EYE-BALL’s Human Evil Exposed – John O’Neill (CEO-ARU) … Part 5 – O’Neill makes his move …

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Human Evil Exposed –
John O’Neill (CEO-ARU) … Part 5

Link to all Posted Chapters for –

“Human Evil Exposed – John O’Neill (CEO-ARU)” – The SBS Story

The “Human Evil Exposed” – John O’Neill story link above takes you to a new page where all the chapters to this story are listed and linked.

All the documents that form a part of this story as evidence is linked here. These documents form the evidentiary trail collected as a part of the research undertaken during this project.

The “Human Evil Exposed” – John O’Neill story thus far covers events that took place between 1931 – 1995. The final ending is still to be played out. The motives for what took place in the late 70’s and early 80’s happened in 1931 when the then NSW Government owned – ‘Government Savings Bank of NSW’ was forced to close its doors. This set in motion a number of events that were not resolved until Dec 1987. The motives behind this story are steep in history and these grudges were held for a long time.

After they were finally settled – what then took place culminated in a $75 million FRAUD of public monies carried out by the NSW Government(NSWG) and its agent – The State Bank of NSW – (SBNSW) in 1988.

The players involved and connected with this FRAUD include:

  • Three consecutive NSW Premiers, Wran, Unsworth and Greiner,
  • Several Ministers serving in those Governments and their staffers – one of these Ministers is now a Justice with the NSW Land and Environment Court,
  • Regulatory Departments including the Department of Co-Operatives, Office of Business and Consumer Affairs, and the Australian Association of Permanent Building Societies, (AAPBS) and,
  • Employed State Bank of NSW Executives – the MD was John O’Neill – who all acted in proven ‘conflict of interest’ positions as Directors on the State Building Society Board, and whose intent was to facilitate a FRAUD against the 270,000 SBS members.

It’s a story that crushed the second largest NSW Building Society and at the time it had $1.6 billion in assets, some 270,000 Society members, and 650 SBS staff.

This is a story told by someone who lived through the 87-88 period and is told from his perspective and the evidentiary proof collected from research undertaken to prove the allegations. This story comes from a corrupted base of Corporate greed, corrupt and immoral Director’s, complicit Government representative’s, ego’s driven by historical flawed motive’s, financial market operative’s, drugs, sex, and the brazen Corporate RAPE and THEFT of the $75 million value attached to the State Building Society.

John O’Neill as the MD of the SBNSW destroyed a profitable and functioning Building Society because he could. It was done out of spite and revenge because he lost the 10 year plan to merge the SBS with the SBNSW. In the process he stripped the SBS of its corporate worth and broke all the Corporate and Regulatory rules in doing so. Rules that were put aside by the Administrators charged with the protection of the SBS members and their entitlements. He had help in the NSW Premier Nick Greiner who sanctioned O’Neill’s actions.

The story has many sub-plots and plots within those sub-plots – it is complicated, and to get a full appreciation of these complexities there is much reading to be done.

Please use the comments option below each post for any comments you might want to express – to ask any questions you want clarified – or if you want to make a private comment … please use the e-mail link here – blogcomment@bigpond.com – Enjoy the read …

The EYE-BALL Opinion … [ … where evil lurks – so do friends of the devil … ]

Definitions of Allegations alleged against Mr John O’Neill and his cohorts …

Linked: The Definition of EVIL:

  • morally wrong or bad; immoral; wicked: evil deeds; an evil life.
  • harmful; injurious: evil laws.
  • characterized or accompanied by misfortune or suffering; unfortunate; disastrous: to be fallen on evil days.
  • due to actual or imputed bad conduct or character: an evil reputation.
  • marked by anger, irritability, irascibility, etc.: He is known for his evil disposition.

Linked: Moral Bankruptcy:

  • Definition: the state of being devoid of morality and ethics, used esp. for business and political entities
  • Example: A complete lack of morals is moral bankruptcy.

