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EYE-BALL’s Harry’s Growl – 17th Jan ’12 Update – The US Election campaign …

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Title:
Harry’s Growl – 17th Jan ’12 Update –
The US Election Campaign …

Happy New Year one and all  …
The Australian political year has started with a whimper.  All the attention is on the US’s Republication campaigns on the road to the Whitehouse elections later this year.

Watching the media spin on the candidates brings to mind a theory that has filled my head space every time an election is in full swing.

Who Investigates US Presidential Campaigns?

Having watched ‘The West Wing’ several times – with particular affection for the Series 7 Presidential campaign – US politics excites like no other. Our own campaigns are stoic affairs with little glitz or glamour and in all honesty – perhaps no glitz or glamor should be the way election campaigns should be waged.

The issue is that US campaigns are like a ‘soap’ show – viewers and persons interested want the claw scratching, they want the sex scandal, they want the stand up knock ’em down public brawls,  it has become a TV debateathon and all candidates can only lose in that arena.

No – American politics is on the nose and fast approaching skid-row in creditability terms. The issue at stake is every other Democratic Nation is following the same lead as American political campaigns.   The vetting process has to be extreme – nobody disagrees with this – but the media are so invasive that we now look for candidates who trim their pubes for when and if they get caught in a backstage moment of lustful stress relief.

How did Politicians get elected before full on media focus?  The media coverage has made it easier for candidates to sell their message – every public appearance is a photo-op – the hand shaking, baby kissing, children in schools opportunities, the hard hats, bicycle briefs, the shovel in hand, every photo-op is an opportunity for candidates to portray an image they want sold to the public.

Does anybody stop and think about this for a moment – is the media persona really the true character of the candidate?   Who outside the inner trust circle of a candidate gets to see the real person?   Politics has become about media coverage and the personalities and players who only let you see what they want you to see.

Without media coverage Politicians of a long ago time went out into the dark streets and homes of potential electors and courted support in a direct manner.   Now TV producers can make or break a candidate with a slanted image or story.   The media have so much power and in that context – there has been much debate on media ownership and its influence in political campaigns.

The many parliamentary enquiries into media ownership in this nation had still left us with condensed ownerships.  The ongoing UK enquiry into the ‘News of the World’ scandal is evidence of just how media is connected with Government and the personalities who sell the Governments message.

Murdoch press is such a major player in UK, US and Australian politics – that block of Nations can pretty much control the UN, NATO, ASEAN, and other economic summits – the dye is always cast when it comes to Murdoch and who he supports in election campaigns.

The question has to be asked – with all the enquiries on media ownership laws – who investigates ethics and associations in any electoral campaign?   Who investigates the standards and the integrity of the media in any electoral campaign?

Every one of the Republican candidates has been groomed and plucked to an inch of plastic improvements – it is more than likely that some have even taken that step – but the necessity to have ‘sex appeal’ in front of the camera is so demanded of front-runner Political candidates that TV producers and directors need to be re-schooled on integrity and moral boundaries.

All of us demand our news in smaller doses – the repeat format of 24 hour and hourly news deliverers mean we only play scant attention to headlines – listening for a new story and new imagery with new dialogue – media political coverage goes on the nos every quickly unless it had connectivity – boring candidates and oral delivery make for poor ratings and advertising appeal.   This very commercialisation of political campaigns huts us all in that we don’t get the good candidate as much as we get the candidate with eye-candy appeal.   We will never get the best candidates elected in the media format of current political campaigns.

It’s all reversed about – candidates spin their message to suit media coverage – not media coverage forced to cover all candidates without prejudicial cutaways and shock value footage to sway public opinion.   Who investigates the ethics involved in these messages?

Defamation rules are thrown out during electoral debates – that is why a law degree is mandatory for most prospective pre selection choices – yet the voter wants a slanging match – the process has become combative because that is the way media wants to sell electoral campaigns.

Advertisers are more demanding of how they spend their budgets – and media outlets have to juice it up to ensure advertisers stay loyal … in this scenario who looses out?

The whole Nation does and at every level of public office – coverage is not about candidates unless their able to sell advertising space.  Who determines the space fillers?

That then leads to the reduced coverage of genuine alternative candidates and that in turn yields elected officials who behave like movie stars with not a bit of substance on real policy knowledge.   We as a civilisation have created this – its part of the reason for the current backside of the slippery slide value of life on this planet.

Take for example – the matter of Craig Thompson as a Member of the Australian Parliament – is he a moral person?  Who of us would know?

That is not to say that I’m more moral – it’s just that I would never run for public office because in my mindset I am not worthy – but is Mr Thompson worthy?

His alleged crimes are serious and he held the balance of power within the Gillard Government most of last year in the face of calls for his resignation.   Should he have gone?

Well the word is that he will go this year – but what is the integrity and moral reward  behind that timing?  By all means be accountable for your actions and do what you have to do – but hold on a minute – lets wait on that until we can get an extra vote to make sure we retain Government!!!   Where is the moral lesson in that approach – and we all wonder why politicians rank lower and lower as each year unfolds.

Who will raise standards – as opposed to the lowering of them?   Without and oversite sheriff – all we can expect is for it to continue its current path … and we all have some idea where that might be.

This is what politics has become – rainbow morality pitched in line with differed agendas within agendas that suit personal agendas.

The media flip-flop their coverage to which has more advertising appeal.  This time last year Australia’s TV screens were 24/7 about the QLD and Victorian flood carnage.   Yes the local loss of life was tragic – yet South American and Philippine floods caused well over 1000 deaths at the same time and the media coverage was a 30 sec story on every other news broadcast … and then it was back to the live footage of the heartbreak and devastation caused by the local floods.

The Republican campaign is in full swing – and of little interest to most Australians.  Yet those who are engrossed get little coverage other than summary updates for Aussie based US correspondents meeting a pressured deadline to meet early morning Australian news broadcasts.   How can real opinions be formed on the US Republican campaigns based on these scripted and edited 30 sec stories?

The question should be ask of all Governments – why have media ownerships been allowed to evolve the way they have?   Why is there no investigation into media coverage of electoral campaigns?   How can political campaigns be made to have more direct interface with non mainstream or party faithful rally’s?   It’s a big ask – Politicians can do a letter drop because taxpayers fund it – if they were forced to spend that expense in other ways that allowed the crowd heckle and questions from the floor – in that environment the cabdidate can never control the media outcome if he/she gets it wrong.

What does the letter drop educate us about a candidates ability to think quickly and act independently?   How can we get the odd-looking and quirky style candidates to a media podium so we can really hear their message?

We all deserve the electoral process we currently have because we all collectively don’t give a shit.   Well – that attitudal framework has given us the Government we all deserve – there are candidates out there who won’t run because they don’t get a chance under the rules media outlets adopt to appease owners and advertisers.

There needs to be a full investigation into electoral campaigns to level the playing field for independent candidates and candidates with less sex appeal than the ‘Ken and Barbie’ prototypes that Party politics want and promote.

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Click here to read previous Harry’s Growl posts …

Harry’s Growl …

 

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EYE-BALL’s Human Evil Exposed – John O’Neill (CEO-ARU) … Part 6 – The Phil Gray Audit Report …

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Title:
Human Evil Exposed –
John O’Neill (CEO-ARU) … Part 6


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.

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Part 6 commences … The Phil Gray Audit/Inspection Report …

When John O’Neill decided to push the go button on his merger plan – he needed ’cause’ to be in a position to sack the SBS GM – Denis Cleary.

By Anzac Day 1988 – the 25th April and after the Phil Gray Audit report had been delivered to the SBS – Cleary knew he was in trouble. The SBS Treasurer was still on extended Administration leave insisted upon by Cleary – and still 10 days away from returning to his desk.

During the research phase of this project – it was revealed by two senior SBNSW sources that O’Neill received a phone call  advising him the SBS had huge futures and option positions, and that he might want to investigate the holdings. Whether that ‘whistleblower’ phone call was real, or a fabrication is still to be determined.  No evidence can be found other than heresy – all emanating from O’Neill.

However – according to Paul Kearns – the SBNSW Legal Counsel and O’Neill’s former boss – it was someone from the Reserve Bank of Australia (RBA) – and according to Mr Phil Gray – The SBNSW Treasurer – it was someone high up in the Futures industry.   Both were relying on O’Neill’s telling of the phone call as the source of the information.

The fact that these two high-ranking SBNSW Executives had different stories – and both adamant that they had the key – gives some realism to an alternative theory.  Perhaps there was no initiating phone call – perhaps it was all a part of O’Neill’s grand master plan to find ’cause’ to sack Cleary, to get inside the SBS Treasury operation and have a look at how the profits were being made.   This later reasoning sounds more like O’Neill’s modus-operandi given how he played future plots in this massive FRAUD.

Research undertaken to track down the ‘deep-throat’ was extensive – some six months chasing down an RBA employee who had a close relationship with the Co-operatives Dept, and given up as the most likely person who would have made such a phone call – that same person is still a person of interest, he is connected with the ‘Securency’ note bribery scandal and has gone to ground.

The RBA story was deemed the most likely because in the days before the SBS Treasurer went on leave at the end of Mar ’88 – the RBA contacted him and requested a meeting.  The meeting was a low-level meet with two RBA Executives and there were no red-flags raised.   The RBA were enquiring into the increased levels of SBS holdings in Commonwealth Bonds and wanted to know if it was likely to continue.  They were offering tender options whereby the SBS could tender directly on future CGS Bond Issues.

The real reasons why the SBNSW saw a need to investigate the SBS Treasury is a story for John O’Neill to tell in due course.   Whatever his reasoning was – he did had mitigating and extreme motives – he wanted to regain control over the SBS Board lost under his watch some eight months earlier, and he wanted to merger with the SBS more than anything else – he could not have the merger unless he controlled the SBS Board.

Whether he used Phil Gray to carry out that inspection as a means to deliberately fulfil his merger agenda is still conjecture – but largely believed – in any scenario – without the Audit Report O’Neill’s move against Cleary would have had to come from some other avenue.

In a series of E-Mail exchanges with Mr Gray during the research phase, the parameters of that Audit/Inspection were somewhat revealed along with other responses to questions that were asked.  Those e-mail messages are pasted below to provide authenticity and to establish Phil Gray’s creditability …

I believe Phil Gray to be a man of integrity – more so than Paul Kearns who was the legal opinion and promoter behind  the flawed formation and structure of the SBS as far back as the late 70’s – and again all through the court case with the CSB through to late ’87.  His motives were always aligned with O’Neill’s – whereas Mr Gray had only been with the SBNSW since Sept ’87 – and his knowledge of what had taken place before his employ commenced, left him as a possible ‘stooge’ in the game doing O’Neill’s bidding.   In fact, Mr Gray explained his status and position in direct terms in his e-mail exchanges – [see below.]

Kearns took over from O’Neill as Chairman of the SBS in July ’88 and only after O’Neill was forced out over ‘conflict of interest’ issues – primarily because he held Board Directorship’s on both the SBNSW and SBS Boards.   With Kearns’ appointment as O’Neill’s replacement SBS Chairman – the real ‘conflict’ was never resolved, and he remained Chairman throughout O’Neill’s end-game agenda and right up until the sale to St George was completed.  It was ironic that Kearns was still there until the end – as he had also been there from the start.

Mr Kearns also exchanged several e-mail messages with the researcher – his responses were always seen less than genuine despite undertakings and promise’ made to offer up his side of the story.   All through those exchanges he was holding out for what source information had been uncovered.   As soon as the questions became pointy – he did what was expected of any ‘snake in the grass’ type personality and ran for cover.  To this day – he remains as guilty as sin in the eyes of the researcher – and just as culpable and responsible as O’Neill and Greiner for the Corporate RAPE and FRAUD committed against the SBS Members and staff.

The E-Mail messages responses from Mr Kearns and Mr Greiner will be uploaded in future posts.  Both Mr O’Neill and Mr Kearns will have their own individual ‘Wall of Shame’ document and comment posts.  As this story delves deeper into events that happened after the May 5th Board meeting – all revealing Kearn’s, Greiner’s  and O’Neill’s complicit actions,  the documents and sequence of events will give cause to further events – and it is envisaged that that will include future and intended action that will ultimately determine their collective fates.

In the Interim – Mr Gray’s E-Mail responses appear below:

From: flippnlorry@gmail.com [mailto:flippnlorry@gmail.com] On Behalf Of Phil Gray
Sent: Friday, 29 October 2010 8:51 AM
To: bleyzie@bigpond.com
Subject: Re: Follow Up message

Ian,

WITHOUT PREJUDICE

I do not wish to respond to all the points you have raised – you are obviously hunting for a deeper and conspiratorial angle to my role which never existed. On arriving at SBS to undertake the review, I was advised by Cleary that you were on leave – whilst not explicitly stated, the impression, from the way in which this was conveyed, was that you were on normal recreation leave, planned some time ago (I do not recall being advised that you were on requested leave).

In relation to the events at the time, I will simply reiterate these points:
• My role, as commissioned by John O’Neill, was simply to review the trading and potential risk of the positions. I received no direction from anyone on the required conclusions of the report and, even if that had been the case, I would have written the report anyway based solely on the basis of what was observed in the data
• Despite what you say, the risk was assessed taking into account both physicals and derivatives – see section “Hedging Activities”
• The report clearly states that “acceptable risk” is a subjective assessment, but the risk conclusion was benchmarked to the risk policy utilised by State Bank, and assessed in relation to the level of SBS’ Capital and Reserves
• Once the report was delivered, that was the end of my involvement in this episode

As you seem to believe that I was part of some kind of conspiracy, or somehow partook in maligning your reputation subsequently, I would suggest you read the report yet again, with an objective frame of mind.

I will highlight some key aspects which I think are relevant:
• Management was fully informed of the positions (Editorial: that is, there was no suppression of the trading activities)
• “In general, the quality of records and portfolio details was good”
• “I have high regard for the quality of the Treasurer”

Thank you for raising this matter with me, I have nothing else that I wish to add or clarify for you.

Phil Gray

In an earlier E-Mail Mr Gray revealed his information about the ‘phone call’ received from John O’Neill.

From: flippnlorry@gmail.com [mailto:flippnlorry@gmail.com] On Behalf Of Phil Gray
Sent: Monday, 25 October 2010 8:40 AM
To: bleyzie@bigpond.com
Subject: Re: Re Phil Gray

Ian,

I am happy to provide some input, and would prefer to correspond by email thanks.

Certainly, my recall of events appears to be a little different to yours. That is not to argue that your version of events is wrong, rather it is it is probably a consequence of the fact that we both were receiving information and instructions from different people – John O’Neill in my case, and Cleary in yours.

The review was initiated after John O’Neill received a phone call from a senior figure in the futures industry (I am aware of the identity, but am unwilling to disclose) alerting O’Neill to the size of positions/trading held by SBS and querying whether he was aware and satisfied on these. He was unaware, and that led to the risk review being initiated by him. I have no reason to believe that the review was triggered by any other motivation, notwithstanding the final outcome.

Many years have passed, but my recall is quite clear that the review was not really focussed on the whether or not the accounts and reported profitability were correct (though it may well have been investigated for completeness). Rather, the review was very much a “risk review” around the prudency or otherwise of the positions. I recall concluding that SBS Executive were explicitly aware of the positions, indeed this was confirmed in face-to-face meetings with Cleary (ie there was no suppression or anything fraudulent about the positions that were held), the accounting was correct, but the positions were grossly excessive given the capital base of SBS. (On this latter point, we would probably have a different view – ie as to whether they were excessive – but there is no point debating that now, notwithstanding that this was the finding of significance from which the subsequent events flowed).

The review was undertaken by myself and Steve Heald (whom I think you know), there were no other staff involved.

I would be pleased to receive a copy of the report, it may trigger some other thoughts, and I will respond further if that is the case.

Phil Gray

In response to some specific points asked of Mr Gray – he responded as pasted below:

From: flippnlorry@gmail.com [mailto:flippnlorry@gmail.com] On Behalf Of Phil Gray
Sent: Monday, 25 October 2010 1:36 PM
To: bleyzie@bigpond.com
Subject: Re: Re Phil Gray

Thank you Ian.

WITHOUT PREJUDICE

As I do not subscribe to conspiracy theories, I have some concerns about where this is all heading, and will therefore offer just a few comments:

1) In seeking to identify the so-called “deep throat”, you overlook the fact that the Clearing House (and the SFE) at that time had the right to access individual client records held by a clearer or broker, if they had concerns about risk positions or undesirable situations. I do not know Hawkins, but I can say he was not the person named by O’Neill as the source of the initial alert.

2) You state that you were enraged when “Cleary told me in recent months that you ‘apologised’ to him for the report and that you mentioned, ‘you had been told to write the report as you did’” .You also mention that my integrity was ok, till you heard this from Cleary.

