Heads should Roll !

The wording of a press release about the Commonwealth Bank and the penalty for its money laundering activities will have many people grinding their teeth in rage. It says the Commonwealth banks " has agreed " to pay a seven hundred million dollar fine to settle this matter.

Since when does a criminal have to agree to the penalty imposed by the government financial intelligence agency ?  This may be the biggest fine in Australian corporate history, but it is a mere slap on the wrist from what the letter of the law could have imposed - and that would run to billions.

It also raises the question of who exactly suffers that fine loss ?  The Commonwealth Bank exists as a registered entity on a piece of paper filed away somewhere.  The people who own the bank - and who are called shareholders - will have seven hundred million dollars less available to fund dividends, and their shares have lost value on the stock exchange because of the adverse publicity from this imbroglio.

What is missing is delivering accountability to the highly paid people whose lack of diligence allowed millions of dollars of drug and crime money to be laundered through the banks ATM network for ages after the misfeasance was disclosed and some of this money found its way to terrorist organizations.  The very people with a control function allowed a criminal activity to proceed unchecked and they are not being brought to account for their actions.

So far the chief executive has fallen on his sword and resigned.  He simply collected his superannuation and walked away, and it appears unlikely that any of the management team will face a court and answer charges.  This was a crime that the bank committed.  It broke the laws of the Commonwealth and an audit can track the crime procedure to the very person with the responsibility to see that the law was obeyed.

This does not deliver a necessary message to the business community.  The people who sit on company boards and the executives who manage company affairs are people of prestige who usually receive very high salaries and other forms of compensation.   They are just as responsible for obeying the laws of this country as ordinary citizens.  A fine imposed on the corporation for which their actions constitute a crime does not absolve that individual from the accountability for which they are legally responsible.

We will not get honesty in the business world until the agencies tasked with supervising business accountability go after the individuals who had the responsibility to ensure those illegal actions did not occur.   It is no excuse that they were committed by a subordinate.  Department heads are accountable for whatever takes place under their control.

Until erring people are removed in handcuffs and face the publicity of their appearance in court the absence of ethics in making a firm profitable will be applauded in business circles.  In this Commonwealth Bank instance the people who allowed this crime to happen are hiding behind the power and majesty of a national institution.

This seven hundred million fine is meaningless while the law is appeased by simply ignoring the individuals responsible and going after the trading name for punishment.