Linked: Definition of RABID:

  • – irrationally extreme in opinion or practice:
  • – furious or raging; violently intense:
  • Synonyms – zealous, fervent, ardent, fanatical, bigoted.

Linked: Definition of FRAUD:

  • – deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.
  • – a particular instance of such deceit or trickery: mail fraud; election frauds.
  • any deception, trickery, or humbug: That diet book is a fraud and a waste of time.
  • a person who makes deceitful pretenses; sham; poseur.


Part 5 commences … O’Neill makes his move …

John O’Neill was in a rush and he wanted this merger put to bed as quickly as possible.  Yet – the current NSW Premier Unsworth went on record and said – “No – there would be no merger.”

Despite Premier Unsworth’s position, O’Neill went ahead with his merger overtones behind closed doors – an indication to his pluck and or hubris and the belief that with his political connections – Unsworth would be lobbied hard to change his position.  Unsworth stuck to his guns despite efforts to sway him and went to the Mar ’88 elections with the merger still off the table.  To be fair, Unsworth had a lot more on his plate then the SBS – his poll numbers were indicating he was on the nose and this was his first election as Leader.

Nick Greiner’s minority election victory at the polls in late March ’88 handed O’Neill his lifeline.   O’Neill’s immediately task was to convince the new Premier Greiner that the merger was the best thing for the NSWG and the SBNSW.

This was where Greiner’s ignorance and lack of advice in the early formation days of his Government let him down.   Perhaps the previous Premier’s Staff who were still serving during the transition period – updated him to the 1976-82 plan and the Court Case outcome that then only left the final chapter – the merger of the SBS with SBNSW.  Whatever the conversation – O’Neill pitched his want and Greiner said – ‘yes’.

In a direct conversation with Mr Greiner during the research phase of the project – some 22 years later Mr Greiner who was responding to a phone message – made the following statement when asked if he could recall the State Building Society merger with St George.

His response was “… if I was to tell you all that I can recall or know about the State Building Society – we have just had that conversation.”

Mr Greiner had no recall of the SBS … yet – given that the SBS was the cause of his Leadership’s first challenge – a challenge that he had to back down from after receiving legal advice from the Attorney General when his Co-Operatives Minister – Gerry Peacocke challenged the approval given to O’Neill to pursue the SBS merger … one would have though Mr Greiner would have remembered something like that.

Giving O’Neill the approval he sought was perhaps the dumbest decision Greiner ever made.   Greiner trusted O’Neill to give him an honest pitch – O’Neill loaded the delivery in a way where Greiner was only able to see what O’Neill wanted him to see.   O’Neill’s pitch was based on his knowledge of events whilst serving as the Company Secretary under Nick Whitlam, and his knowledge of first hand dealings with the CSB in the final wash-up of the court battle after he became the SBNSW MD.

O’Neill needed the SBS for many reasons – the lease being the completion of a 10 year plan that has tasted success at every turn thus far.   His immediate need was capital to cover the SBNSW’s solvency issues – he needed capital and his eyes were now on the mounting SBS reserves – some $39 million at May ’87 and now approaching $60+ million as at the end of Mar ’88.

Procuring these reserves – or the value attached to them would give him some breathing space and cover the mounting losses appearing on the SBNSW books in the aftermath of the ’87 crash.

At least – that was his perspective at the time he approached Greiner – yet even this was a flawed vision – had he been honest with his employer – the NSWG – he would have told Greiner of the SBNSW losses and the need for capital injection.    Whether Greiner was aware of this at the time is unknown – yet the plan to come up with the reserves from the SBS would solve some of the needed capital requirements.    From this point onwards many things happened and went awry – and despite this – the NSWG and SBNSW were still able to escape ‘natural justice’ and never bought to account – at least until now.