Whilst Cleary may well have said that, there was no such conversation: I can assure you that I don’t accept instruction from anyone on how to write a report, nor how to undertake an investigation. I will also add that in the final meeting with Cleary, and prior to my finalising the report, Cleary implored me “not to do a number on him” – and that was the only occasion when anyone tried to influence the conclusions!

Clearly, in writing your epistle, you better assess very carefully who you trust!

Now if you write that Cleary purported that “,,,,”, then so be it. But if you report the so-called conversation as if a fact, I will have to seek advice.

3) You clearly feel disenfranchised that “the strategy” was not discussed with you. Whilst you will not agree, the strategy was largely irrelevant, as the review was largely focused on the size of positions associated with that strategy, the potential risk, and the dollar risk relative to the SBS’ capital and reserves. Re-read the 2nd paragraph of the report to O’Neill.

4) Re the comment that O’Neill may have “set me up” to provide him the ammunition he required: perhaps, but I have no reason to believe so and have always and still do believe that O’Neill is a person of integrity. And in any event it would have made no difference to the findings and conclusions.

5) I have no recall of approaching you to work at SBNSW during the merger process? Perhaps Steve Heald (who held you in high regard) or some other staff member purported to be acting on my behalf, but I do not recall, sorry. I do recall the “proprietary trading” approach and which Steve Heald was championing on your behalf – I was completely uncomfortable with this for a number of reasons, the major one of which is that you wanted very large limits, and you wanted to take a significant proportion of the profits. But, of course, any losses would be for the account of the Bank. As someone who fundamentally believes in fair markets, this made no commercial sense to me at all.

To conclude, I believe there is little else that I can add, nor do I wish to debate whether “the strategy” is important to understanding the portfolio risks which were incurred.

By the way, have you had any contact with Steve Heald in relation to this, I lost contact with him many years ago?

Phil Gray

[A copy of the Audit Report was sent to Mr Gray in response e-mails to help him recall events.]

The researcher wishes to thank Mr gray for his contributions to date – and to let it beknown that there is still an open invitation for him, and any one else who can or wishes to contribute to this story.   The email address:  blogcomment@bigpond.com  – can be used to accommodate any contact.

During this Audit period in April ’88 the SBS and whilst the SBS Treasurer remained on annual and then administrative leave –  everything he had built up in the 10 or so months since he took on the Treasurer position – was now being torn down by the SBNSW without legitimate foundation or reason – or rebuttal from anyone who understood Treasury operations.  The only game in play was O’Neill’s frantic and almost manic want to merge the SBS with the SBNSW.   What took place can all attributed to this Phil Gray Audit/Inspection report and as commented on hereto – the Report was a complete mis-representation and based on ignorance and a total lack of understanding of what really did happen.

That report can be read in full using the links below:

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The SBNSW Report:  Page 1:

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The SBNSW Report: Page 2:

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The SBNSW Report: Page 3:

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The SBNSW Report: Page 4:

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The SBNSW Report: Page 5:

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The SBNSW Report: Page 6:

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Comments:

The importance of this document in the whole scheme of things cannot ever be overstated.  Because of the outcomes from this document – Ken Dennewald, Denis Cleary got booted – leaving the Deputy GM – Len Thompson as the only SBS Executive apart from two other GM’s.  Mr Thompson was sent on Administrative leave within days of the 5th May Board room coup for almost 2 months.   After that 5th May meeting – the SBS Board was again controlled by O’Neill and he appointed a GM from the SBNSW named Tony Howarth as caretaker of the SBS.

From that position O’Neill was able to orchestrate as he wanted until the Co-Operatives Department stepped in and investigated the happenings at the 5th May Board meeting.   But until that investigation was complete there was little that could be done to stop O’Neill and his intended game-plan.  O’Neill was now ‘McScrooge’ in control and playing GOD over how he was going to get what he wanted.

Before we go there in detail – [ i.e. Part 7 – the May 5th SBS Board Meeting …] – lets first have a good look at the Phil Gray Audit/Inspection Report in more detail and break it down and expose it for what it was.

The SBS Treasurer’s reading of the Report:

The SBS Treasurer was not given a copy of this report until after the May 5th SBS Board meeting.   The report was complied without any imput or conversation with the SBS Treasurer throughout the inspection phase.   When he became aware the Audit was in progress – whilst on leave on the 31st Mar ’88 – he immediately offered to return but was ordered to stay away.   In fact – a week into the Audit/Inspection he was again ordered to extend his leave for another three weeks to early May ’88 by the SBS GM – Denis Cleary.   His return date was to be the 4th May ’88.

When he finally had the opportunity to read the report after the 5th May Board meeting – he immediately knew the report had very little reference to the depth and breath of all the SBS Treasury activities during March ’88, or over the whole term of his tenure since Aug ’87.   It’s was a snapshot of the March ’88 end of day positions taken in a hindsight perspective, and based on one aspect of the overall SBS Treasury’s portfolio structure.  The Report gloss’ over the raw data and its realism, and primarily focused on the futures and option positions.  It did no justice to the breath and depth of the SBS Treasury operation or its innovative ‘risk management’ techniques.

The report painted a false picture and distorted the connectivity of futures and options and their role in the overall ‘risk management’ positions, and does not grant the concessions that had connective offsets against all the other SBS Treasury activities.   There were several components of the Treasury activities that were not commented on or formed any part of the report.    It is not known if these were deliberately left out – or whether Mr Gray did not receive any information on these activities from his Audit/Inspection team leader – Mr Steve Heald.

After the SBS Treasurer was finally received a copy of the report and was able to read it in the solitude of his office – all its fabrications and inaccuracies were immediately obvious to him.   He made notes as a means of containing his frustrations, all of the comments made would not have been obvious to any of the SBS Executive who tried to defend the SBS Treasury in the face of Mr Gray’s summary document.    There was no way the SBS Treasurer could trust anybody remaining or whom he was to report to after that May 5th Board meeting.  His arrival back in the dealing room on the 4th May was met with Treasury staff concerned and wanting to know what was happening.   The specifics of these events will be covered in future uploads.

For the moment the SBNSW Audit Report is the focus.

Page 1 of the SBNSW Dealing Activities Report:

Copies of any Attachments referred to throughout the report were not received as a part of the report to the SBS Treasurer,  and they have never been seen.

Page 1 – Parg 4 – states in part :

‘… With the exception of turnover in so-called forward contracts and options, I did not examine intra-day trading activity, only end-of-day positions.  Following discussions, the methodology proposed by the Society and subsequently adopted involved re-creating the various option positions (including details of strike prices and exercise dates) and is agreed by both parties to represent a realistic measure of the attendant risk.’ 

The phrases – “FOLLOWING DISCUSSIONS”, “SUBSEQUENTLY ADOPTED”, “AGREED BY BOTH PARTIES”  and “ATTENDANT RISK” stood out as coercive entanglement – i.e. Mr Gray was laying down his ground rules  and putting a noose around the SBS Executive at the same time.

These ‘phrases’ were the set-up – what ‘discussions’, what was ‘adopted’, who agreed to what ‘re-creations’, and what ‘attendant risk’ – were obvious questions the SBS Treasurer wanted answers to but there was nobody around to ask – they were all gone.

Why had Cleary and his advisors agreed with Mr Gray to these initial parameter settings?

Whatever took place during that discussion between Mr Gray and the SBS Executive at that introduction meeting – and given his charter from O’Neill – [see below] – it was clear what the inspection/audit was about – and the SBS Executive were already on a path that was about to about to lead them to their own hanging.

Nobody on the SBS Executive and at that meeting could refute or challenge Mr Gray’s treasury knowledge – it was like a ‘howdy-doody’ show where the ringmaster -[Mr Gray] – cracked his whip and the SBS pigeons all lined up in a row – said how high.  The SBS Executive were severely disadvantaged from the get go – they knew absolutely nothing in real terms and its realism about Treasury operations and Mr Gray was about to make them sing to his tune.

The term ‘adopting‘ as a research reference sets the policy structure and this would have been completely outside the SBS Executive knowledge base on Treasury matters – unless of course someone senior from SBS Treasury was there to advise them – this was not the case.

There was never any discussion with the SBS Treasurer in any time frame about these discussions issues, or the adopted methodology, or parameters in how the SBNSW was to carry out their inspection.     First impressions upon reading the report were that Mr Gray was writing the report with no counter input to any of the issues raised.   He had free reign and the SBS ‘mouse-like’ staff cowered in the face of Mr Gray and his reputation.  The SBS Executive had accepted and agreed the Society would adopt and use the SBNSW’s inspection policy relating to:

Page 1 – Parg 3:

‘ … the Bank’s Asset, Liability and Trading Committee (“ALTOC”) and draws on the statistical research of interest rate movements which was undertaken by Mr. Graeme Chambers of the Economic Research Unit.’

Mr Graeme Chambers was unknown to the SBS Treasurer – his authority or credentials were also unknown.  The Economic Research Unit could have been an independent organisation but was most likely a economic division within the SBNSW.  Mr Gray was suggesting that some body of researches who researched interest rate movements, were now some sort of benchmark authority that the SBS should listen to and accept in a retrospective expose.  This was Mr Gray’s comfort zone and his reality.

The SBS had correctly picked every interest rate move since before the Oct ’87 crash.  The ‘think-tank’ approach Mr Gray wanted to use was his knowledge base – and it was all new to the SBS Executive – they had no basis to object nor any answer to this ‘rail-road’ type approach.

Page 1 – Parg. 4:

‘…involved re-creating the various option positions (including details of strike prices and exercise dates) and is agreed by both parties to represent a realistic measure of the attendant risk.’

The words ‘attendant risk’ also stood out – ‘which parties agreed’ on behalf of the SBS – there was nobody within the SBS Executive who had any real depth of understanding to what ‘attendant risk’ really meant in market terms.

Mr Gray was being allowed to dictate his own terms of reference for his report and this severely disadvantaged the SBS.  Mr Gray was also implying associated, or contingent, or measured risk and he was using phraseology to confuse and intimidate the SBS’s Executive, and expose their lack of knowledge on Treasury functions and operations.   Nobody on the SBS Executive side was willingly going to admit they were out of their depth – this was an ego issue … and in the end their collective posturing failed miserably.   If Mr Gray had of put O’Neill in the same position – O’Neill would have also been an ‘Elmer Thudd’  – and as ‘thick as a brick’  as the saying goes.

These same shortcomings applied to all the current SBS Board members, including the four SBNSW appointed Directors that included O’Neill and Kearns.   Dennewald was connected with a Pitt St. Merchant Bank and he would have some knowledge – but he was not at this meeting.   Take Mr Gray out of the room and leave O’Neill and Cleary to face off against one another – it would have been like watching two men on Viagra trying to duel with eachother – neither could talk authoritatively on Treasury matters so it would have been all about ego and one up-manship.

The intent of this report was transparent from the outset – it was still early in the read but already it could be seen that it was designed to expose the SBS Executive’s weakness on Treasury matters and the attendant risk profiles that become associated with Treasury activities.   it was obvious in hindsight to now see through O’Neill’s plan – he had been intent in making Cleary the scapegoat for all the current and collective ignorance within the SBS Board’s past record on Treasury function and the absence of defined Treasury limits.

O’Neill needed Gray to expose the Cleary’s and the other SBS Executive’s ignorance on Treasury operations.   Not having the SBS Treasurer there to defend the SBS Treasury against the report was a risk O’Neill did not want to address.   But was it O’Neill’s or Cleary’s decision to keep the SBS Treasurer away for all of April – the truth on this matter is still to be disclosed – Cleary made the phone call – and has stated that O’Neill had threatened to sack the SBS Treasurer – but this is only part of the story that still awaits to be told.

O’Neill already had his fish-hook baited and Cleary was now at a full nibble – and was soon to be hooked completely.   He just did not know what was coming.

When Mr Gray alleged negligence and irresponsible risk profiling at the Treasury Operations,  and using soft and loose words to embellish and support what he called an ‘excessive risk’ profile – the Report became the link document O’Neill needed to sack Cleary for ’cause’.  Mr Gray was using market terminology well above the knowledge base of any non Treasury personnel.   Cleary needed an expert by his side – and where was the SBS Treasurer – benched for the duration.

Cleary has much to answer for in the ultimate demise of the SBS – he played his hand badly – and the help from his Deputy Len Thompson during this period was just as poorly advised.   If Cleary wasn’t going to recall the Treasurer – that should have been Thompson’s cue to step in and insist they needed an expert to help advise.

Comments Page 2:

Gray’s Comments from top of page 2:

Preliminary Observations:

The review requires the following qualifications or general comments:

  • Documentary evidence confirms that on 23rd March 1988, the General Manager approved interim dealing limits.  I have been advised that interim limits were actually approved on 3rd March 1988, though this cannot be either verified or disputed.  No analysis was undertaken of limit compliance prior to 23rd March 1988.
  • The interim limits distinguished between the investment and trading portfolios but no such distinction is made in the maintenance of portfolio records.  The Society argues that the physical portfolios are investment portfolios (and should be set aside for the purpose of a trading risk review), bit I am unable to confirm from an analytical point of view whether the physical portfolios are indeed investment portfolios, particularly as active trading took place on the portfolios during the period under review.  Attachment B summarises the end-of-day physical portfolio positions.’ …

The first point made in this passage was a complete fabrication of facts.   Mr Gray was reporting an outright lie – the SBS General Manager never ‘approved any limits’ – the SBS Treasury had no Limits in place despite repeated urgings to the AGM Finance before he left in Feb ’88.   The SBS Treasury had never had any defined or structural limits apart from the minimal requirements for size of liquidity assets.   Ever since the SBS was formed in 1982 – no Treasury limits existed.

This was an operational oversight many years in the making, and all structured under the SBNSW controlled SBS Board all through that time – with the exception since Aug ’87 when the SBNSW no longer controlled the SBS Board.

The SBNSW had just gone through their own limit review process arranged by Mr Gray,  Now – Mr Gray shows up and lectures the SBS Executive about limits that had never been a part of the SBS treasury operational procedures.  It was like trying to shut the hen-house gate after the fox had his fill.   Monday quarterbacking is a great gig if you can swing it – but this report had its own agenda and the SBS treasury operation was just the means …

Mr Gray stated he sighted “Documentary evidence” – someone was filling in the blanks before the questions were being asked.  Whatever evidence Mr Gray was talking about was either fabricated or documents that had never been discussed or shown to the SBS Treasurer.

Why did Cleary feel he had to manufacture evidence?

It was obvious the SBS Executive were in panic mode and playing with fire – they were handing O’Neill the SBS on a platter.

The ‘interim limits‘ spoken of above refer to late February and early March ’88 meetings between the SBS Treasurer and the Executive SBS Management, and were specific to the on-going futures close-out strategy.  At those meetings indications to possible moves in portfolio size volumes were discussed in non-specific terms.  The only numbers talked about in specific terms were the upside and downside profit forecasts.   advice was given that the SBS had already locked in $4 million of the $8 million forecasted profits.  Further advice was given that is the strategy came unstuck – the minimum profit would be $2 million after positions were unwound.  There was some discussion as to estimates of projected forward sales that might be used to manage the overall position.   But to construct some formal evidence of ‘interim limits’ was beyond the pail in this Audit/Inspection scenario.

What were they thinking?

The SBS portfolio was sitting above $500 million and had been there for some months.   No specifics about the size or structure of the Liquids portfolio were entered into – other than Cleary being asked directly if he wanted the strategy to continue, and him giving his approval to pursue the ‘Futures Closeout’ strategy.  This happened a week before the futures contract closed on the 15th Mar ’88.

How Cleary and his team were able to explain these away as ‘interim limits’ and produce ‘documentary evidence’ – only demonstrates the amount of rope Mr Gray was feeding to all the SBS Executives to hang themselves.   If the SBS members had any idea how there Society was being managed throughout this period – they would have wanted blood.

Cleary and his Executive team still need to explain how this ‘documentary evidence’ appeared, and how ‘interim approved limits’ were enacted.

An extract from the diary notes made by the SBS Treasurer after a meeting he had with the SBS Executive on the 29th February ’88 appears below:

‘Meeting held between the SBS Treasurer and Chief Dealer with Management group, namely, Cleary, Thompson, Don Watson and Tony Page. Meeting outlined the general strategy of the ‘market squeeze’ against the January ’98 Commonwealth Bonds and the March ’88 10 yr futures contracts.

 SBS Treasurer described in detail the inherent risk profile and exposure in fully committing to the trade strategy.  Further explained that the risk could be managed if the spread value was monitored and controlled.  Also explained how all the FRA contracts used to monitor and protect the spread trade, would all expire on midday on the 15th March 1988. 

Further explained what that meant in risk and exposure terms, and that all open FRA contracts would be cash settled against a benchmark settlement price – that settlement price was to be determined by the dominant physical stock that closely matched and reflected the futures trading platform – that stock would be the January ’98’s because that was the only stock trading as a relationship to the March futures contract.

