The vox pop on Alan Bond has two sides. Those infuriated say his four years in jail is pitifully small compared to the amount of the fraud and the time served by others for petty theft under mandatory sentencing. They are infuriated by the likelihood he has spirited money away overseas which no-one can touch. And they are incensed that his sentence was reduced on a legal technicality.
On the other side, Bondy won the America’s Cup. He did not have any real victims. And he stood up and pleaded guilty. He did not skulk off like Christopher Skase.
But underlying the vox pop is a more alarming malaise: the failure of our legal system to deal with corporate fraud. Very few, if any, of the swashbucklers of the 1980s who came undone in the wake of the 1987 sharemarket crash got their just deserts. Plead not guilty or, if absolutely necessary, guilty in a heavily discounted plea bargain; hire some expensive lawyers; take up every technical point of law and evidence you can find and get off scot-free.
First, though, to the “”Bondy” side of the vox pop. He did not go into the America’s Cup for the altruistic promotion of sport and for the good of Australia. He went into it for the advertising spin off. He had real victims. He siphoned off $1.2 billion from Bell Resources into his own companies via several middle companies. Bell Resources and the middle companies had shareholders who lost their life savings and their retirement nest-eggs. They were not all undeserving rich. He pleaded guilty only when he knew he was done, and then knowing that other charges would be dropped. His guilty plea was more Bond the negotiator than Bond the repentant. He pleaded guilty to two charges of failing to act honestly as a director under corporations law. He escaped the possibility of charges with heavier penalties under the criminal code. Not skulking off like Skase is hardly a merit point. Bond’s trustee in bankruptcy, Bob Ramsay, insisted on keeping Bond’s passport, unlike Skase’s trustee who was foolishly more trusting of his charge. Moreover, Bond applied several times to get his passport back.
Those few who still laud “”Bondy” the Cup winner are like those who see romance in Ronald Biggs without thinking of the victims – the shareholders who lose all and the bashed train driver. It is a surprising neglect given the cries of “”what about the victims?” when dealing with other crime.
Our legal system’s incapacity to deal with corporate crime is often summarised and dismissed in the phrases, “”Got off on a technicality” and “”Bogged down in legal argument”. One newspaper editorialised that the Bond case was an example of our legal system not being perfect, but like Churchill’s description of democracy, it was the least worst and therefore there was no better.
Well, that may be true of democracy, it is not true of our legal system. There are three elements to our system which make the prosecution of corporate crime especially difficult: the adversary system, juries and arcane rules of evidence.
The last of these saw Bond’s sentence cut. The High Court did not see the case as one of the state with the help of a judge getting to the bottom of something. No it was an adversary argument between two parties Bond and the Commonwealth Director of Public Prosecutions. The High Court held that the Commonwealth DPP was the wrong person to bring a case to have the initial sentence increased. It should have been bought by the Western Australian state prosecutor. The merit of the fact that three appeal court judges found the initial sentence was too lenient was of no moment to the High Court.
Our system does not permit judges to be active in pursuing the truth in cases. They sit back and let the parties slug it out.
Notice that Bond pleaded guilty to a lesser charge. Prosecutors obviously knew the difficulty of getting juries to convict so did not risk prosecuting for a higher charge. We had a bit of honesty this week from retiring Tasmanian judge Christopher Wright. He said juries were amateurs in the task before them and “”I am fully convinced that juries return wrong a verdict in about 25 per cent of all cases.” Most court reporters would put it higher.
The adversary system compounds the jury’s difficulties as do the rules of evidence. Juries get utterly confused by the way evidence has to be led, and further confused when objections on technical hearsay and relevancy rules leave large gaps in the total picture. In cases of corporate crime these difficulties are compounded because juries are dealing with high finance which is alien to them in the first place.
It may be that we have learnt a little from the 1980s because corporations law itself has been tightened. But there are lessons the other way which are likely to be heeded in the next crash: make sure you spirit enough money away (preferably with some overseas and some to family members) to pay legal costs; plead not guilty; take every technical point you can, and you will find the Australian legal system is incapable of getting you.
And that is the other infruiating thing highlighted by the Bond case, and many tax cases come to that – there is no international regime for tracing funds. A five-year investigation by the Australian Federal Police ended in nothing in 1998. They knew where the money was, or at least who could lead them to it. But the Swiss and Australian legal systems, helped by Bond from his prison cell ensured the documentary evidence was never yielded up
The surprising thing with the Bond case is not that he only served 1300 days – one day for each million he lost, but that he served any time at all.