Finance Finance News ‘It would clean up white collar crime in this country’

‘It would clean up white collar crime in this country’

jeff morris
CBA whistleblower Jeff Morris says better protections for tipsters will clean up banking. Photo: AAP
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Jeff Morris, who exposed the financial planning scandal at the Commonwealth Bank, has joined fellow whistleblowers, legal experts and even a former US regulator to urge Parliament to better protect those who “sacrifice” themselves to expose wrongdoing.

As the banks pressured lawmakers to water down proposals for whistleblower protections, Mr Morris told The New Daily that if the laws were improved many more witnesses to bank misconduct would come forward, sooner and at far less personal cost.

“Under the current system, the real victims are the whistleblowers because you are basically making the decision to sacrifice yourself and your family to get justice for others.”

Nine out of 10 potential whistleblowers he has met never act, Mr Morris said.

“The fact is, we’d clean up white collar crime in this country. It’s cause and effect. We have a weak corporate regulator, no whistleblower protections and so companies feel, quite correctly, that they have very little exposure.”

Mr Morris spoke out after last week’s two days of hearings convened by a joint parliamentary inquiry, which is considering whether Australia needs better whistleblower protections, including paid incentives (“bounties”) and better protected disclosure to journalists.

A host of legal experts, advocacy bodies and unions support reform. The corporate world was broadly approving as well, although the Australian Bankers Association and the Australian Institute of Company Directors opposed protected leaks.

In its submission, the ABA said disclosure to the media “may compromise the ability of the bank or corporation to maintain anonymity for those involved in the process”.

Jordan Thomas, a former US prosecutor who went after UBS, Citigroup and other dodgy banks, told the inquiry on Friday to ignore the promises to reform from banks and other companies “announced at press conferences with great fanfare”, as only whistleblowing brings lasting change.

“In the United States, after a lengthy and robust debate about how to break the cycle of corporate corruption, we landed on a simple, yet fundamental truth. Law enforcement authorities and financial regulators cannot effectively and efficiently police the marketplace without the assistance of knowledgeable individuals.”

jordan thomas
Former US prosecutor Jordan Thomas encourages the Australian Parliament to toughen whistleblower protections. Photo: Getty

Just 43 whistleblower tips have resulted in almost $1 billion in sanctions imposed by Mr Thomas’ former employer, the Securities and Exchange Commission.

“Accordingly, the challenge and opportunity for the Australian Parliament is to find ways to appropriately incentivise knowledgeable individuals to blow the whistle on corporate wrongdoing and protect them when they do.”

Maurice Blackburn partner Josh Bornstein, who has represented bribery and wage fraud whistleblowers, said Australian laws were an international embarrassment.

“The laws are best described as ‘a dead letter’ – legislation that sits on the statute books that no one uses because it is literally useless,” he told the inquiry.

Mr Morris, the Commonwealth Bank whistleblower, said protected leaks to journalists were especially important because they were one of the few ways to force Australian regulators, “cosy” with the banks, to act.

“No doubt it would suit the banks and vested interests very well if there was no protected disclosure to journalists, but given that we’ve got a regulator that, even when you load the gun and put it in their hand, can’t pull the trigger, what viable alternative do we have?”

Dr Benjamin Koh, who was fired by the Commonwealth Bank for breaching an IT rule after requesting an internal investigation into CommInsure, said he would have leaked to journalists instead “if I knew what I know now”.

“I was too trusting that the company would do the right thing instead of trying to contain the damage. Had I known that raising the issues internally would cause me to lose my job I wouldn’t have done so,” Dr Koh told The New Daily.

“Knowing what I know now of ASIC and APRA, that would not have been where I would have blown the whistle either.”

Even if he had contemplated an external leak, Dr Koh said he might still have baulked at paying the price.

“Whistleblowing is a thankless task. It devastates a person professionally, emotionally, financially. It would help if there were clear and strong protections as contemplated by the inquiry.”

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