Management all acknowledged that they understood this information.  No numbers were discussed other than potential profit ranges if squeeze play was successful or was discovered.  SBS Treasurer explained that it was still too early to fully commit to the strategy – and as the market edged closer to the 15th Mar ’88 closure date, price action would determine what action could and should be taken.’

As for the second string – Page 2:

  • The interim limits distinguished between the investment and trading portfolios but no such distinction is made in the maintenance of portfolio records.  The Society argues that the physical portfolios are investment portfolios (and should be set aside for the purpose of a trading risk review), bit I am unable to confirm from an analytical point of view whether the physical portfolios are indeed investment portfolios, particularly as active trading took place on the portfolios during the period under review.  Attachment B summarises the end-of-day physical portfolio positions.

Mr Gray was right – there was a short maturity structure and a long-end maturity structure.   As positions were liquidated the percentage size of each of these short and long structures varied with positional strategy along the yield curve.   Since Oct ’87 – the portfolio strategy had been largely targeted at the long end and specifically at the Jan ’98 maturity.

The SBS Treasury operation was not a Bank Treasury with a multitude of various derivatives and capital market type exposures.  It did not have an industry style funds management operation, or foreign exchange exposure and transactions.  Its deposit base customers owned shares equivalent to their deposit balances in the Society and it operated as a Co-Operative –  this made it entirely different to a Bank operation on so many risk and administrative levels.

The SBS was not lending for anything other than residential housing or commercial property ventures.   The Liquidity Portfolio was the management tool to cover all the daily and monthly operating costs of the Society.    In an extraction of SBS profits since its formation in ’82 – the largest share of profits came from the Liquids Portfolio and its return over cost of retail funds.   It can be argued that the business of the SBS – that being lending for residential housing was structured for the benefits of members as per the Co-Operatives mantra.

To give some validity to this assessment – an extraction of the SBS Liquids assets and its budged returns of 1% above cost of funds used to estimate the Treasury contribution to the overall SBS gross profits. The extractions for the SBS Treasury can be seen from the table below:

[This is a raw extraction based on end of year numbers – it is not 100% accurate, but for the purpose of demonstrating the point that the Liquids performance dictates the overall profitability of the SBS it is quite accurate.]

Mr Gray’s ‘interim limits’ comments again talk in circles and try and connect the SBS Treasury operations with the protocols and structures of the SBNSW Treasury operations.   Why would he measure and use similar yardsticks for the Treasury operations of a Bank with those of a building Society?

A Bank Treasury and a Building Society treasury function are like chalk and cheese – in regulatory terms, in settlement and commerce arrangements, and in funding requirements.  Aligning them up under Mr Gray’s viewpoints was very prejudicial to the SBS Treasury operations.

Turing to the obvious – the SBS treasury was very profitable and the SBNSW was not – secondly the SBNSW had all sorts of regulatory Banking protocols to conform to that the SBS did not – thirdly the SBS was a Co-Operative where members shared in the benefits of the Societies profits.

There were many others – but this audit/inspection was about finding out the SBS futures and options holdings, its strategy, and its overall risk profile.   It could never be completed or done accurately without information and guidance from the SBS Treasurer, and for Mr Gray to think otherwise or that he could do any reasonable reconstruct without the input from the SBS Treasurer – meant he was yanking his own chain – or was that Mr O’Neill’s chain.

Review of SBS Liquids Portfolio Aug ’87:

When the Liquids portfolio was first reviewed when the SBS Treasurer started in Aug ’87,  he knew immediately that it was an old style investment portfolio that relied on buying a security at the best yield on offer and generally holding it through to maturity.   The criteria for purchasing such a security was that it complied within the Legislative Investment guidelines the Society’s could invest in.

The Aug ’87 SBS Liquids portfolio was invested in the most obscure of stocks, one that comes to mind was something called Northern Territory Abbatoirs, and guaranteed by the NT Government.  If the Society needed to sell this type of security to meet withdrawal demands over and above its immediate cash position, the Society was at significant risk of inheriting a capital loss, or in a worst case scenario – not being able to find an immediate buyer for the security.

This was the way the SBS Board had approved Treasury investment guidelines since it was formed in 1982.   As this SBS Board control rested completely with SBNSW appointed Directors up until Aug ’87  – their own Banking expertise was reflected in this existing and ongoing policy of investing.   This all altered after the appointment of the SBS Treasurer in Aug ’87.   Lengthy discussions were held between the SBS Executive and the new SBS Treasurer before they agreed to a new approach to managing the SBS portfolio.

For O’Neill via the Phil Gray report to now get on his high horse after the SBS suddenly turned their performance around – making some $20+ million with the new portfolio management structure – O’Neill and Mr Gray would have been better off tapping into the SBS Treasurer’s expertise and knowledge base to try and improve their own Treasury performance.

As part of the immediate overhaul when the new SBS Treasurer arrived – he completely restructured the portfolio with Managements approval during Sept-Oct ’87 and before the Oct 19th Stock market crash hit.  Before approval was given to the restructure – he went to great lengths to explain the inherent risks to the Society in investing in illiquid assets/securities.

As history proved – this restructure exercise saved the Society $10’s of millions of dollars in unrealised and revaluation losses after the ’87 crash.   These losses would have happened had a significant run on members deposits eventuated as a result of the crash.  From what Mr Gray was not saying in his report, that being the real story of the restructure and where the SBS liquids portfolio now stood as a result, the SBS Management had largely forgotten this restructure as well and never even raised this issue.

OTC’s – Over the Counter Options:

Mr Gray’s comments mostly relate to exchange traded futures and options activities.   Yet the ‘Over the Counter’ options OTC’s – that were a daily risk management tool the SBS Treasurer used were never included in Mr Gray’s summary calculations – these were offset positions that yielded overnight protection.   This was yet another misrepresentation contained in the report.

The type of hindsight risk profile Mr Gray was building against the SBS Treasury operation was not industry standard Auditing.   None of the SBNSW staff doing the Audit/Inspection were recognised Audit staff.  Mr Steve Heald was a Treasury operative and had worked with Mr Gray previously at Australian Bank.  His tenure with the SBNSW was also aligned with the recent appointment of Mr Gray – [Sept ’87].

During the eighties there had been several ‘deposit-runs’ on Building Societies across Australia that saw them fold and/or become part of a Bank or another Building Society because of liquidity problems. This was mainly because their ‘liquids’ could not be liquidated to accommodate the deposit redemptions without erosion of the Societies capital holdings.   The SBS Treasury portfolio was quite possibly the best structured and managed portfolio in all of Australia at the time Mr Gray did his audit – his report makes no comment on these aspects of the portfolio.

How Mr Gray’s summations and recommendations for the SBS would have compared with a similar review of the SBNSW’s portfolio, and that of other Building Societies, and at this same time – would have been most interesting.

Maybe Mr Gray knew nothing about O’Neill’s overall agenda regards Cleary and the SBS Board control – the end result was that this report gave O’Neill the ’cause’ needed to sack Cleary.

The over-riding question that still haunts the SBS Treasurer to this day – is why Cleary ordered that he stay away for that three week period from 11th April through until early May ’88 – and during a time when the SBS had the lifeblood sucked out of them – triggering a slow and painful death ending in the sale of the SBS to St George in Aug ’88?

Phil Gray Report Continues … Page 2 –

Risk Analysis:

The key results are summarised in Attachment C which uses a refined analysis under the following interest rate scenarios:

Typical Move:

  • Bonds: 0.30% p.a. overnight move,
  • Bills:  0.75% p.a. overnight move.

It is also observed that, according to our research, the ‘worst’ moves during 1987 were as follows (and in fact, occurred on about four days during the year):

‘Dramatic Move:’

  • Bonds:  0.60% p.a. overnight move,
  • Bills:  1.50% p.a. overnight move.

Whilst we have not undertaken formal analysis of the potential trading risk in this latter case, we know that the risk will be at least twice that shown in Attachment C (due to the accelerating delta ratios on options positions).

Based on this analysis, it is noted that the Society’s overnight capital risk during the period 4-8 March (which included a weekend) was in the order of $10 million and would have been a least $20 million had rates moved by the same magnitude as the ‘worst’ day in 1987.

For the period till 23rd March, the average overnight risk was $5 million.

It is noted that the interim limits if utilised, would accommodate overnight risk of about $8.5 million based on a 0.30% p.a. movement in bond rates.

Honestly, as these ‘Risk Analysis’ comments were read, re-read and absorbed – all this poppycock word association and veiled threat analysis was giving a clearer picture of what sort of Treasury operation the SBNSW was now running under Phil Gray.

Mr Gray’s synopsis did not scare the SBS Treasurer – nor did O’Neill for that matter.   Gray was again applying his own form of conservative ‘risk-profile’ management, and using it retrospectively to hindsight judge the SBS Treasury portfolio in ‘what-if’ type scenarios.

The SBS Treasury had kicked ass – perhaps Mr Gray should have taken a leaf out of the SBS Treasury book and learn something about ‘risk management’ – hang on a moment – he did!

Mr Gray approached the SBS Treasurer with a position to Manage all the SBNSW risk exposures after the SBS Management had been sacked.  The SBS Treasurer never had to turned him down – Mr Gray knew the position he wanted for the SBS Treasurer and it was a very interesting approach.  It was made with some provisos’ – they all being about getting his own Treasury staff to yield up their own discretionary limits.  But Mr Gray could not sell it within his own Treasury Management group.  The formal offer was never made – but Mr Gray exposed his underbelly in that he had seen the SBS Treasury operations first hand – and he wanted the SBS Treasurer to come and work for him.

With that sanction and approval in mind – all Mr Gray’s comments have to be read with some scepticism and clouded assessment as to whether he really believed everything he wrote in the report.   This report was not aimed at the ability of the SBS Treasurer or the current ‘risk profile’ of the SBS Treasury – it was aimed at the SBS Management and Mr Cleary in particular.   All the heat in the SBS Portfolio was gone by the 15th Mar ’88 – and this report was happening some 3-4 weeks later.

In further reference to the ‘Risk Analysis’ comments in Mr Gray’s report highlighted above – the interest rate moves Mr Gray use to highlight his theory related to the extremes of the Oct ’87 crash.   The same period when the October crash saw the equity market correct itself in a way that had not been seen in almost 60 years.

You don’t think he was loading a pistol with a cannon ball to make his point.  1987 was a year of many extreme moves – the point being that the SBS was on the right side of all those moves.   Yet – Mr Gray’s bean-counter extractions show once again how he was helping to line the SBS Executive up against a wall – and daring them to defend the past performance of the SBS Treasury against his ‘dooms-day’ type projections.

Volatility:

This was low-ball commentary – every dealer worth a pinch of salt knows and understands volatility – it’s a bit like being a bookmaker – no … its exactly like being a bookmaker – as a trader you take on and embrace the risk to know where the risk is and coming from.  Avoiding some huge punter for fear you might lose is no way to play the game – take on the risk and you own the market’s risk exposure and from there all you have to do is manage that risk by spreading it over other assets – i.e.  in bookmaker terms – spread the risk over the other horse in the field.

Hell – this volatility was why the SBS was having so much fun in making all its money – it owned the risk and was managing it in a way that was controlled, and whilst the interest rate trend remained bullish until the March ’88 futures close-out – there was never any real risk exposure that was not already covered any and whichever way possible.

Mr Gray and his helper Mr Heald – had no way to report or structure an answer to this type of Treasury operation – they had never seen it before.  I fact they never saw the real SBS treasury purpose in its futures and options positioning.  Of course the raw numbers scared them – hell it would have scared everybody – but if they had of asked the right person – then they might have got it – they might not have understood it all – but they might have learnt something.   they were sitting on this great big scandal with keys to expose the ‘futures sting’ of the decade – yet the didn’t see it or get it.   That is a reflection of the base level creditability that can be attached to this report from the SBS treasurer’s perspective.

Hell what the SBS Treasurer did – was not supposed to be able to happen – if the regulatory SFE staffers had of got a hold of what actually happened the whole ‘non-deliverable’ aspect and integrity attached to the 10 year bond contract would have been blown away.   Mr Gray was sitting on the SFE Compliance committee when the recent contact with him happened.   When this story was exposed to him – he had no comment as the above e-mails can attest to.   Mr Gray’s comments were like a kindergarten reading in the big-picture and the big-league that the SBS Treasury was operating in.

[If you want to know more about how the SBS profits were made – you can read all about it using this link to –  ‘Balls like an Elephant’ – a non-fiction novel account of the SBS Treasury operation during this period.]

Overnight Interest Rate Moves:

Yes – the overnight interest rate moves Mr Gray highlights in this report did occur – but the risk exposure was no greater for the SBS than it was for every other Investment portfolio that took on naked interest rate exposures.  That just happened to be almost every Investment Fund and Bank in the world.   Mr Gray picks on the worse overnight move during the October ’87 crash, and uses it to paint a picture where the SBS would have incurred a negative revaluation exposures of $20 million.

What was the SBNSW’s exposure on the same day – or any other Financial Institution for that matter?

If the SBS compared its overnight exposure with the SBNSW’s on that same day – the SBNSW would have been in the crapper like so many other Banks throughout Australia and the world – and yet low and behold – the SBS survived intact and was operating its business as usual – there was no hiccup – the crash presented once in a year type opportunities and the SBS portfolio was structured to take full advantage.    You could call it luck – by the crash was coming and the reason for the portfolios hasty restructured – in timing terms it may have been luck – but then the skill needed to take advantage of the opportunities still had to be implemented.

Mr Gray’s numbers were purely a scare tactic and they did spook the SBS Executive – by this stage of the report Cleary would have been almost ready to fall on his sword – and the report was only into its second page.

The reality of the ’87 crash scenario was the Society reported a trading profit of over $1 million for the month of October ’87 – and had positioned itself in Commonwealth 10 year Bonds above 14% in yield terms.  That position was as pure laden as gold.  In addition, whilst the revaluation in the portfolio the day after the crash was negative, by month’s end it was substantially positive because the portfolio had been liquid and was repositioned quickly to take advantage of the high yields on offer.

Hell, SBS made more money because of the crash, not losses.  Who was Mr Gray kidding – and yet – the SBS Executive were the ones left standing trying to defend the SBS Treasury’s operations – all like innocent lambs to the slaughter.

Mr Gray’s dramatics in using words like ‘typical’, and ‘dramatic’ in demonstrating interest rate movements, were word-theatre, and intended to make un-knowledgeable and inexperienced Directors and Executive Management types quiver in their boots with the prospect of moral and fiduciary responsibilities.  There overall importance was nothing more that bean-counter terms and were better used to access corporate debt exposures and serviceability on loan applications.

Mr Gray’s analogy was like applying a rider to a home loan application in a scenario where the family income was reduced by a factor of 20% and then at 40%, to see whether they could still afford the loan.  The decision to either make the loan or decline it would depend on whether the loan could still be serviced under those complying conditions.   If that analogy was applied to every investment security prior to purchase, and then analysed and subjected to the capital loss exposure if interest rates moved negatively, nobody would ever buy a security, or a house or take out a fixed rate loan.  This report cuts to the very core of Banking and understanding that Banking is ‘Risk Management’ and if you avoid all risk, then you cannot call yourself a Banker.

Mr Gray spoke of ‘interim limits’ in his ‘Preliminary Observations’, limits that were never in existence but applied for the purpose of his Audit, and then he presumes to make statements about overnight ‘capital losses’ based on a SBNSW research committee report on possible interest rate moves.  The creditability of this report were as false as O’Neill’s credentials to be the MD of the SBNSW – yet this report was toxic for the SBS Management and it was what sunk Cleary.

Again the Question – why did Cleary not recall the SBS Treasurer to defend the SBS against the summations contained within the Report.

Continues to Page 3:

Hedging Activities:

By comparing the daily risk on physicals with the daily total risk position (by deduction, the difference reflects trading in non-physical instruments), we can examine the extent to which non-physical trading was used to either hedge (offset) or leverage risk.

Apart from four days, for both bill and bond trading, non physical trading was used to leverage the trading risk of the Society.

It is noted that intra-day trading in ‘forward’ bonds was high.  For the period of 1-30th March, a total of 24,647 contracts were traded representing 3.8% of total market turnover.

The level of intraday trading in bond options was especially high. For the same period, a total of 16,958 contracts were traded, or 10.7% of total market turnover.

Once again Mr Gray is dealing in layered and degrees of deception.   For every futures contract traded, there is a buy side and a sell side. So when he comments, ‘a total of 24,647 contracts were traded representing 3.8% of total market turnover’,that number of contracts represents only 50% and not 100% of the completed transaction. Therefore the 3.8% was really only 1.9%.   [To defend Mr Gray’s comments – this was possibly just an honest error within the report …]

The futures and options numbers Mr Gray mentions sounded right from SBS’s side of the transaction.   But to try and make mileage out of the size has no relevance unless they are benched and offset against all intra-day positions – including physicals and forward purchases and sales, and any movement an re-positioning in the maturity structure of the physical and forward positions within the portfolio.

