Law Enforcement Integrity Commission Lacks Independence
21/01/2020 by Sonia Hickey & Ugur Nedim
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Well before the creation of the ‘Super Ministry’ – the Department of Home Affairs – headed up by Peter Dutton, the government created a key anti-corruption body. The problem is that not many have heard of it until recently.
Despite being set up in 2006, the Australian Commission for Law Enforcement Integrity (ACLEI) remains one of the country’s best kept secrets. In fact, most Australians wouldn’t even know it exists, let alone what it’s primary function is.
What is ACLEI?
According to the organisation’s website, the ACLEI’s primary role is to support the Integrity Commissioner in providing independent assurance to government about the integrity of prescribed law enforcement agencies and their staff members.
But, since its inception, the body has suffered a great deal of criticism for its lack of openness and transparency.
The creation of the Department of Home Affairs put the Australian Federal Police (AFP) under the same departmental umbrella as the people and agencies it is meant to be investigating in partnership with the integrity commission.
As such, there have been widespread concerns that this arrangement not only compromises the independence of the ACLEI and potentially tainting the outcome of the investigations it undertakes. More worryingly, it also meant that the outcome of investigations could be kept well hidden, behind the closed doors of the department.
Investigating the Department of Home Affairs
Currently the ACLEI is investigating allegations of corruption surrounding interactions between the Crown Resorts VIP high-roller programme and the Department of Home Affairs.
Information published by mainstream media including The Age, Sydney Morning Herald and 60 Minutes claimed that Crown Resorts had partnered with tour companies backed by organised crime syndicates implicated in drug running, money laundering and human trafficking, in order to attract wealthy Chinese gamblers.
Leaked emails also suggested that Australian visa and consulate officials in China often fast-tracked visas for wealthy gamblers to come to Crown venues in Melbourne and Perth, despite some posing potential security risks or being persons of interest to law enforcement. Allegations have also been levelled against Border Force official, Andrew Ure, who it’s alleged was able to provide private protection for an international fugitive and Crown high-roller recruiter, known as a junket agent, and in doing so, potentially breach strict professional standards as well as the law. Media reports also revealed that Mr Ure worked at least once for junket agent, a man named Tom Zhou, who is wanted by Interpol for serious crimes.
One of the original criticisms of the ACLEI was that it never conducted investigations in public forums, so many were surprised when it took the unprecedented step late last year of holding public hearings in Melbourne. At the time, head of the agency, Michael Griffin said he believed there was significant public interest in these matters and the investigation would be best served by hearing matters in public. It has been proven time and again that corruption investigations which involve public hearings are far more successful at exposing and prosecuting corruption.
Undoubtedly, given the severity of the allegations and the interest accompanying the investigation, this is an opportunity for ACLEI to prove itself as a credible, professional and independent oversight body, capable of thoroughly investigating corruption and misconduct.
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Crown Casino Investigation by Integrity Comm'n
2 months 2 weeks ago #4456
The family saga that threatens Packer's Crown deal
In the frantic rush to complete Lawrence Ho's $1.76 billion Crown deal, who signed off on the probity risk?
Neil ChenowethSenior writer
Jan 23, 2020 — 12.00am
The billion-dollar question for the NSW casino inquiry is what happened in the two weeks before James Packer agreed to sell a 19.9 per cent stake in Crown Resorts to Lawrence Ho’s Melco International Development group.
The $1.76 billion deal was triggered by a phone call between Packer and Ho in early April, with the terms negotiated from mid-May by Guy Jalland, the CEO of Packer’s Consolidated Press Holdings, and Evan Winkler, Melco’s managing director.
In the rush to get this deal done in-house and without external advisors before it was announced on May 30, who did the due diligence, and who provided the advice that the transaction did not trigger the anti-association clauses in Crown’s Sydney casino licence?
James Packer and Lawrence Ho, pictured here in 2015. Melco Resorts & Entertainment
And how was Crown caught by surprise when its controlling shareholder announced the deal?
Adam Bell SC, one of two counsel assisting the inquiry, flagged on Tuesday that whether the Melco deal put Crown in breach of the licence conditions would be one of the focus points of the inquiry led by former NSW Supreme Court judge Patricia Bergin SC.
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Updated: Jan 22, 2020 — 6.50pm. Data is 20 mins delayed.
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And Bergin, who wields royal commission-like powers, has ruled that privilege claims cannot be used to defeat subpoenas issued by the inquiry.
The public hearings that resume next month should shed some light on how the deal was given the green light.
