
Those decisions should be made on guidelines consistent with Commonwealth prosecution policy. The Commonwealth could not possibly prosecute every case however trivial. The decision on which ones should be prosecuted should be made on a uniform and fair basis determined by the criminality of the case, not ulterior aims of the regulating authority.
He complained that the ASC did not prepare prosecuting briefs properly. Sometimes it handed over thousands of pages of transcripts of investigations. These were not acceptable to the courts. ASC investigators, like the police, should get their briefs in proper evidentiary form.
The DPP should be involved earlier in an advisory role to make sure the investigation was pursued with the aim of getting a manageable case into court.
In evidence to the committee last month, the chairman of the ASC, Tony Hartnell, said the ASC had to stand or fall as a commercial regulatory agency.
“”Its criminal investigative proceedings have to be ancillary to its mainstream activities,” he said. He complained that the DPP was suggesting the ASC should chase “”every crook down every burrow.”
Mr Rozenes acknowledged there was a clash of philosophies. He rejected Mr Hartnell’s idea that the ASC should do the prosecutions or alternatively that the police should do the investigations and brief the DPP. He said the ASC was the expert body to investigate corporate crime and the DPP was the expert independent prosecutor.
The fighting between the agencies might give the crooks some heart, but the position was not irretrievable.
The solution was the ASC to put more skill and resources into preparing cases in the lead up to presenting a brief for prosecutions. The solution was for the ASC not to treat prosecution of corporate crime as an ancillary function, but an equal one with corporate regulation.
The DPP could not do that for the ASC without risking the necessary independence required for fair prosecutions.
Mr Rozenes called for a new criminal jurisdiction for the Federal Court with juries for the prosecution of Commonwealth crime. He said the present system of prosecuting in different state courts was inefficient and gave rise to inconsistencies.
He called for more specialist judges and more use of computers in courts.
The committee then went in closed-door session and will deliver its verdict to the full Parliament sometime in the future.