Mr Gray’s report mainly focused on the futures and options activity.  How could the risk exposures of the futures and options position be taken in isolation and used to create the illusion for readers of the report that the SBS Treasury’s risk exposures had no mitigating offsets.   Mr Grays risk exposures were wrong on so many levels.

How could Mr Gray make the comment – ‘trading was used to leverage the trading risk of the Society’, without understanding any of the intra day, overnight, weekly and longer term strategies,  and the overall maturity structure of the $500+ million Portfolio,  it begs to ask – how smart was Mr Gray?

Mr Gray’s staff did not even mentioned the OTC’s as highlighted previously – the SBS were very active in these overnight style options and these helped mitigate much of any overnight risk exposures.

Mr Gray does not acknowledge the expiry of the March Futures Contract in any of his summations and how that impacted on risk profiles.  The 10 year Bond contract was non-deliverable – that meant that all risk exposures to futures and options expired at midday on the 15th Mar ’88.   At a minute to closeout you might have 25,000 open futures contracts, at midday you have zero exposure and a cash settlement against the close out price determined against the physical benchmark stock.   Mr Gray did not factor any of these contract specific’s into his report.

Mr Gray ould have known these specifications attached to the 10 year Bond contract – but he made no mention of it in his report – was that an oversight or a deliberate omission?  Mr Gray never commented when asked this question in recent e-mail exchanges – [see e-mail message exchange responses above.]

At the completion of the Audit – Mr Gray was still not aware of the stratigised positioning undertaken by the SBS in its March Futures strategy.   This says lots about how successful the SBS was in covering its market exposures.   Put another way – the SBS Treasury was so good at its job – that it fooled everybody in the market and and has done so for nigh on 24 years – nobody has had a goddamn clue how the SBS pulled off the biggest ‘futures sting’ in Australian Financial history.

It would be most interesting to know if this successful ‘futures sting’ – revealed toi Mr Gray during the recent contact is now used in training manuals to rewrite SFE history and educate compliance officers in the futures industry.

SBS Internal Auditor:

Tony Page, the SBS Internal Auditor was up to his eyeballs in this report.   He had either turned stooge or was sufficiently intimidated by his lack of understanding of Treasury operations and accounting procedures – that he folded like a cheap tent under the SBNSW investigation microscope.   Page was advising Cleary on all things SBS Treasury – its operations and procedures.  He had been doing this for several months – he was Cleary’s go to man when Cleary needed understanding about Treasury matters.    That meant Cleary was almost certainly  relying on Page to advise him in the face of this report.  Talk about the blind leading the blind.

Efforts to contact Mr Page to date have proved unsuccessful.

Counterparty Risk:

All Bond forwards and ETO-type options have been transacted with Bain & Company as principal.  This produces a direct counterparty risk in the converse case of a favourable move in rates, but default by Bain.  Using the same interest rate scenario, the overnight counterparty risk was estimated at up to $6.5 million.

It is noted that the Bank has not been prepared to extend an unsecured dealing limit to Bain, whilst the Society has now formally indicated that it proposes to formally implement an appropriate limit on dealing with Bain.

These comments suggest some ignorance of the rules and entitlements pertaining to SFE’s Floor membership,  their role and relationship with the International Commodities Clearing House (ICCH), and the ICCH’s role and its guarantees pertaining to all SFE futures contracts.

Mr Gray does not even mention the FRA/Futures agreement between Bain Refco and SBS and how their agreement worked.   It is most likely that Mr Gray had no idea about the arrangement.

The reality was that each FRA/Futures contract SBS transacted with Bain Refco was equally matched with a genuine futures contract that became part of Bain Refco Floor Membership house account with the ICCH.  SBS dealt with Bain Refco in FRA’s and Bain Refco offset these position with a like futures contract.   That meant that every open position SBS had was not even with the SFE.  All the Bain Refco House account positions held in offset to the SBS positions were guaranteed by the ICCH and therefore Bain Refco as the holder of the contract, was itself guaranteed and protected.

So when Mr Gray speaks of unsecured credit limits, he is talking about the ICCH as the end client for the futures contract.  In not being aware of or the understanding of Bain Refco and SBS arrangement – his relationship statement that even the SBNSW does not have an unsecured facility with Bain Refco, is scare mongering.   It has no relevance to where any futures risk exposure lay between the SBS and Bain Refco under their forward rate agreements – FRA’s.  The FRA differential exposure to market value was where any credit risk might be – the same as the futures contract and how it is valued to market with margin calls.

To explain this further, each futures open trade has a bought and sold matching contract.  That in effect means that any margin debt (call) required by the ICCH is also internally matched with a corresponding margin credit (surplus).  Any default on margin, deposit, or contract settlement by a client of a Floor Member, on any open or closed contract, is the responsibility of the floor member and clearing broker.  Any default on futures settlement is guaranteed by the ICCH.

That means, that Bain Refco covered all deposit and margin call requirements on behalf of all transactions it was holding on account of the FRA/Futures agreement with SBS.  If the margin position was negative, Bain Refco were responsible for funding the margin call to the ICCH.  The SBS would then also be carrying the loss margin in its revaluations from its trade position.  That then means SBS would owe Bain Refco as an unsettled liability.

In the reverse of that transaction, that is where Bain Refco have a credit margin on trades it is holding for SBS, there is a credit exposure between Bain Refco and SBS in that Bain Refco owes SBS the amount of the profit margin on revaluation – if there was credit risk – this is where it happened.

If SBS were dealing directly with a Floor Member (Bain Refco) as a normal client, SBS would not be entitled to that margin credit via its clearing account with any Floor Member (Bain Refco) until it liquidated the contracts.   That Floor Member (Bain Refco) would then be holding those funds in its segregated Clients Funds account until it settled with SBS.  SBS and Bain Refco settled on a daily basis for the net result of all closed positions.

Mr Gray had to of understood this process – he had been connected with the SFE for some years and remains so today.  He did not ask about this agreement before he wrote this report, and therefore he did not comprehend the agreement – nor fully understand the Counterparty Risk argument he presented.  He elected to write about Counterparty Risk as pure intent to again intimidate the SBS Management.

There was never ever any credit risk exposure that had connectivity with Mr Gray’s comment – “the SBNSW did not have unsecured credit limits with Bain’s”.   Also, Mr Gray’s comments under ‘Counterparty risk’‘Using the same interest rate scenario, the overnight counterparty risk was estimated at up to $6.5 million’,  … are an absolute beat-up.   These comments are almost criminal in their misrepresentation – and whether deliberately so is for Mr Gray to respond to.

This report had lost all creditability within the SBS Treasurer’s mindset by the time he had read page 3 – and yet it continued …

General Comments from the bottom of Page 3:

… to the middle of page 5,

More importantly, it is now clear that the Society was only able to accurately estimate the risk of its options positions on an ex-post basis.  In the absence of a well-developed and installed options pricing and hedging model, it is difficult to justify the substantial positions and turnover in bond options which took place.  As a fundamental principle, if is difficult to see how such trading could be justified without the ability to accurately calculate, on-line, and ‘fair value’ of listed options, the delta ratio and, more importantly, the potential exposure to change in market volatility (i.e. ‘vega’ ratio).

To put the matter in perspective, proposed new limits for the Bank are for a maximum exposure across all markets (i.e. domestic interest rates, foreign exchange rates, foreign interest rates and equities) of $20 million of which no more that $10 million would be incurred against a particular market (e.g. Domestic interest rates).

Gray was really showing up his staff’s deficiencies throughout the investigation phase – there was such a computer program.  It was used exclusively by the SBS and was propriety software.

All the printouts Mr Heald was looking at had to have been printed from this software.  Did he not ask to see the program?

The same program that generated those printouts also provided the risk profiling for all the SBS Liquids portfolio.  Every position, transaction, forward, option, futures, FRA, OTC’s, physical maturities, yield curve analysis, trading records, profit/loss reconciliations, management reporting – everything was a part of that computer program and the SBNSW staff never bothered to have a look at the program to see what it was capable of.

The SBS Treasurer had developed this program over a long market career.  In the after SBS experience the program was sold to Bank Treasury operations on a commercial basis.   The program was on all the SBS Treasury Computers and encompassed all the day to day activities.    So when Mr Gray says there was no program to monitor all the associated risk exposures – he is being completely ignorant on a factual basis – and again misleading everybody who read the report.  In fact the program is still functioning today with some major upgrades due to spreadsheet improvements.  Why the SBS Executive did not take on Mr Gray on this point is a mystery … hell they were receiving the reports this computer program was generating.

With the touch of a button and with market price/value updates – the total SBS Liquids portfolio, physicals and derivatives could be revalued via a calculus macro within the program.  The refresh function instantly appraise every physical asset, Bank Bills, Semi and Commonwealth Government security in terms of Market Valuation and a hedge relationship with both 90 day Bank Bill, 3yr and 10yr Bond contracts.  All Options, Futures and other derivatives could also be revalued ‘to market’ using the same parameters.

The quality of the input of transactions was the Dealers responsibility and then verified by the Settlements staff for errors.   There had not been a single error input in the time the SBS had been using the software.   The SBS Finance Dept continued to run its existing procedures to verify all Treasury operations – but from a Management Risk profile – the program running on all the Treasury computers was what was used to monitor all the Portfolio risk. Whilst the dual systems produced the same numbers – Executive Management were trusting the SBS Treasurer’s software for Management reports.

Again – the SBS Executive was aware of this – how they did not defend against this allegation is beyond understanding.

The volatility barometer within the program was a self policing input.   The SBS Treasurer knew the SBS Treasury activity was causing the markets increased volatility because of the ‘in-and-out’ squeeze being applying to the spread value between the 10 year futures contract and the 10 year physical market.  It would not have been prudent or accurate to adjust the ‘Vega’ variables for true value on account of that volatility being instigated by the SBS Treasury.  The SBS were the reason for the volatility and why should they pay away the premium income that volatility generated – hell the SBS made more money because of the volatility factor and it was being controlled by the SBS’s market activities.  Mr Gray should have understood this.

It was possible for the program to price the fair value of all options, both OTC and Exchange traded, basis time decay and intrinsic values relative to the physical/futures spreads.   This was a wiz-bang computer program and it gave the SBS a monumental head-start over all the other market operators.  It could factor in market scenarios from any perspective – bullish or bearish moves, the ‘what-if’s’ were used in determining potential profit and loss scenarios and applied to trading strategies.

This program was 5 years maybe even 10 years ahead of the market.  It could have been termed a ‘computer generated trading program’ – and dealing rooms around the world now can’t survive without them.   For Mr Gray to say:

” … it is now clear that the Society was only able to accurately estimate the risk of its options positions on an ex-post basis.  In the absence of a well-developed and installed options pricing and hedging model, it is difficult to justify the substantial positions and turnover in bond options which took place…”

… demonstrates a true indication to how biased and unfair this report was.

The SBS Treasurer had proprietary title to this software and SBS Management were paying him a monthly fee for its use.  This arrangement was established and approved shortly after the SBS Treasurer joined the SBS and the AGM Finance – Paul Ogilvy had signed off on it.

When SBS were eventually sold to St George, the soon to be ex SBS Treasurer brokered a deal where St George could use the software for 3 months during the changeover period, and on the basis that if they still wanted to use it they would then have to buy it.  This was a verbal agreement with Greg Bartlett, the St George Treasurer at the time.   When the three months expired, Bartlett elected not to continue to use it – the price tag was $10,000 – cheap at any cost.   The St George Treasury were scared of the SBS Treasurer and did not want him anywhere near the St George dealing room under the merger and integration arrangements negotiated when St George took over the SBS.

Shortly thereafter the now ex SBS Treasurer instigated legal proceedings against ST George when an ex SBS dealer – now operating out of the St George dealing room – informed the ex SBS Treasurer that St George were still using the software.   The ex SBS dealer also claimed that St George Treasury Management – i.e. Greg Bartlett – had approached him to pirate the software by entering the macro structure and the source calculus, to try and recreate the program functions in a different format so it would look like a different program.   The ex – SBS dealer was unable to create the new program so St George continued to use the program as it was.

The ex SBS dealer was to be the star witness and his testimony would have sunk St George.   The St George Solicitors and Treasury Management intimidated the ex SBS dealer by using his job security into withdrawing his testimony.   After 12 months or so, the SBS Treasurer dropped the case to protect the ex SBS dealer.  Greg Bartlett, the Treasurer of St George at the time, and recently retired Director of Westpac Banking Corporation,  was the person involved throughout this piracy scam.   He was never bought to account for that theft.

Recommendations:

Mr Gray’s recommendations were the final slap in the face given what the SBS Treasury had achieved over the previous 10 months.

The limits issue was fair-game, but his attempts to address this issue had been rebuffed by the previous AGM Finance – and now in the face of this report the SBS Executive were making up limit structures to suit Gray’s requests.

The Financial markets were evolving – they have and always will be a living breathing and emotive centrepiece, and limits form the most important fencing structure to not let dealers wander off the grid.  But – when the Management have no understanding on what Limits really mean and how they should be used – they become a useless tool.  You only had to read about the AWA FX dealer Andy Koval 1986-87 exploits, and the more recent NAB’s Dealer scandal’s to understand how dealers can get around Management imposed limits.

The SBS Limit situation was not perfect – but the SBS Treasurer had structured a self-policing limit structure and he was the only one who knew about it.   He made it a point to kept his Management informed of every aspect of the portfolio’s performance, structure, profit, loss and revaluation status on a daily basis.   He took it upon himself to make sure that his operation had full disclosure to everyone that mattered … his Management trusted him implicitly … and yet – Mr Cleary did not trust him enough to bring him back from leave and defend what he had created in the face of O’Neill’s ‘seek missile’.

Mr Gray’s summation was the nail in Cleary’s coffin – exposing all the wrongs Mr Gray believed was wrong with the SBS Treasury protocols – his views and his perspective.

Was this the best possible summation of the SBS Treasury operation … hardly – given the examples exposed hereto about Mr Gray’s inability to fully understand the SBS Treasury operation as this Audit report response is a testament to its lack of creditability.

The EYE-BALL Opinion’s Summary Comments – on behalf of the SBS Treasurer:

The SBS Treasurer new every aspect of the SBS liquids portfolio – he had lived and breathed it for 10 months – he had restructured it, massaged it, lengthened and shortened it when necessary, and his ‘game plan’ for the futures strategy was ‘inch-perfect’ in its formation and its execution.  He had positioned the portfolio in a ‘bull’ market run that was still going – and he had used the market’s post  ’87 crash skittishness to turn the SBS Treasury into a major market player.   Not for player or reputation recognition’s sake – but because of his professionalism and pride in that the SBS Treasurer applied himself to be the best at anything and everything he did.

This O’Neill sanctioned witch-hunt audit in the form of a ‘rats’ scheme – was trying to turn the efforts of the SBS Treasury into something less that it actually was.  The profits generated were extreme in ’88 terms – and there was nobody who did not tip their hat to the SBS Treasury performance.

O’Neill’s creditability was a lap behind in racehorse terms – he was a young 35-year-old with the MD tile of the SBNSW – he was in love with the political power within the NSW Labour party that title generated – he was not in love with his Banking responsibilities because he was now in charge of a Bank on life support.

Yet – he was sending Mr Gray into the game to destroy the best thing he had going as a Director and Deputy Chairman of the SBS with fiduciary responsibilities to the SBS membership.   His SBNSW title was not more important than his responsibilities to the SBS members – yet his actions pissed all over those SBS members to achieve a financial gain for the SBNSW.  His responsibilities in the way he went about this Audit, and the way in which he set about a course to destroy Cleary and the creditability of the SBS Treasury and SBS Treasurer – were not the actions of someone acting on behalf of the SBS members.   He was trying to tear down what had been created from within to save his own skin.

Mr Gray’s comments in support for the SBS Treasurer ‘expertise’ were small change compared to the – ‘casino like futures trading’ – allegations O’Neill coined and used in his own personal attack against Cleary.  He again used them in press leaks to sway SBS members in a crucial vote to sell SBS to St George in Aug ’88.

The information that led to the story appearing in the press clippings below and dated 16th Aug 1988 – were leaked just six days before the 22 Aug ’88 SBS AGM and vote on the sale of SBS to St George Building Society.

[Click Image to enlarge:]

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[Page 32 – Click Image to enlarge:]

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These press leaks did untold damage to the previous SBS Executive’s creditability – and they destroyed the SBS Treasurer’s own market creditability and career – and all done by O’Neill’s PR campaign to sway the SBS member support for the impending sale to St George without a second thought.   O’Neill was just blasting away and paid no consideration to those he destroyed in the process.