The problem is the indirect links to Lawrence’s elderly father, Stanley Ho, who for years has been accused of serious triad links by international regulators. He has no criminal convictions and denies the claims.
The terms of the Crown’s Barangaroo casino licence were set out in the 2014 VIP Gaming Management Agreement. Clause 2.4 requires that “to the extent to which it is within its power to do so, Crown will ensure that it prevents . . . Stanley Huang Sun Ho or a Stanley Ho Associate from acquiring any direct or indirect beneficial interest in Crown . . .”
Gambling tycoon Stanley Ho with his fourth wife Angela Leong in 2008. Andrew Ross
The agreement included a list of 59 people and entities defined as Stanley Ho associates. The list was redacted when the text of the agreement was published in 2014, but Crown, Melco and Packer’s companies were fully aware of the list of banned associates.
In fact, Crown was required to vet its share register every quarter to ensure none of the associates held direct or indirect share interests.
The banned list includes Lawrence’s three sisters, Pansy, Daisy and Maisy; his father’s fourth wife, Angela Leong; Hong Kong-registered Lanceford Company; and Great Respect Ltd, in the British Virgin Islands.
How this plays into the current deal begins with a question: how did Lawrence Ho, a young man with limited assets 15 years ago, come to hold 54 per cent of a multi-billion-dollar casino empire today? It’s a family saga.
Stanley Ho’s main holding company in Macau is SJM Holdings Ltd, which controls Sociedade de Turismo e Diversoes de Macau (STDM) and its 14 casinos.
From 2002, sub-concessions were granted to existing operators, which saw Pansy Ho partner with MGM Mirage. In 2005, Lawrence partnered with Crown to buy a Macau sub-concession from Steve Wynn for $800 million.
So what did Lawrence bring to the deal with Packer? He contributed the Ho family land to build their City of Dreams casino on. He bought the site from his father’s companies, but he paid for it with convertible notes that ended up with another Stanley Ho-related company, Great Respect, today owning 20.44 per cent of Melco International.
Battle for the boardroom
From 2011, Stanley Ho’s failing health has seen a family war to control the empire, chiefly between his daughter Pansy Ho and his fourth wife Angela Leong.
Pansy finally won last February through an alliance with other shareholders, ending Angela’s board control. A key part of that controlling stake was the 10.5 per cent of STDM held by Lanceford, one of the companies on the Crown banned list.
Lanceford is reportedly owned by Lawrence and his four siblings. He’s been a director of Lanceford since 2013 and was still on the Lanceford board when he bought the Crown stake in May.
He resigned from Lanceford on June 28, shortly before Crown's list of banned companies was made public. The question is why did Lawrence resign; and why didn’t he resign before he bought Crown shares? Organising his exit from Lanceford took almost as long at negotiating the Crown deal.
Pansy Ho is a step closer to taking charge of the casino empire. Bloomberg
The BVI company Great Respect poses a bigger problem for Lawrence. It is a banned shareholder under the 2014 VIP Gaming Management Agreement and its 20.44 per cent stake is the biggest part of Lawrence’s 54 per cent holding in Melco International.
Melco filings say Great Respect is controlled by a discretionary family trust, with beneficiaries that include both Lawrence and his father.
In 2006, Melco reported that “none of the beneficiaries of the trust control the voting or disposition of shares held by the trust or Great Respect”. That assurance has not been repeated in recent filings.
The trustee was listed as SG Trust (Asia) Ltd until 2016, when it was replaced by Vista Trustees (BVI) Ltd. But no detail is given of who controls the trustee.
Melco and Crown portray Lawrence’s holdings as separate from the rest of his relations. But the Ho family history shows that dividing the family interest like that is rarely so clear cut.
At the minimum, Lawrence and his direct siblings Pansy, Maisy and Daisy are likely to retain an interest in their brother’s success. And they’re on the banned list.
In the event that Stanley Ho dies, it’s not clear whether that list of banned associates will lapse or whether it will continue in force with respect to the other family members.
In its defence, Crown relies on the qualifier in the management agreement that it must prevent banned shareholdings “to the extent to which it is within its power to do so”.
Crown says it didn’t have the power to stop the share transfer. End of story.
The argument is unconvincing, unless it can show that it attempted to obtain such a power.
Otherwise it looks like either Crown signed up to shareholder restrictions that it knew, or should have known, that it could not enforce; or that Crown knew it should introduce changes to its constitution to embody the shareholder restrictions to which it was contracted, but that it failed to do so.
And that would be ugly.
Which brings us back to who was advising Crown, Melco, and Consolidated Press, and concluded there were no problems. We should see some answers when hearings resume on February 24.
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