Again – these are serious allegations, and there are any number of SBNSW General Manager’s, and Board Members who were all aware of the precarious financial position the SBNSW was in.   All of them were similarly flawed in that they did not stand up to O’Neill and tell him to face the reality of the Bank’s position.   This went on for years after and up until they were eventually sold to Colonial Mutual in 1995.   In some cases personnel were sacked, or transferred off-shore when they did speak up – all to a cause to keep them silent.

During the research phase of this project – a number of these staff were found and have contributed to the information made available hereto.

With all the past deeds carried out by previous Premier’s and their staff,  and the SBNSW and their group of colluders during the 1978 – ’82 formation period – and then through the Court Case – the intent and actions in what follow from this point onwards – produced the more serious allegations of FRAUDS and CORRUPTION.


O’Neill makes his move:

The SBS Treasurer was due to go on annual leave from the 30th Mar – the Wednesday before Easter Friday.  He was due to return to work on Monday, 11th April ’88.   O’Neill secretly approached Cleary and demanded access to the SBS Treasury whilst the SBS Treasury was away on leave.   Cleary agreed in secret – even his Deputy is on record as having said he was not aware of the impending Audit.   Why Cleary would keep that from Len Thompson is unknown.

The purpose of the Audit was to verify the SBS Treasury operations and portfolio exposures.   For Cleary to allow O’Neill free access for the Audit and for it to be done without the SBS Treasurer’s knowledge and whilst he was away on leave – gives some intent on Cleary’s part to be seen to giving O’Neill everything he asked for.    Cleary knew he had nothing to worry about – he believed that the ‘audit investigation’ would reveal nothing.

O’Neill had his own agenda.   He was looking for ’cause’ to sack Cleary – as one of the SBNSW staff has confided – he had overheard the SBNSW Treasurer [Phil Gray] – tell O’Neill that he believed the SBS profits were false.   The only way to confirm this was to get in the SBS Treasury records and have a look under an ‘audit’ ruse.

So – on the Thursday and day after the SBS Treasurer went on leave – a SBNSW team turns up at the SBS Treasury office demanding entry and access to all the SBS Treasury records.   The Treasurer was still in flight to his holiday destination when this started to happen.  When he arrived there were messages awaiting him from his Treasury staff alerting him to what was happening.

Cleary’s approval for this inspection was never disclosed to any Treasury staff – this fact was discovered during the research phase of this project some two years ago.

Under the SBNSW Treasurer Phil Gray’s direction – his Treasury Audit team headed up by Mr Steve Heald walked into the SBS Dealing room on the 31st Mar ’88.  The SBS Treasurer and the SBS Chief Dealer knew Mr Heald from previous career positions in the Brisbane Market in the early 80’s.  He took charge of the SBS Dealing room reviewing and inspecting all the SBS trading records, its computer printouts, FRA/futures statements, asking questions of trainee staff, and the new Chief Dealer/Fixed Interest trader who had only been with the SBS since mid February.

To say that all the SBS Treasury staff including settlements staff were in a mild panic – would be a huge understatement.    The ‘audit inspection’ went on for the best part of a week – finishing in the week prior to the SBS Treasurer’s return.   The SBS Treasurer had several conversations with Cleary after he became aware of the Audit ,  As Audit’s go – this Audit was not a surprise to the SBS Treasurer – having worked for the Commonwealth Bank for a number of years, Branch inspections were always unannounced and happened regularly.   What was interesting in these conversations with Cleary’s was his apparent surprise at what was taking place.  This was a faked response given what has been uncovered and admitted to in recent times.

During these phone conversations – Cleary gave no hint that he knew what O’Neill’s agenda was.   His anger and insistence that the SBS Treasurer stay away and not return confused the SBS Treasurer.   Having just accomplished the ‘futures play’, and having confided to Cleary everything that was involved with that play – surely Cleary could not think that he could explain the futures strategy in any competent way that would make him sound as if he knew what had happened and what he was talking about.    There was possibly only one other person who could have given a summary of the Strategy – that was the Chief Dealer and he only came on board after the play strategy was in play.     SBS Management was informed at the beginning of the strategy when the SBS tried to take out the Commonwealth Bond Tender in Jan ’88 about what was happening – but their understanding of what was at play was limited by their very small knowledge base as relates to the new SBS Treasury functions and operations.