In the face of this Audit report – Mr Kearns the SBNSW Legal Counsel, and replacement SBS Chairman after O’Neill was booted from the position for ‘conflict of interest considerations – commented in the 1988 SBS Annual Report as follows:

[Click Image to enlarge:]

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Can you all read the hypocrisy in Mr Kearns comments – [above] – and this all orchestrated whilst serving as John O’Neill’s lap-dog on the SBS Board.   Mr Kearns told lies in this Chairman’s report –  the SBS Treasury had made near $25 million by the end of the Financial year in May ’88 – some $8 odd million was trimmed from the Treasury’s contribution in this Chairman’s report – $5 million as a provision and the other $3 million that has never been publicly accounted for.

In Mr Kearns’ review of operations he had this to say about the SBS Treasury Operations – page 8 of the Chairman’s review:

[Click Image to enlarge:]

Everybody can now read how the SBS Chairman and still serving SBNSW legal Counsel – viewed the SBS Treasury operation in hindsight – his comments in acknowledging the SBS Treasury’s performance when stacked up against the Phil Gray Audit Report – are in themselves a walking contradiction.  How could the SBNSW Executive live with themselves.

With more incriminating documents still to be uploaded – the criminal intent and their crimes will only become more exposed.

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Final Say on Mr Gray’s report:

Back to Mr Gray’s report and Apr ’88 – every portfolio security, every option and futures/FRA, every forward sale/purchase, every OTC, every aspect of the portfolio was known, massaged and caressed like a new-born baby – this SBS Treasury operation was no fly by night – take the money and run type operation.

Yet – Mr Gray walked into the SBS Treasury while the SBS Treasurer was away with a mandate from Mr O’Neill to find out what was going on within the SBS Treasury.

If Mr O’Neill wanted to know – why did he not just ask the SBS Treasurer – he was Deputy Chairman of the SBS Board – Cleary could not deny him access – yet the SBS Treasurer has never met Mr O’Neill nor any of the other SBS Board Members apart from the SBS Chairman – Mr Ken Dennewald and the SBS GM and Executive Director – Denis Cleary.

If they were so desperate to know the SBS futures and options positions – all they had to do was ask – yet Mr O’Neill decided the ‘jackboot’ style approach was better.   Mr O’Neill wanted Cleary’s head desperately – that would give him back SBS Board control – he wanted to see Cleary him humiliated, wanted him so jacked up that he would be happy to fall on his sword.

Mr O’Neill was not concerned at who he destroyed to get what he wanted – another sign of just how ‘evil’ the man is and was.   His desperation to save his own career – not his Bank – but his own reputation – was so committed he saw no good in what the SBS had achieved – as a SBS Board member was he serving the SBS members interests?   Of course not – he was serving his own interests.

Mr Gray’s comments and assumptions in this report were consistently erroneous to a fault – in some cases they formed outright lies.  Who conducts an Audit and does not speak with the attending Management to discuss any findings – or to ask the questions when issues are discovered?

The SBS Treasurer was given no right of response – and in the situation where the SBNSW were preparing to commit a soon to be revealed FRAUD with purposeful intent to steal the value attached to the SBS reserves – some $75 million – this Report became the instrument that allowed O’Neill to set up the events of the May 5th Board meeting where he staged his coup, and then set in motion a Corporate RAPE and its attendant FRAUD that has never been exposed – nor challenged in any meaningful way.  O’Neill got away with it – and this expose has intent to change that history.

On a major side issue that has to still be addressed to give clear reasons as to why things happened as they did –

  • Why was Mr Cleary held totally and collectively responsible for all of the SBS Boards collective ignorance and lack of attention to all the things Mr Gray raised on the questions of Limits? … and …
  • The SBS GM – Mr Cleary has much to answer for in his decision to prevent the SBS Treasurer returning during this audit period and its aftermath.  To date – the truth about that decision is still to be told in full honesty.

In can simply be said of Mr Gray and everybody else associated with this report – they did not understand what they did not understand …

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Part 7 continues … The 5th May SBS Board Meeting … see below for link …

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Link to all previous chapters for –

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

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The EYE-BALL Opinion … Without Prejudice …

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

The-EYE-BALL-NovelZone Header
Title:
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.

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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.

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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.

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

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Link to all previous chapters for –

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

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The EYE-BALL Opinion … Without Prejudice …

EYE-BALL’s Human Evil Exposed – John O’Neill (CEO-ARU) … Part 7 – The May 5th ’88 SBS Board Meeting …

The-EYE-BALL-NovelZone Header
Title:
Human Evil Exposed –
John O’Neill (CEO-ARU) … Part 7

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 7 commences … The May 5th ’88 SBS Board Meeting … …

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Now that John O’Neill was popping champagne corks with the knowledge that he had Cleary well and truly cast in his baited fish-hook  – he only needed one more thing before he could take back control of the SBS Board.   That was a turncoat Independent SBS Director.

There were four to choose from – SBS Director Ross Cribb was close to Cleary so that was a no-go – Bruce Treloar was against all things SBNSW and had only be on the SBS Board since Aug ’87 and that was also a no-go.   He had also been a Director of the Tamworth Building and Investment Society that became part of the SBNSW late 70’s and early 80’s set-up to have a go at the Commonwealth Savings Bank.  Treloar was no friend of the SBNSW.

The other two Independents were Alwyn Thomas [now Deceased] – and Warren Osmond – both long-term Directors – and had been with the RSL Mutual Permanent Building Society when it became part of the SBNSW/CSB agenda when they merged with the SBS back in 1982.

During this mid to late April ’88 period while the Audit Report was doing its thing – O’Neill approached both these Directors with intent to arranging some type of deal to win their support – he needed only one if it came to that.

In O’Neill’s approach to Mr Osmond’s and as told by him – he had to decline O’Neill’s lunch invitation because he had an earlier engagement with his NSW RSL CEO position – so he never received the approach.   Yet – and at a later meet encounter – Mr O’Neill went up to Mr Osmond and poked his finger at his chest and said:

” … the next time I invite you to a lunch meeting – you’d better be available and show up!”

Swear to god – this is word for word out of Mr Osmond’s mouth – Mr Osmond turned 90 in Nov 2009 when this conversation was held.   He also commented about the May 5th Board meeting after O’Neill appointed himself as Chairman and sitting in the ‘big chair’ –

“… he looked like the cat who had just caught the mouse …”

It was easy to infer that Mr Osmond did not like O’Neill – he had many more stories to tell and notes have been made … shortly after the May 5th Board room coup he vacated the SBS Board and played little further role in what happened when the SBNSW began to run their merger show – he could see how O’Neill was running the show but what could he do as a minority and marginalised Director.

Of the four Independent Directors – leaving out Cleary – that only left one possibility – that being Mr Alwyn Thomas.  His ‘turncoat’ status was confirmed when the FOI documents became available and the researcher spoke to the other Directors.  Some of those documents are uploaded and presented below.

O’Neill picked his mark and sold his story well – or was it that he made Mr A Thomas an offer he just could not refuse.  Whatever that full price was is not known – but there are smackings and evidence of face-value perks in the presented documents other documents to be uploaded at a later date.

Alwyn Thomas became the SBNSW nominated Deputy Chairman after O’Neill elevated himself from Deputy to Chairman with Dennewald’s sacking.  The Deputy position was always a SBNSW appointment as owner of the SBS fixed-capital.  This was part of the price O’Neill paid.

Mr Thomas also seconded the motion to removed Cleary as a SBS Director – [see Board minutes below Resolution Nos 100 – 103] – and this further revealed his ‘turncoat’ status to the other Independent Directors.  It is safe to assume that the price tag O’Neill paid for Thomas’s vote had to have been worth his while – all the while ensuring that he did not turn on O’Neill for the collusive nature of the approach.   O’Neill was playing – ‘lets do a deal’ and using the SBS Treasury profits to fund his game-plan.

When one looked at the provisions in the SBS May ’88 accounts – the Treasury provision of $5 million and the missing $3 million of Treasury profits not announced in the gross profit figure – you don’t have to be too smart to realise where this money might have gone, or how it might have been used.    The SBS covered the costs to extract Dennewald’s resignation as Chairman – and there was also the Cleary termination payout and we know that was $500k or two years in lieu.

After Alwyn Thomas came on board with the SBNSW’s agenda – O’Neill had all his plucked ducks lined up in a row and he was now ready to declare his own hunting season.

But – and it is a big but – there was a ticking bomb ticking away in the background – is was a massive oversight and just one of the many mistakes made by the NSW Premier and the SBNSW Executives on this mine-field planted road to incriminate themselves.  O’Neill and any of his SBNSW lieutenants should have realised the mistake before they went forward – but the hubris involved had O’Neill believe he was invincible.   When this bomb eventually went off it blew everybody out of the water – more on this in a later post.  For now …

The 5th May SBS Board Meeting:

Below are links to copies of the minutes from this meeting:

  • Link to – SBS Chairman Ken Dennewald’s letter of resignation – dated 5th May ’88
  • Link to – SBS 5th May Board Meeting – 20 th May ’88 – [PDF] 2.5mb – [WORD] 3.3mb
  • Link to – SBS Chairman [O’Neill] letter to SBS Staff – dated 5th may ’88

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Ken Dennewald’s Resignation Letter:

Comments:

Dennewald did not agree with the opinions expressed in the Macquarie Bank report – this was disclosed during a conversation involving the SBS Treasurer, Mr Cleary and Mr Dennewald before the SBS Treasurer went on leave in late Mar ’88.   Mr Dennewald further stated at this meeting that he wanted to see the SBS survive and become independent of the SBNSW and moves were in play to make this happen.

To confirm this, and during the research period when discussions with the Apr ’88 appointed SBS AGM Finance – Mr Greg Bates – were held, Mr Bates stated that his job interview with Mr Dennewald included a statement that the appointee would be involved in dealing with merger discussion between the Newcastle and Illawarra Building Societies.

Mr Dennewald shared Mr Cleary’s vision for the SBS and was voting with the SBS Independents for some time because of this shared vision.   O’Neill was aware of this.  Mr Dennewald’s opinion of O’Neill was not something that can be repeated verbatim hereto – except to say that he did not think O’Neill was the best choice for the SBNSW GM position – Mr Dennewald was aware of the SBNSW rumours about non-performing loans.  There were many things discussed that night in the after math of the Treasury sting to pull of the futures play and some $8 + million profit in Mar ’88.

Mr Dennewald was also Chairman of the Board of a Pitt St Merchant Bank and had some general knowledge of the SBS Treasury’s ‘futures play’ that was just completed.   The SBS treasurer had discussed it with Mr Dennewald and Mr Cleary together in an after work Board room meeting before the ‘play’ became fully engaged in early Mar ’88.

One of the topics discussed at length was the recent receipt of the KPMG Treasury Bonus Proposal requested by Cleary after the Christmas Bonus debarkle over the SBS Treasurers bonus.

During the meeting referred to above, Dennewald gave assurances about the KPMG proposal and its forecast pool value – he shook the SBS Treasurers hand and told him directly that he would get his bonus – that it would go before the May 5th Board meeting for approval and with the Board’s current voting record he could guarantee it would pass.

There was no way given after what was discussed that evening that Dennewald would have gone quietly as Chairman of the SBS – O’Neill had to make it a worthwhile deal – and even though the SBNSW had the right to replace him – it was Dennewald’s silence that O’Neill would have to pay for.   O’Neill was spared the blood-letting – it was the SBNSW Chairman Reg Watson who did the number face to face with Dennewald on the morning of the SBS Board meeting and away from the SBS Head Office.

Immediate after this sacking happened and the meeting broke – Dennewald rang Cleary and told him what had transpired – Cleary was as one could understand – devastated, and he knew then that the writing was on the wall – all he could do now was wait and see how O’Neill was going to play out his agenda.  Whatever defence Cleary had in his back pocket at that point – would be like a punter down to their last dollar with a single race to go – his chances of a hail-mary trade were about the same as winning lotto.

Had Cleary sought any type of legal advice prior to this Board meeting, and given what he had been through during the grilling he received over the Audit Report, defies his position – it should hav ebeen his first line of defence.  Why he did not is still to be explained.

Cleary has not talked about this – he refuses to.  If one could hazard a guess – he still carries a hole in his heart as does so many other SBS Executives over what happened that day.    But in all honesty – Cleary has to wear much of the blame for being outwitted by O’Neill – O’Neill played offence and Cleary thought defence would be good enough.  He seriously underestimated O’Neill and that has to cast some doubt to Cleary’s savvy about the personal game he was playing with O’Neill over the previous 10 months – since O’Neill’s appointment to the MD position at the SBNSW.

This is an important question – legal opinions obtained by Regulatory Authorities after the coup happened clearly indicate that a legal challenge would have stopped O’Neill dead in his tracks.  This was another major oversight by the SBS Management team – but before we go there in another expose – let’s first deal with the May 5th SBS Board meeting … see minutes below …

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The SBS Board 5th May minutes:

5th May SBS Board Minutes: Page 1

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5th May SBS Board Minutes: Page 2

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5th May SBS Board Minutes: Page 3

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5th May SBS Board Minutes: Page 4

Company Secretary Comment:

One can say – it was a very clean and clinical coup!

This is one way to describe the events as they’re presented, yet according to Directors who were at that meeting – you can be assured that it did not all go as smoothly as the paper trail would have you believe.

Numerous discussions were held with the SBS Company Secretary during the research phase about the conduct and procedures surrounding this 5th May SBS Board meeting.

A most interesting discovery happened before the meeting took place.  O’Neill approached the Company Secretary – [Paul Gibbeson] – outside the Board room and before anybody had entered and gave him a copy of the propose resolutions agenda that was to be put before the Board.  The Secretary was then told by O’Neill that his attendance at the meeting was not required.   O’Neill handed the Company Secretary his game-plan ‘script’ for the meeting.

It is widely understood and acknowledged that most Board room vote results are known in advance – it’s a case of knowing your Directors and how they will vote on certain matters.   The SBS Secretary was not privy to any of what happened during the course of that SBS Board meeting – other than what was reflected in the minutes above.

Board Minutes:

It is important to get a broader perspective of how the SBS Board control switched between the SBNSW and then to the SBS in Aug ’87,  and then back again after the 5th May Board meeting – and to fully appreciate the personal feud being played out between O’Neill and Cleary.

The table below is a reconstruction of SBS Directors and their allegiances,  as they were from before Mr Treloar’s appointment at the Aug ’87 AGM – and through to the Board structure after O’Neill had to resign his Chairmanship and Director status over ‘conflict of interest’ issues in July ’88.  His dismissal from the SBS Board was at insistence of the Co-Operatives Dept, and the Assoc of Permanent Building Societies Review Committee.

[Position and original allegiances included – and subsequent Board Room Changes through until the merger with St George Building Society in Aug 1988.]

Board Minutes Comments continued:

Before Resolution 104 passed – [page 4 of Minutes] – the minutes reflect Cleary and Mr Cribb left the meeting.  During this absence and as told by Mr Cleary – Mr Cribb placed a phone call to Premier Greiner about Mr Cleary’s imminent demise and they talked about a payout/termination payment.   It had been O’Neill’s intention not to offer Cleary a payout – but some discussion was held on the matter with Premier Greiner and Greiner agreed to the two-year contract extension before Cleary’s termination was enforced – this netted Cleary a $500k payout.

In the wash up it was the cleanest coup ever staged – and when Cleary did his ‘walk of shame’ saying goodbye to the SBS staff after he exited the Board meeting – there were many tears from staff and Cleary.  He called into the SBS Dealing room on his ‘good-bye’ walk and sort out the Treasurer – at this point the Treasurer was expecting news about the Treasury Bonus Proposal going before the Board.

As mentioned previously – both Dennewald and Cleary had pledged that the KPMG TBP was to go before this Board meeting for approval.   The Treasurer looked at Cleary and was not too sure what Cleary’s message was to be.

With everything that had happened during his overseas absence – and with the SBS Treasury Audit completed – the SBS Treasurer was still trying to find out what had happened while he was away.  In a brief and curt meeting with Cleary the previous day over his outstanding expense claims from his trip, Cleary denied to reimburse his exspenses, saying that he should take them to Bain Refco.

When asked by the SBS Treasurer about the bonue proposal going to teh Board meeting,  Cleary responded in a dismissive tone indicated the Bonus proposal was still on the Board’s agenda.  This was the first time the SBS Treasurer had seen this side of Cleary – it all added to the mystery of what and how had things changed since he had been away.

Now – and in real-time of the afternoon of the 5th May ’88 – and with Cleary now standing in the SBS dealing room – expectation was clearly written all over the SBS Treasurer’s face – Cleary approached the Treasurer and extended his hand but not with his normal robust handshake – he took the Treasurer’s hand softy and clasp the shake with his other hand and bowed his head.  The SBS Treasurer took his hand and was unsure what to expect – he could see Cleary had tears in his eyes and this was not a good sign.

Cleary choked down twice in trying to say something – he took a deep breath and broke the news that he had just been sacked and was out the door – and that security was waiting to escort him out of the building.   He could not look the SBS Treasurer in the eye – and he quickly shook the hands of the other people in the room and left.

