White collar crime treated with kid-gloves

Saturday, April 26, 2014

Early last month, former Health Services Union (HSU) national secretary and federal Labor MP Craig Thomson was sentenced to three months in jail for misusing union members’ money. He has appealed the decision.

Later in the month, Michael Williamson, former national president of both the HSU and the ALP, was sentenced to seven and a half years jail with a non-parole period of five years for defrauding HSU members. Few would argue that this was undeserving.

Despite the fact that Thomson and Williamson were union officials, the crimes they were convicted of are often known as “white collar crimes”. But not all white-collar criminals get the punishment they deserve.

In August last year, John Gay, former chairperson of the Tasmanian logging company Gunns Limited, was convicted of insider trading. Gunns was in serious financial trouble in February 2010 when a director’s report revealed the company’s declining revenue. Its share price soon collapsed.

Gay used his inside knowledge of Gunns’ position to sell $3 million of the company shares he owned in December 2009, two months before the report was made public. Instead of being caught by the falling share price like every other investor, Gay effectively pocketed $800,000.

Although the maximum penalty for the offence is five years jail or a $220,000 fine, the Tasmanian Supreme Court fined him $50,000. He was also banned from running companies for five years.

Last week, Gay was again back in the Tasmanian Supreme Court. Less than a year since his conviction he was granted approval to run two family companies — Specialty Veneers, which runs a specialty (old growth rainforest) mill at Somerset, and JEG Management.

Gay then applied for the Australian Securities and Investments Commission, which had opposed his application on the basis it would dilute his insider trading sentence, to pay his legal costs, but that was denied.

There might be some extra business for specialty timber producers in the state soon. Besides proposing to remove World Heritage Listing from 74,000 hectares of Tasmanian forest reserves, the new Liberal premier, Will Hodgman, has said that he will allow Forestry Tasmania into World Heritage listed areas to log specialty timber.

Tasmanian Greens leader, Kim Booth, put matters rather gently when he said that there was a lot of dissatisfaction in the Tasmanian community over the kid-glove treatment of Gay. Outrage is a bit more like it

From GLW issue 1006