In the months leading up to this ‘audit inspection’ – the SBS Treasury had been subject to heightened market scrutiny and speculation given what it was doing within day-to-day market activities.   This bought extreme market attention and the SBS profile had largely grown to peak levels based on these ongoing market activities.

There is no doubt that the SBS treasury activities were innovative.  The charter was to manage the SBS liquid assets kept as an operational requirement and part of the total asset base of the SBS.   In past eras these liquid portfolios were proved to never be liquid … i.e. the assets invested in provided the best returns and were generally never sold, in other words the highest yielding return asset was purchased.  To condense the story – the SBS restructured the Liquids portfolio during Aug – Oct ’87 and before the 19th Oct ’87 crash – thus avoiding a $30+ million revaluation hit that would have rendered the SBS insolvent on paper.  With that liquidity restructure the SBS invested in the aftermath of the crash in long-term liquid Commonwealth bonds above 14% and made a killing.

That strategy was maintained and added to in the ensuring months giving the SBS Treasury annual returns of above 19% on its $500 million liquids portfolio.   This generated some $25 million in profits for the SBS up to the end of May ’88 when the SBS financial year ended.

As at the end of March ’88 – those profits were in excess of $23.5 million – some $8 million coming in Mar ’88 alone after the ‘sting’ against the Sydney Futures 10 year Bond contract …

This $8 million monthly profit was the final straw that broke O’Neill’s patience.  He had to find out how the SBS were making their money – his own Treasury was floundering and going ‘risk adverse’ to try and stop the losses.  In the back of O’Neill’s mind was the comment from his own Treasurer – Phil Gray – “that the SBS profits were not real.”  So this ‘audit inspection’ was supposed to uncover how the SBS was covering the profit facade.

To Gray’s surprise the SBS records were accurate and represented exactly what had been stated and recorded as profit performance.  In a parting comment made by Steve Heald to the SBS Fixed Interest Dealer – Mr Heald said –

“… from what we have seen and uncovered – all we can see is that you guys have made a shit-load of money.”

This outcome made the O’Neill camp more frustrated – Gray produced his report and a copy was delivered to the SBS on the 19th Apr ’88 – almost at the same time as the Macquarie Bank Report – (MBR) was delivered.

Prior to the SBS’s receipt of Mr Gray’s report and during the last days of the SBS Treasurer’s annual leave – he was told by Cleary to extent his leave for another three weeks.    This was another strange request and made the SBS Treasurer feel even more uncomfortable with what was going on.   Cleary had been adamant that the SBS Treasurer stay away during his leave and this new request to extend his leave gave clear indication that not all was right with what was happening as a result of the Audit.

As part of this extended leave arrangement, it was arranged for the SBS Treasurer to attend an ‘options’ course in Chicago on Bain Refco’s dime.  He and an operative from Bain Refco departed on that trip the day he arrived back from leave with his family – 11th Apr ’88.

The most recent contact with his Treasury staff at this point indicated that the Audit was completed and there seemed to be a clean bill of health.  They had no idea why he had been asked to extend his leave.   In conversations with Cleary during recent times – and in response to direct questions about why e requested the SBS Treasurer to stay away – Cleary has stated that O’Neill was wanting blood – and he wanted to sack the SBS Treasurer.   This some 22 years later – there is more to this than what has been exposed or to what Cleary has been prepared to disclose.

This makes no sense – the SBS Treasurer knew there was no wrong-doing – the Audit revealed no surprises and everything was as it was purported to be.   Why would Cleary want the Treasurer to stay away?   Why also was he not interviewed by the audit team to explain the SBS Treasury activities?  The trade structure into the futures closeout was history – yet when the Audit report was read by the Treasurer after the May 5th SBS Board meeting – there was nothing in the Audit report that could not be explained or exposed as a misrepresentation, or distortion of facts.  It contained outright assumptions that were based on lies, it made accusations that had no foundation – the Audit report was the  seek-missile that O’Neill needed to get rid of Cleary.