This was a monumental shock to everyone – Cleary could not speak for his choke down of emotion – all he managed to say to everyone was that it was over and he wished everybody good-luck.  The whole dealing room was in shock with the news, Cleary’s son – who was a SBS Trainee dealer left the room with his father and that left a hollow and empty tone within the room – everybody was devastated.  Sobbing could be heard from the hallway as loyal staff waited their turn to say goodbye.

The SBS settlements Manager – S.B. – came over to the Treasurer to verify what had just happened.   The SBS Treasurer told her what Cleary had said and slumped back into his chair in shock.   This was not just at Cleary’s dismissal – but also at the disappointment over the Treasury Bonus Pool that had been 10 months in the making and was now in limbo.    Some $4.5 million in KPMG calculated bonus pool funds had just evaporated … the repercussions were unfathomable in the immediate moments it took to realise what was at stake and had just happened.

The Treasurer made a phone call to Len Thompson – the SBS Deputy GM – in the immediate aftermath  to try and find out what had happened.   Thompson took the call and informed the SBS Treasurer about  Dennewald as well.  About an hour or so later –  all Head Office staff were given the following letter from the new Chairman John O’Neill – it’s dated the 6th May but staff at Head Office received it on the 5th.

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5th May SBS Chairman letter to SBS Staff

Comments on O’Neill’s staff mail out:

Paragraph 3 – commencing … “Their report – [Macquarie bank Report – MBR ] – makes it clear that the Society needs to merge with a larger Financial Institution.” ...

[If anyone wants to read and review the Macquarie Bank Report for themselves  – please use this link to download a PDF copy – [12mb large – 74 pages.]

Everybody was still in shock when the letter was delivered.  In fact the SBS Treasurer was so angry at receiving the letter he threw his letter away without reading it.  He found another letter left by someone and that letter is the one that appears above.  At the time it did not make sense because no one outside the SBS Board had seen the MBR.

The O’Neill game-plan was still in play and on-going and this letter had so many things in it that  were not fully explained.   Nobody could understand or fathom the reasons for what had transpired.   Cleary’s staff were loyal – and his loss left a massive void.

O’Neill believed he had been a clever little rooster having just pulled off his coup – but this letter and some 24 years later, it can now be revealed as the beginning of the deception and trail of lies O’Neill was attempting to juggle as he built his house of cards to cover his tracks.

O’Neill has entrapped himself with this letter – and as Chairman of the SBS Board and with the responsibilities he owed to the SBS members and staff after the coup – this letter proves his first priority was to the SBNSW  thus compromising his fiduciary responsibilities which was later agreed toby the Regulatory authorities.  This letter exposed O’Neill’s criminality …

The SBS Treasurer needed to talk to someone about what was happening – he was still to read the Phil Gray Audit Report – and to his new-found dismay there was no one left that he knew or trusted to counsel him about anything.

At the time the SBS Treasurer had no idea how factual O’Neill’s comments were –  Cleary’s payout had placed him under a gag order – the Deputy GM Len Thompson was sent on Administration leave for near 2 months – there was nobody left other than the new AGM finance Greg Bates who the SBS Treasurer was still to meet.

The SBS Treasurer was already thinking the new AGM Finance was a SBNSW appointee and stooge to help with the merger agenda.  To be fair to Mr Bates in a hindsight perspective – he had joined the SBS just three weeks earlier – no consideration was given up by the SBS Treasurer as to how he must he have been feeling about his new career choice in the aftermath of the O’Neill coup.

At the time this appointment cut no sway with the SBS Treasurer – he gave Mr Bates a hard time for the rest of his employment by the SBS.   It would prove to be no fun being on the end of that equation.  After the merger with St George – Mr Bates did go to work for the SBNSW as a GM.  There was no excuse for the SBS Treasurer’s behaviour toward Mr Bates over the ensuring three months – and in research discussions held with Mr Bates over recent years – the relationship has warmed and information exchanges have happened.  It has been revealed it was his opportunity loss also.

A relates to the letter from O’Neill to the SBS staff – it is now know that there is no validity in O’Neill’s statement of facts as quoted above – Macquarie Bank were deliberately misguided about the SBS’s current financial position when the report was commissioned – how else could they had got it so completely wrong.

So whatever the opinion Macquarie Bank came up with in their report – it was always going to be a  flawed opinion.  This was attested to by the Minister for Co-Operatives when he read the report – and when Cleary gave his response – [these responses can be read using these links – Cleary’s response PDFCo-Operatives response PDF.]

As a SBS Director, and now the Chairman of the SBS – O’Neill was acting in direct conflict with his fiduciary responsibilities as a SBS Director – and a Director of the SBNSW.   As a lawyer himself this does not say much to his integrity as a person – or to how he discharged his duties and responsibilities as a Lawyer and in the position in which he exerted his personal wants over and above what would be in the best interest of the SBS members and staff.

This was just the tip of the iceberg of what was about to follow.   With all that is now known of the events that followed – O’Neill and his crime pals should be cooked goose’s – the problem being who is interested in this Corporate RAPE and FRAUD involving some $70+ million some 24 years later?

These crimes just don’t pertain to O’Neill’s actions – all the other SBNSW appointed SBS Directors, Paul Kearns, Bob Thomas and the new kid as at the 5th May and the SBNSW Company Secretary – Richard Turner – all voted with O’Neill in this little self entrapment.  This was a collusive affair and they were all complicit in what transpired.  This is the exact time and date when the Corporate RAPE of the SBS  commenced.

The retrieval of the MBR:

So in the context of this Staff letter, and the minutes of the 5th May Board meeting – the search for the MBR some 20 years later was on in full.   Initially there were objections to its release under FOI rules from Macquarie Bank and one other – Westpac Banking Corporation – the new owners of St George Bank – the former St George Building Society who took over the SBS in Aug ’88.  Those objections were overcome and the MBR showed up some months later.

From the reading of that report – the case against the NSWG and the SBNSW took on a new lease of life – so many pieces of the puzzle fell into place.  This MBR became the link document that opened so many doors to the Regulatory documents and everything that followed from there.  [To read the synopsis on the MBR posted on-line as a part of this expose – please click here.]

In real-time and when these events actually happened in May ’88 – the SBS Treasurer can still remember how he felt and dealt with the ‘loss’ and the altered circumstances after that 5th May Board meeting.  He was completely out of the knowledge loop – there was nobody to ask about what had happened because they were all looking for lifeboats of a kind and nobody wanted to hang about and give him the information he wanted – he did not even know if they would or did have answeres to his questions.

This was perhaps the saddest day in the SBS Treasurer’s career which ended shortly thereafter when O’Neill leaked the SBNSW Audit Report and another internal SBNSW report on the SBS Treasury to the media.   [Those media stories can be read in Part 6 of this expose and are linked here – near bottom of post.]

The SBS Treasurer asked himself a thousand times in the immediate aftermath what did all Dennewald and Cleary’s handshakes and promises of a month or so ago mean now?   He and his Treasury team had been betrayed and the efforts to have accomplished so much now took on a different perspective as the SBNSW were about to get their hands on all the profits made.

What was he to tell his staff?   What was the new AGM Finance all about?

All the SBS Treasurer knew was that yet again – and despite his efforts to try and protect himself – he had again been royally screwed by fuckwits to fuckin’ ignorant to get out of their own way and learn as opposed to destroy what they did not understand.

There were so many unanswered questions swirling in his head – it was like living in a daze for several days and weeks after – one can talk about chopping off the head of a snake to kill all that lurks beneath – O’Neill’s plan was executed to perfection – but was it legal?

Not only was O’Neill ruthless in his coup – he had now became vindictive and vicious – he was not done yet with the blood-letting – this little Johnny boy was on a roll and he was gonna make people see that he was someone important and that people should look past his short stature and see someone big in the making.   All his life he has ridden on the back of others … these allegations will be covered in later posts …

So to deal with his immediate loss, and try to function as a Treasurer in the new AGM Finance Greg Bates world of rules, and – ‘please explain everything’ before you even think of doing a deal – he tried to pigeon-hole what had transpired as a misadventure – a natural occurrence so to speak in market terms – and in the face of having nobody he trusted around him except his own staff – he started to treat the episode as if it was like one of Phil Gray’s hypotheticals in a what-if type scenario.

He began to think of it as having got a big play wrong in the market – dealing with it this way was about the only way he could find the strength to deal with the loss and the disappointments.  He could see the same despair it all in his staff’s faces – everybody was hurting and he had no answers.  All those promises – all those happy times only a month or so ago – all now a distant memory.

O’Neill had no idea what he had destroyed – it had been a utopian environment – a dealers paradise – and the fruits of that environment created and allowed to happen under Cleary’s Management – his absence of intervention or control was either pure genius on Cleary’s part – or complete stupidity in that nobody above the SBS Treasurer had any goddamn idea what was going on.

To this day O’Neill has no idea what devastation he created or caused to all the SBS Staff in general.  It was not just the SBS Treasury staff with long faces – people’s lives were altered – and many never really got over it.  Yet – O’Neill was not done with pouring more oil on the fire – winning back the SBS Board control only was a fraction of the battle – and after the news of the Board room coup – plenty of people began to line up to have a go at knocking O’Neill off his perch.

This was a game from his perspective – how dare he play with people’s lives and entitlements to serve his own twisted Machiavellian and Freudian brain function!

O’Neill’s actions were pure ‘evil’ – and in this lifetime or the next – he will get the opportunity to feel what everybody at the SBS felt that fateful day on the 5th May 1988.  He had no idea what he was doing with his merger agenda – he nor his Treasurer Phil Gray had any knowledge level that could explain what had happened at the SBS Treasury – they just decided – ” … if we don’t understand what happened we had better shut it down.”   What fuckwits … even at this stage O’Neill nor Gray wanted to meet the SBS Treasurer and ask him any direct questions.

KPMG Proposal – Treasury Bonus Pool (TBP):

There was one saving grace for the SBS Treasurer in his confused and rabid mindset – the KPMG Treasury proposal.  It was delivered to the SBS on the 24th Mar ’88 and its authenticity had to be accepted by the new Management – or so he thought.

The Treasurer had read this proposal a week before he went on leave.  He had also discussed its draft format with Dennewald and Cleary the same night he had drinks when discussing the ‘futures market play’.   The TBP numbers the proposal produced were in excess of $8 million – and the SBS Treasurer had a bonus clause in his contract that read – [see clause 2 below]:

5th May SBS Board Minutes: Page 1

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5th May SBS Board Minutes: Page 1

Comments:

This Clause 2 was inserted at the insistence of the SBS Treasurer in remuneration negotiations with the then AGM Finance – Paul Ogilvy.  Too many times in past employes his Management had not honoured promises made when it came to Bonus payments and remuneration entitlements.

Ogilvy had resisted at first – but when the SBS Treasure played hard-ball and said it was a deal-breaker – Ogilvy confessed up why he could not offer the clause.  He stated that nobody at the SBS had any bonus clause in their contract and that there was no Bonus system or structure at the SBS.   It became obvious that new ground had to be brokered and this Clause 2 was then agreed to by both parties and inserted – with an understanding that the TBP was to be a work in progress – and to be developed via mutual and independent discussions.   KPMG were brokered in on the deal in Dec ’87 and their Executives had several meetings with SBS Executives and the SBS Treasurer over the next three months.

The KPMG Proposal was the fruit of that labour and during its work-up period – everybody at the SBS Executive level knew the Treasury staff were entitled and to share in this TBP.

This TBP was in line with other like Bonus structures KPMG had been involved with – the SBS Treasurer experience in these matters was extensive – it just never panned out the way it was supposed to when dealers started to earn more than Management – everybody wanted a bump – yet without the dealer nobody got a cent …

The KPMG had considered every aspect giving respect to the SBS and its Building Society status – it was not mainstream Financial Markets or though it was at that time in the same league and ranked far ahead of most Banks and Merchant Banks …  The TBP had been looked at from every angle – and in most Bonus structures being applied in professional dealing rooms a simple formula was being sed – the 25% rule – 25% of earnings to cover salaries – 25% for gross costs – 25% for Admin share, and 25% for Bonus split.

Because of the Building Society stature – the TBP adopted an agreement reached between all parties to use a sliding scale – see the TBP document for a full breakdown.

As things now looked – all that effort and structure and owed monies was now sitting on a shelf somewhere never to be seen again – and O’Neill was in a rush to get his hands on the capital value where this TBP ended up.   Stupid thing is – the SBS paid over $8 million in tax for the ’88 year – why would O’Neill pay all that tax and not pay a similar amount to the SBS Staff for a fantastic year as had been negotiated before O’Neill bought his road-show to town.  The SBS reserves before the SBS treasurer stood at $39 million – at the end of May ’88 they stood at near $68 million if the $5 million provision and the revaluation profit in the SBS portfolio was taken into account.

The sale price the SBNSW received from St George was $75 million – in what universe can you imagine that the SBNSW would have received that value if the SBS Treasury had not have done his stuff – O’Neill was making himself look good and all on the efforts of the SBS Treasurer – the guy he buried – burned – and then spat out on a career dump heap …

To try and not be seen as a complete oxymoron – and not appreciative of the SBS Treasurer’s efforts – O’Neill threw him a $200k bonus less the $101k in tax – with no chance to make it tax effective – like super or some other reasonable arrangement – take it or leave it was the offer.

In further discussions between Dennewald and Cleary before the Treasurer went on leave – they talked about specifics and numbers attached to the TBP.   At that time the TBP calculations agreed to had the value of the pool in excess of $7 million – by the end of May it was above $8 million – the outcome from the 5th May Board meeting had now left this hanging out there with nobody left who could even make any kind of presentation to the new Management.

Some 50% of the TBP was to be shared with all SBS staff outside of Treasury – and the balance being shared with the existing SBS Treasury staff.

The SBS Treasurer had discussions with his staff about bonus’ and indications had been given they would be receiving 100% of their salaries as a bonus depending on their length of tenure.  When the SBS Treasurer first started there were only two staff in Treasury – himself and – S.B. – in settlements – it was this way until October 19th ’87 – that fateful ‘crash’ day when Trainee Dealer – M.L. – came on board with additional settlements staff.  Then came another Trainee in December – S.C. – and a Chief Dealer – D.M. – in mid February with another two settlements staff.

All these preliminary ‘heads-up’ Bonus discussions all happened before he went on leave.   M.L. was also to be to be rewarded with his ‘Dealer’ wings and a new ‘package’ including a car and other perks.   This was to be an additional surprise announcement at a time after the TBP was approved.

The Settlements Manager who had already received a significant upgrade was to receive another boost – and all the other staff were to receive salary reviews of 10-15% for their efforts in addition to their bonus entitlements.   There were also approved plans to expand the desk with another 3-4 senior dealers in coming months – dealer stations had already been created for them in a major dealing room restructure.

Without the SBS Treasury support staff – and in particular S.B. – the SBS would never have been able to accomplish what was achieved – S.B. gave her all, and in all of the SBS Treasurer’s past employs – never had he had such loyal and devoted staff.  It was a case of shared success breeding more success.  He will never forget the devotion his staff offered up – it was truly the happiest career time of his life and sharing it with these staff made it just that more special.

So when Cleary came into the dealing room after the May 5th Board meeting to deliver his news – the shock and horror all over the SBS Treasurer’s face after Cleary had given him the news about his sacking had more than just the loss of Cleary as his immediate Boss to deal with.

He truly felt Cleary’s loss – but he was also suffering another loss that was not even on Cleary’s mind at the time.  Cleary had his payout as some consolation – and it took some time for the SBS Treasurer not to feel once again screwed over by his Management  – and the naivety in the way he blind trusted others who controlled his destiny.   Cleary’s payout was not known at this stage – it had to be something the SBS Treasurer knew – nor Dennewald’s – nor what had actually happened in the Board meeting – it was an environment where he had to bite down on his rage and want to smash someone.

The SBS Treasurer was still yet to receive a copy of Phil Gray’s Audit report – and he was still to meet the new AGM Finance – Greg Bates.   He was still completely in the dark.   Since his arrival back the previous day, everybody who might have had some knowledge about the Audit outcome was keeping ‘mum’ about what had happened.  He had not been able to find out any information from any of his superiors about any of the things that had happened whilst he was away.

During the 5th May Board meeting a new SBS GM was appointed as per the minutes above – Mr Tony Howarth – he was a GM at the SBNSW and he became the caretaker SBS GM to oversee O’Neill’s merger agenda for the SBS with the SBNSW.   It would be a week or so before the SBS Treasurer was summoned to meet the new GM.

Now that was a meeting – Mr Bates was there as well and fireworks ensured.  The SBS Treasurer exploded when he was told what the new deal was – he dared them to sack him there and then and called them both ‘fuckwits’ and many other unkind metaphoric pseudonym’s.   He flew into Greg Bates every opportunity he had – and humiliated him as best he could.  This was the Cleary loss – the bonus loss – the dealing room autonomy loss – it was the career loss – all of that had bottled up and he was now venting.

In his own mind he knew he could not work for O’Neill in any capacity – Cleary’s after work stories about O’Neill had poisoned the SBS Treasurer’s perspective – and in that light O’Neill was a fuckwit and would always be a fuckwit.

It’s very ironic that the documentary evidence and the stories told throughout the research phase can now prove all that has been said – and still to this day the SBS treasurer has never had a face to face meeting and any type of direct conversation with O’Neill.

The outburst in Howarth’s office – Cleary’s old office – was perhaps the dumbest thing the SBS Treasurer had ever done – he never stopped – he used every profanity he knew and just kept paying out … poor Mr Bates never got a word in edgewise and Howarth asked him to leave in the face of the unloading tirade.   It did not improve that much when Howarth tried to calm him down …

This part of the story continues in the next installment … where O’Neill’s underbelly becomes exposed and how the ‘ticking bomb’ – all of his own making blew his dreams away – and yet he was able to recover – and that was when the FRAUD of the decade began to happen with Premier Greiner’s full involvement, and sanction,  and with his help.

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Part 8 … continues – The 5th May Board Room coup responses …

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

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The EYE-BALL Opinion … Without Prejudice …

EYE-BALL’s Human Evil Exposed – John O’Neill (CEO-ARU) … Part 4 – Macquarie Bank Report

January 14, 2012 Comments off
The-EYE-BALL-NovelZone Header
Title:
Human Evil Exposed –
John O’Neill (CEO-ARU) … Part 4


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.

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Part 4 commences … The Macquarie Bank Report …

The time is now the end of March’ 88 – and the SBS Treasurer had just gone on Annual leave.  This was a well deserved break as the SBS Treasury operation had just pulled off the biggest market coup in a generation – it was a five month ‘sting’ and completed on the closeout date of the Sydney Futures Exchange Mar ’88 Ten year CGS Bond futures contract – the 15th Mar ’88.

The build up to this futures ‘close-out’ is the main story in the novel ‘Balls like an Elephant’ – this non-fiction novel is an integral part of the story and forms part of this Document upload process.   The money made by the SBS Treasury during the ’87 – ’88 year gave rise to everything else.  The SBS reserves grew from $39 million to $65 million during this period – total society assets grew from $1.1 billion to over $1.5 billion.   These numbers shamed the SBNSW growth and profitability numbers and as the SBS reserves grew – the SBNSW became more focused on using their fixed-capital control to extract the value of those reserves for their own gain.Bals Like an Elephant

“Balls like an Elephant” is available to read on-line in chapter order at this link:

The SBS March ’88 monthly profit was six times the best previous monthly result since the SBS Treasurer joined in Aug ’87.    The profits were so ‘in your face’ from the SBNSW perspective – John O’Neill at the SBNSW was throwing tantrums at the ‘crow’ the SBS GM – [Cleary] – and Chairman – [Dennewald] – were able to sing in the face of the SBNSW’s mounting losses.

O’Neill’s own SBNSW Treasury had floundered woefully in the aftermath of the Oct ’87 crash and Treasury staff defections.  They had appointed a new Treasurer in Mr Phil Gray – know as Mr Phil Gay to most market operatives before he changed his name.  Since Mr Gray’s appointment, the SBNSW Treasury had gone through a new ‘risk aversion’ implementation policy based on an initial review of the SBNSW Treasury operations by Mr Gray after his appointment.

Mr Gray was the former and well-respected Treasurer of Australian Bank prior to the SBNSW appointment – Australian Bank were known in the marketplace as the ‘Clayton’s Bank’ – the Bank that never took any risks – the Bank that played on the fringes of the market and never mixed it up when interest rates were on the move.   All this meant was that the SBNSW had hired a guy that knew how to contain ‘risk’ exposures – but in the SBNSW’s case  – it was possibly far too little and far too late.

In Dec ’87 the CSB handed over the final $200 million settlement to the SBNSW/NSWG and signed an agreement rescinding the 1931 Amalgamation Agreement.   This now gave O’Neill free rein to pursue his merge agenda with the SBS and convert them into the SBNSW’s Savings Bank arm.  This was the end-game plan that was set in place in the late 70’s and early 80’s.   There was only one problem – the then NSW Premier Unsworth had told O’Neill that he would not allow a merger between the two entities and this left a very pissed off O’Neill having to cool his heels.

O’Neill needed a friendly merger – research by the SBNSW had told them that the SBNSW was not popular with the SBS members – Whitlam had an appeal but when O’Neill took the reigns – public opinion and perception had changed and so it was with how the SBS members saw the SBNSW and O’Neill.

This could be attributed to the efforts of the SBS Management who themselves had adopted a resistance position in respect of the SBNSW merger agenda.  Since the O’Neill appointment,  the SBS GM – Denis Cleary – was not playing ball with the SBNSW.   Up until O’Neill’s appointment Cleary believed he would succeed Whitlam – and in that light – the SBS merger was part of Cleary’s arrangement for the top job.

Cleary was one of the 14 applicants for the SBNSW top job – yet O’Neill had come from nowhere to leap-frog all other applicants.  Cleary was pissed because he had been given an undertaking by Whitlam when he took the SBS gig in 1984 – that he would succeed him as the SBNSW MD.   Even during the interview process Cleary was given information that he was the front-runner – and then all that turned to crap when Little Johnny came from nowhere – all on the basis that he’ interviewed well’ according to his own words in an interview he gave shortly after his appointment – see Part 1 interview transcript here .

This set in train a series of SBS defence strategies orchestrated by the SBS Executive.  The first move was to get a SBNSW aligned Independent Director – Mr A Knowles – off the SBS Board via a ballot process at the Aug ’87 SBS AGM.   This succeeded with a former Tamworth Building and Investment Society (TBIS) Director – Bruce Treloar – agreeing to run for a DIrector position against Mr Knowles.  Mr Treloar won the position and that gave five (5) Director votes to the SBS against the SBNSW’s four (4).  The deciding vote was the Executive Director vote of the SBS GM – Denis Cleary.

For O’Neill’s merger agenda to gain any traction he first had to win back control of the SBS Board.   This was a simple strategy at face value – he could replace Cleary – the SBS GM – and thus remove the Executive Director vote,  and return the SBS Board to eight (8) members, of which the SBNSW had four appointees plus the SBNSW appointed Chairman’s deciding vote if needed.

To sack Cleary without cause would invite SBS members hostility – this was not wanted.  O’Neill’s strategy then became a course to create a ‘frame-up’ against Cleary and then dismiss him for ’cause’.   This was no simple process – the SBS had grown from a $1.1 billion Society to $1.5 in the 10 months to Mar ’88 – the SBS profits for the same period had been exceptional – in excess of $20 million against meagre $1-2 million profit announcements over the past 4-5 years.   The SBS members loved Cleary and his staff were all very loyal.    No – if O’Neill was to dismiss Cleary and stay in the merger game – it would have to be for good reason.

Since O’Neill’s appointment and lost control of the SBS Board – the SBS monthly Board meetings were becoming more hostile and agenda driven.   The SBS monthly profits pretty much gave Cleary bragging rights against anything O’Neill and his lieutenants raised.   During this phase O’Neill developed another problem – the  SBS Chairman Ken Dennewald was in the process of changing his allegiances even though he was a SBNSW appointee.

O’Neill could have fixed this at any time by replacing Dennewald with a new appointee.  Dennewald would have known this – and his mistrust of O’Neill since he took over from Whitlam was obvious.  This further undermined O’Neill’s creditability within the SBNSW senior Management.    O’Neill chose to delay the replacement of Dennewald until he had ’cause’ to dismiss Cleary and he had the vote of one of the Independent Directors in his pocket.   Getting rid of Cleary became O’Neill’s priority agenda.

O’Neill’s ‘friendly’ approach to the SBS Board about a possible merger between the SBNSW and SBS came at the January ’88 board meeting.    This was within weeks of the CSB settling the final $200 million owed under the appeals court judgement, and the 1931 Amalgamation Agreement had being rescinded.    The outcome from the Board meeting was the SBS commissioned a report from Macquarie Bank into the viability and options available to resolve the SBNSW ‘s investment in the SBS – and whether a merger arrangement between the SBNSW and the SBS would be mutually beneficial.

The Macquarie Bank Report (MBR):

This report was finalised in April ’88 and can be read in full using the following links:

It is important to highlight the ‘terms of reference’ this report was responding to …

Page 2 of MBR:

Comments:

This preamble gave a clear indication that this report had no real recourse.  In essence the report was an opinion piece and carried no weight of responsibility or offered any summary opinion about what would be the best course for the SBNSW and its desires towards the SBS.   The report was based on outdated information and was ‘trash’ even before it was even published.   It is obvious that all the resource data and contributing comments came from the SBNSW – none of the SBS’s current year’s performance and profits were factored into the Report numbers.  As a creditable document – it had none within industry peers.

The only people it suited or served in any way were the SBNSW and NSWG as a paid for opinion that tried to ‘picture paint’ a belief that the SBS was not profitable, needed capital, and had no real prospect for growth.   As has been illustrated – all three of these criteria were misrepresented,  incorrect and outdated in the report.

This report has no validity – and as time passed and history explores the circumstances in which the report was used after its release – and in the context of how the report was used to aid in the FRAUD against the SBS members – it is clear to see that this report was the foundation from which the SBNSW and NSWG structured their FRAUD.

In a final humiliation arising from the NSW Premier’s actions – this report was used by Premier Greiner in a letter to Co-Operatives Minister Peacocke – in an urgent plea to allow the sale of SBS to St George Building Society to bypass the Takeover Review Committee.   See this letter and comments via this link:

When Premier Greiner stated in his letter –

“the proposed merger was one of the options considered and endorsed by the Macquarie Bank Report “

… Greiner overstated in the extreme the report’s findings, and never paid any attention to the Co-Operatives response, nor the SBS GM’s response to the MBR – nor to all the recommendations that any disposal of the SBS would best serve the SBS members if it was reviewed by the Legislative statutes dictating that any disposal be subject to the Takeover Review Committee.

Greiner’s letter to the Minister was a gross misrepresentation of facts – and as the Premier this should carry serious fallout.  Yet – Greiner has never been made accountable for his actions in this matter.

There can be only one conclusion to the reasons behind this massive Legislative oversight – the sale to St George was the result that best suited the SBNSW and NSWG given the plight of the existing SBNSW’s financial position.   Why wee the SBS members entitlements completely disregarded by the Legislative process?

What options were presented to the SBS members in allowing them to decide the fate of the SBS?

Why did the SBNSW and NSWG go out of their way to deny the SBS members their rightful entitlement in deciding alternative options – i.e.

  • buy back the $3.05 million fixed-capital out of SBS reserves – some $60 million being available,
  • to remain an independent Building Society severing all ties with the SBNSW,
  • to raise peer deemed capital requirements through a share issue to members – see Cleary’s MBR response
  • A ‘tender’ process for all interested parties … including
  • a merger with Newcastle or Illawarra Building Societies as recommended by the Co-Operatives review of the MBR …

Why was the only option pursued a sale of the SBNSW owned fixed-capital to St George Building Society for $70 million?  This price tag represented the value of SBS capital reserves and goodwill that the SBNSW and NSWG were willing to sell control via the ownership of the SBS fixed-capital.   What value did the SBS members get – remembering they had $1.5 billion in shareholder equity against the $3.05 million owned by the SBNSW?   And to understand that this was approved, sanctioned, sought and done with pressure bought to bear by the Premier to get it done as outlined  above.

In Law – this was a criminal action with deliberate criminal intent, and actioned under a known and exposed ‘conflict of Interest’ position – and as such all those responsible should have faced indictable charges.

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MBR pages 38-45 … [these pages pretty much summarise the overview of the SBS and its future from the Macquarie Bank perspective. It is important to understand that this was all SBNSW agenda – the SBS had no want to be involved with any deal with the SBNSW and this report reflects the interests of the SBNSW and NSWG.]

Comments:

The 8.1 clauses covering advantages and disadvantages the SBS and SBNSW share, only really talk about the SBNSW perspectives – and not the genuine interest or outcome for the SBS members.   Macquarie Bank did not even seek a legal opinion on what the ‘fixed-capital’ investment and ownership by the SBNSW in the SBS actually meant when it came making a decision in how to exit the SBS or who was in a position to decide on any merger agenda.

This very issue was exposed and proved to be very important when the Co-Operatives decided to challenge the SBNSW’s and NSWG’s position on the ‘Conflict of Interest’ issue.  The Co-Operatives stance proved correct and that made the options and opinions offered within the MBR all based on absolute fantasy.   This rendered the report as worthless as a reference opinion – and to make the SBS have to pay for this report  given that it was at the SBNSW’s insistence that it was commissioned – it is more famous by what it did not investigate.  The document is potentially libelous in that it mislead and misrepresented known facts to everybody who read it.

Given the nature of the Co-Operatives movement – this report was also highly insultive in that the SBS members were never considered  in the wash of options or opinions offered – their shareholdings of the SBS were never even rated within the Macquarie Bank staff who produced the report.

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Comments:

When this report was commissioned – and in the immediate aftermath of the October ’87 market crash, the State Bank’s of Victoria and South Australia were already rumoured to be exposed and having financial difficulty – rumours about the SBNSW were also circulating.

How could Macquarie Bank produce this report without doing any due diligence on the SBNSW financial position?   The report is littered with inaccuracies regarding the SBS’s performance numbers and the numbers used had not been updated since the May ’87 annual report.   This report is evidence of how one would go about getting an independent analysis with intent to use it to achieve a greater agenda.   There is no objectivity in this report other than what the SBNSW wanted included to serve its own purpose.

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Comments:

Once again – the data the Macquarie bank people were working on was outdated relative to where the SBS was Feb/Mar ’88 and at the time the report was being complied.

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Comments:

There is no doubt that the Agency agreement between the SBNSW and SBS was of great benefit to the SBS in its formative years after the amalgamations of the Tamworth and RSL Building Societies.   But some six years into operations – the SBS was relying less and less on SBNSW agency arrangements for deposit funds.   It was now a Society with over 250,000 member accounts – some $1.4 billion in assets and growing annually at above 40%.  The SBS’s profits in the current financial year – in excess of $20 million – had injected capital reserves that had reduced gearing ratios to the low 20’s – down from almost 30-1 12 months earlier.

Why Macquarie Bank were not provided with these updated numbers as part of their research parameters can only suggest that the SBNSW did not want them to have the numbers.   Once again that alludes to a ‘paid for’ report and a report that truly served only one master – that being the combined efforts of the SBNSW and NSWG.

The pages in between 2 and 38 of this report – give a wide scoping expose on Australian Banking, Taxation, Lender of Last Resort and other data that had no real meaning or bearing to the reports findings.   They had such a low-grade of relevance they are not worth commenting on.

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The SBS and Co-Operatives Department MBR Responses:

Internally, the MBR was sent to the SBS and to the Co-Operatives Department – this was a highly confidential document as was not released to teh media until Jun ’88 – at a time when the SBNSW had made their move.   Their responses to this report can be read using the links provided below:

Page 1 of Denis Cleary’s Response:

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Page 2 of Denis Cleary’s Response:

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Page 3 of Denis Cleary’s Response:

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Page 4 of Denis Cleary’s Response:

Comments:

The Appendix data is included in the download link above and here –  WORDPDF:

The SBS response from Cleary is naturally defensive and gives a much truer perspective from the SBS’s position  on the MBR … and rightfully so.   The Appendix data included with the response counters anything the MBR tried to offer up.  Cleary’s comments are worth reading in full – they ask of and cause reason to try and understand why the SBNSW ignored this rebuttal submission.

Yet – and to be somewhat critical in a hindsight way, at this point Cleary and his Executive’s understanding of the legal ramifications of the ‘conflict of interest’  position was not appreciated.  Had the SBS sought independent legal opinion over the SBNSW’s ownership and entitlements attached to the SBS ‘fixed-capital’,  and the Board representation it represented, and how the formation structure of the SBS was arranged in circumvention of the newer 1967 Legislative Building Society Act – then a sterner defence of the SBS and its members might have been in the offering.    Perhaps this was not possible given the SBNSW’s involvement and how close they would be to any decision to seek Independent Legal advice – but if there was concern, and there should have been,  about the legal structure of the SBS – the SBS members would have been best served had such advice been sought regardless of the SBNSW’s attention.

At the time Cleary had control of the SBS Board – and perhaps his thinking was that control was absolute and assured – if so this was a serious over-estimation of his perspective of control of the SBS Board.