There is only one explanation in why the SBS Executive could not refute the Audit Report claims.   Cleary and his Executive team panicked – when O’Neill declared that he was coming after Cleary  for ’cause’ – the penny finally dropped for Cleary.

Whilst Cleary had been basking in the success of the SBS Treasury profits and seeing his SBS grow $400 million (40%) in the previous 12 months – Cleary believed he had the wood on O’Neill.  Cleary had his own SBS Audit officer – Mr Tony Page keeping an eye on the SBS Treasury activities.  What Cleary though he knew about the SBS Treasury operations and based on what Tony Page was feeding him as to strategy and performances – it was a case of the blind leading the blind.

O’Neill was hiding his own Treasury ignorance behind his own Treasurer in Phil Gray,  and using Gray’s summation of the SBS Treasury operations as contained in the Audit report to bluff his way into having Cleary admit his own ignorance.

This was such a hypocritical exercise – in all the months of the SBS reporting their monthly profits – the SBNSW Appointed Directors including O’Neill and Kearns – were all aware that the SBS Treasury had no formal Limits.   This lack of Limits became O’Neill’s hook that forced Cleary to fall on his sword.

Since he first joined the SBS – the SBS Treasurer had raised the subject of Formal Limits with his immediate superior – Paul Ogilvy – who left in Feb ’88.

Mr Ogilvy was not replaced until mid April ’88 whilst the SBS Treasurer was on leave.   Mr Ogilvy kept brushing aside questions on Formal Limits and in the end the SBS Treasurer structured his own internal limits as a backup strategy.  This was not the best answer – but it offered some internal integrity to what was a very exposed situation.

If The SBS Board and Executive Management did not think Limits were necessary – and despite efforts to convince them otherwise – the SBS Treasurer took it upon himself to structure his own limits and give the SBS some internal mindset protection from excessive risk undertakings.   The SBS Treasurer had always operated under Limits in all his previous employs – his Management experience dictated there should be limits and he tried to get his Management to agree.   He can be blamed for not trying harder – but when the profits started to roll in – limits weren’t altered – they became targets to use and he used them to extreme success.   None of this appears in the Audit report because he was not asked by Gray, or anyone else associated with the Audit report to contribute or answer questions.

After the Gray Audit Report – O’Neill made it clear that he was coming after Cleary with all guns blazing.  Yet – if Cleary had of held his ground – if he had of recalled his Treasurer to defend the hypocrisy contained within the Report – what happened would not have gone down as it did.    Even Phil Gray and O’Neill did not understand what the SBS Treasury was up to – the report uncovered nothing of importance or incriminating.  Cleary was just too proud and egotistical to recall his Treasurer to defend his knowledge base against the misrepresentations made in the Audit report.

O’Neill was allowed to bluff his way to have Cleary believe that he fucked-up.   Cleary knew no different and fell on his sword – he was out of his depth completely just as were all the other SBS Board members and Executive Management in understanding what had happened in the SBS dealing room.

They had all sat back and saw the profits – some with smiles [the Independent Directors] – and the others [SBNSW Directors] with scowls.   The SBNSW wanted the SBS profits.  To this day nobody got what happened or how the SBS made its profits.  It is the reason the ‘Balls like and Elephant’ story was written.


Part 6 … continues – The AUDIT Report … the biggest con ever played … see below for link …


Link to all previous chapters for –

“Human Evil Exposed – John O’Neill (CEO-ARU)” – The SBS Story


The EYE-BALL Opinion … Without Prejudice …

  1. dækning
    August 30, 2012 at 7:02 pm

    I’ve been absent for a while, but now I remember why I used to love this web site. Thank you, I will try and check back more often. How frequently you update your website?

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