Cleary’s position at this time was also clouded by other issues when this report was released.  He was in a personal feud with John O’Neill over the SBNSW GM position that had been ongoing since July ’87.  Cleary’s intent now was to deny the SBS to O’Neill – he was caught up in his own revenge game and this proved to be a distraction to the defence of the SBS against the declared intentions of the SBNSW and NSWG once Greiner became Premier.   In addition, and in Part 5 of this expose – it will be revealed how Cleary had agreed to allow the SBNSW to send its own team to investigate the SBS Treasury and its profits and try to determine whether they were real – and if so how the profits were being made.   This investigation was happening at the same time that the MBR was released to the SBS.  Cleary had a lot on his plate – and he and his Executive team made some serious misjudgments and mistakes –  more on this in Part 5 …

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MBR Response – Dept Co-Operatives:

The Co-Operatives response is more balanced – yet proposes something completely opposite to what the SBNSW had in mind – [see page 5] – please see copy below of final page – [page 6] – for Co-Operatives summary  perspective on MBR –

Page 6 – [final page] – of Co-Operatives MBR response:

Comments:

These comments clearly indicate that a ‘tender’ process should not be denied the SBS members.

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In fact – on page 5 of the same response [see below] – the Co-Operatives Minister and Registrar talk about ‘strong competition to St George and the Savings Banks.’ by such a merger.

Page 5 of Co-Operatives MBR response:

Comments:

The Co-Operatives view that the SBS would make a perfect fit with the ‘Hunter’ – i.e. Newcastle Building Society and ‘Illawarra’ – i.e. Illawarra Building Society, would be a perfect fit – should have made the end-game sale of the SBS to St George worthy of an investigation as to why all protocols and advice by those in a position to best judge what is right for the SBS members – were ignored and denied.

The summary comment on the MBR was that it was largely laughed out-of-town, and discounted by everybody except the SBNSW and the NSWG.

In the ensuring months they would both use the MBR to further their claims on the SBS – and this should have been reason for the Co-Operatives Department to step up which they did in May ’88 – but by July ’88 all Government opposition had ceased and the SBS Executive had all be dismissed or sent on administrative leave.  The ‘tender process’ suggested by the Co-Operatives Dept was never offered to the SBS members.

Everybody just rolled over and allowed the SBS members and staff to get shafted … some 24 years later this expose hardly does justice to the corruption and fraud that occurred … as this story becomes more widely distributed – and the media begin to understand the complexities in what actually happened – perhaps some justice might be served upon those responsible.

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Part 5 … continues … use link below …

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Link to all previous chapters for –

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

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The EYE-BALL Opinion … Without Prejudice …

EYE-BALL’s Human Evil Exposed – John O’Neill (CEO-ARU) … Part 3

The-EYE-BALL-NovelZone Header
Title:
Human Evil Exposed –
John O’Neill (CEO-ARU) … Part 3


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.

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Part 3 commences … The 1931 Amalgamation Agreement …

Let’s put some sober perspective to the events thus far – the Document Uploads  are incriminating – and the actions of the NSW Premier and his Minister during 1981 – ’82 warrant closer inspection by Law Authorities.  But in reality what harm did they do at the time?It was a ‘Clampet’s’ conspiracy based on a 50 year feud with the other ‘hillbilly’ that had the Federal Government at their back.

The real harm came later when Premier Greiner took over from Premier Unsworth who succeeded Premier Wran – and that first call was the SBNSW MD – [O’Neill] – coming cap in hand wanting leave to merge the SBS with the SBNSW … as was his perspective in what was supposed to happen after the 1931 Agreement was rescinded.

O’Neill took over from Whitlam and even that process was dictated by ‘political influence’ – the 14 odd candidates in line before O’Neill who as the SBNSW Company Secretary – has opportunity to see all the other candidates resume’s before he submitted his own – even that process was corrupted … but Mr O’Neill who according to his recount of the event – ‘performed well in the interview process’ to leap-frog all the other candidates – as if that would be enough to become the MD of a Bank.

Well – it can be said the SBNSW got what it deserved – an MD with no Banking knowledge or experience – and a political appointee who was no Nick Whitlam.   It is easy to say that O’Neill ran amuck with the thirst for power the position gave him, and as so often happens when people overreach their ability – O’Neill was in trouble within months of the appointment.  He just had no head for understanding Treasury functions and big ticket Banking.   If the SBNSW was a public entity – smart players would have shorted the stock with O’Neill’s appointment …

This walk down memory lane is important to gather an understanding of what was slight of hand oversight by a Premier and other Government agents and what was all overkill.   The 1978 – ’82 formation of the SBS was flawed in so many ways – and should never have been allowed to happen as it did.  Just what part the Minister of Co-Operatives had in facilitating the flawed structure can be seen through the document uploads – had he not been serving as ‘Special Minister assisting the Premier’ … as well as the Co-Operatives Minister – the outcome may have been different.

To expand on what the 1931 Amalgamation Agreement meant to the SBNSW – [Rural Bank and Government Savings Bank of NSW (GSB) – as it was known previously] –  the motives of why the CSB and Federal Government played hard-ball have to be understood – the following is a timeline of these motives –

  1. First off the 1931 Amalgamation Agreement – that was the CSB and the Federal Government wanting to get their hands on the Government Savings Bank [State Bank] – the Introductory Judgement link upload would have explained all that.  How they did it was tricky and in all honesty – no one alive can tell it like it really happened.  From the research undertaken thus far – it was probably more about personalities – Jack Lang being the NSW Premier and bully – and Prime Minister Scullin and the CSB Commissioners wanting to take him down a peg.  But let’s live with the idea that the State Bank got a raw deal out of the 1931 Amalgamation Agreement – and as Political beasts go – Jack Lang was an elephant in the room and a tough nut to handle.

A perusal of the Australian National Archives yields some colourful events in Jack Lang’s career, and it is easy to form the opinion that he was a Union Thug among many other things.   With a booming voice and strong following he didn’t take prisoners – the term ‘Lang’s Gang’ is littered throughout this historical reference library.    For him to have even become NSW Premier was an achievement given his origins.   In the big league of Federal and State politics he would have been easily out-matched – and this proved so in this dispute over the GSB closing its doors.

  1. For nigh on 50 years – [1931 – ’81] – the State Bank sat back and received 50% of all the CSB profits from its NSW operations.  This was a tidy sum – and the table below gives you some idea of the annual contributions from the CSB to the SBNSW … and the grand total up until 1981 was $122 million.
Date: SBNSW Share of Profits (£’s up till 1965. converted to $’s^2) Date: SBNSW Share of Profits (£’s up till 1965. converted to $’s^2) Date: SBNSW Share of Profits (£’s up till 1965. converted to $’s^2)
31-Dec-31 $119,222 30-Jun-48 $885,842 30-Jun-65 $2,062,290
30-Jun-32 30-Jun-49 $837,920 30-Jun-66 $2,567,618
30-Jun-33 30-Jun-50 $872,708 30-Jun-67 $1,720,517
30-Jun-34 $147,870 30-Jun-51 $946,242 30-Jun-68 $1,616,997
30-Jun-35 $313,892 30-Jun-52 $901,718 30-Jun-69 $922,798
30-Jun-36 $457,260 30-Jun-53 $905,070 30-Jun-70 $1,201,595
30-Jun-37 $434,896 30-Jun-54 $1,200,736 30-Jun-71 $2,555,362
30-Jun-38 $393,790 30-Jun-55 $1,104,916 30-Jun-72 $3,219,100
30-Jun-39 $432,908 30-Jun-56 $1,051,934 30-Jun-73 $3,633,870
30-Jun-40 $519,178 30-Jun-57 $788,772 30-Jun-74 $2,058,772
30-Jun-41 $514,722 30-Jun-58 $1,081,592 30-Jun-75 $3,029,531
30-Jun-42 $995,786 30-Jun-59 $1,014,142 30-Jun-76 $7,780,872
30-Jun-43 $392,598 30-Jun-60 $1,121,862 30-Jun-77 $10,124,000
30-Jun-44 $498,782 30-Jun-61 $1,284,216 30-Jun-78 $12,214,000
30-Jun-45 $802,174 30-Jun-62 $554,156 30-Jun-79 $12,966,000
30-Jun-46 $870,908 30-Jun-63 $1,357,836 30-Jun-80 $13,675,000
30-Jun-47 $880,694 30-Jun-64 $2,412,096 30-Jun-81 $14,771,000
Total Sum 1931-1981 = $122,215,760

Just to further put this number into perspective – the CSB’s 50% profit hand-over for the ’82 – ’87 period was $138 million – which made up a large part of the $330 million settlement the CSB paid over to the State Bank coffers under Court ordered compensation.

Savings Banks were becoming more profitable and this was recognised by the SBNSW and Premier Wran – they wanted a shot at the profit pool and the SBS became their ‘pawn’ in the game to get rid of the 1931 AGreement.   The increased profit contribution during the late 70’s as shown above confirms this.

How these numbers actually compares with the State Bank’s Trading Bank operations – [Rural Bank as it was known at the time] – overall performance and profit results is not known.  The State Bank records have been a hard act to track down – first the sale to Colonial Mutual and then to the Commonwealth Bank (CB) – the CB have some records and the research is still awaiting an outcome decision on the Legal documents covering the 1982 – ’87 Court trial, and some of the State Bank records that relate to the Colonial Mutual takeover – if they have them.

On documents – Westpac (WBC) – were just outright assholes and never even wanted to talk about what documents they may have had, or it they would agree to share them.  They came into the equation when St George Building Society took over the SBS, and then became St George Bank before they were taken over by WBC.

I can understand why WBC don’t want to play the game – their takeover of the SBS has legal uncertainty in Law as pointed out through the document discovery and Zombie-Leaks uploads and comments made to those documents.    How anyone could figure how to unwind or determine how to settle something like that is for Lawyers and smarter people – if it can be done at all – and would you want to even try?

The State Bank’s reserves at the beginning of 1988 shows  reserves of $651 million.   These reserves were up from $359 in 1984 and $607 million in 1987.  It would appear that the NSWG got most of the $330 million settlement from the CSB.   This is hard to understand – and what did the NSWG do with these funds?  There is another explanation – the SBNSW made heavy losses on Bank loans in the aftermath of the ’87 crash – perhaps the $330 million was spent covering these loses ans the $44 million increase in reserves in the 1988 accounts represents the unused portion of the $330 million – this scenario would mean the NSWG never received any of the $330 million except for costs to cover its own legal endeavours.   Documents that explain how the $330 million was disbursed have continued to evade the researcher’s efforts.   It is not that important – the CSB paid out and the NSWG got value either directly or as a substitute for bailing out the SBNSW in a time of crisis.

  1. History once again teaches us – the Commonwealth Bank has been involved in many mergers, some of which have brought records pre-dating the establishment of the Commonwealth Bank itself. These mergers include:
  • 1913: State Savings Bank of Tasmania (1902-1913) – incorporating:  Post Office Savings Bank of Tasmania (1882-1902)
  • 1920: Queensland Government Savings Bank(1916-1920) incorporating:
    • Moreton Bay Savings Bank (1856-1865)
    • Ipswich Savings Bank (1861-1866)
    • Toowoomba Savings Bank (1862-1867)
    • Government Savings Bank of Queensland (1865-1916)
  • 1931: State Savings Bank of Western Australia(1926-1931) incorporating:
    • Government Savings Bank of WA (1906-1926) which had previously incorporated Post Office Savings Bank of Western Australia (1863-1908)
  • 1931: Government Savings Bank of NSW(1871-1931) incorporating:
    • Savings Bank of NSW (1832-1914) which had previously incorporated NSW Savings Bank/Campbell’s Bank (1819-1833) and Port Stephens Savings Bank (1830-1832)
  • 1989: ASB Bank Ltd(1987-date) 75% holding expanded to 100% in 2000, incorporating:
    • Auckland Savings Bank/ASB Trust Bank (1847-1987)
    • Westland Bank
    • Sovereign Ltd (1989-date)
    • Retail stockbroking and fixed income operations from Warburg Dillion Read (1997-date) which had previously incorporated S G Warburg & Co and Dillion, Read & Co
  • 1991: State Bank of Victoria/SBV
    • (1842-1991) formerly Savings Bank of Victoria/SSB and Savings Bank of Port Phillip
  • 2000: Colonial Limited, formerly Colonial Mutual(1873-2000) incorporating:
  • Trust Bank (1991-1999) formed out of a merger between Hobart Savings Bank/Savings Bank of Tasmania (1845-1991)
  • Legal and General, Australia (1953-1998)
  • State Bank of New South Wales (1931-1994), formerly the Rural Bank
  • Prudential Corporation – Australia & New Zealand (1925-1998)

When one looks at this list of mergers and amalgamations – the Commonwealth Bank pretty much got whoever they wanted starting with the Savings Banks of Tasmania, Western Australia, and Queensland before they took over NSW in 1931.

The demise of the SBNSW despite all efforts to stay afloat post the ’87 crash, eventually folded like a cheap tent when the $1.8 billion in losses became too much to handle.  They first went to Colonial Mutual and then the CB … a bit like the Canadian Mounties – whose motto is ‘they always get their man’ – took another 70 years to finally swallow up what remained of the SBNSW as a part of Colonial Mutual.

In some regards – one has to wonder what was all this posturing by the NSWG and SBNSW was about in the period 1976 – ’82 – and then through the Court case and appeals process up until Dec ’87.  Given the CSB to SBNSW profit contribution the 1931 Agreement guaranteed – and the ’82 – ’87 contribution under that agreement being $138 million – the hindsight view would have to be that the SBNSW would have been better off continuing to receive the 50% from the CSB … as opposed to pursuing the whole SBS exercise …

The CSB were Bankers – the SBNSW were wannabe Politicians playing at being Bankers – and history proves this.

As all State Bank’s go and before their demise  – they were the most politicised of all Political appointments – there is no doubt John O’Neill was political given his family background.  His knowledge about Banking was his employ at the SBNSW – serving in their Legal Dept under Paul Kearns – and then as Whitlam’s lap-dog from 1981.   Whitlam had Banking credentials – bloody fine ones at that – and he was a ‘blue-blood’ in Labour Party terms.  At this stage O’Neill was a ‘pimple’ – he clutched onto Whitlam’s curtails learning and being the ass-bunny looking for advancement … in the early days O’Neill was a babe in the game – both in Banking experience terms and Political savvy – yet by the time Whitlam’s term expired – O’Neill was in his mind the next in line to succeed.  EGO’s are the cause of all failures – a famous statement made in a ‘Dirty Harry’ movie says – ‘a man has to know his limitations’ … for John O’Neill those limitations have been exposed many times in a career spanning Banking, Sports Administration in ARU and Soccer, NSW Tourism Ambassador, and whatever else – yet his failures in some of these positions have never really been exposed in a mainstream way.

Small men try to puff themselves up to cover their insecurities – Whitlam was always the elephant in the room – O’Neill did his best to measure up – and in his eyes he made good when he received the SBNSW MD appointment.  What he did once he got there is the reason for this expose into why John O’Neill is worthy of the title – ‘Human Evil Exposed’ …

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Part 4 … continues … see link below …

Link to all posted chapters for –

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

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The EYE-BALL Opinion … Without Prejudice …

EYE-BALL JokeZone – ‘Various – 24’

January 9, 2012 Comments off
The-EYE-BALL-JokeZone
EYE-BALL JokeZone – ‘Various – 24:
Posted – 9th Jan 2012
Smiling

A man sitting in the bar found that the front of his trousers was all wet. Turning to the man on his right he asked, “Did you pour beer on my trousers?”

“Nope,” came the reply.

Then, turning to the man on his left, he asked, “Did you pour beer on my trousers?”

The man also replied, “Nope.” “Then it must be an inside job,” he murmured.

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Smiling

A man took his wife deer hunting for the first time. After he explained the basics to his wife, he told her the most important piece of information: Whenever you shoot something, make sure to claim it right away or the first person who gets to your kill can claim it as their own, so be quick if we want to have deer meat in the refrigerator!

So they departed to their deer boxes and waited for some deer. Minutes later he heard his wife’s gun go off. The husband decided to make sure she went to claim her kill instead of giving it away to someone.

When he got to his wife she was arguing with another man who was shouting and aving his hands in the air: Okay! Fine lady this is YOUR deer, but do you mind if I take my saddle off your deer before you take it away?!?!

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Smiling

This story is from one of the ” lucky ” passengers on board a Northwest Airlines flight to Boston during hurricane “Bob”.

The captain did his best to skirt the edge of the storm, but it was a pretty rough ride just the same – rough enough that the flight attendants were ordered to strap themselves into their seats for about half an hour, and many of the passengers were putting the little plastic-lined bags in their seat pockets to good use.

When the turbulence finally abated, the flight attendants unbuckled themselves, and the captain’s voice came on the intercom. “Well, folks, that was quite some ride, wasn’t it?  But we came through it fine, just the way we always do, and I’m happy to report that it looks like the remainder of our trip should be much calmer. On behalf of myself and today’s flight crew, I’d like to thank you very much for your calmness and cooperation, and extend our best wishes for a pleasant stay in Boston.”

After a short pause and several clicks – “Jesus Christ – what a bitchin’ ride! Boy – I sure could use a cup of good strong coffee and a blow job right about now.”

As a stricken stewardess dashed up the aisle to the cabin (to inform the captain that his intercom was still on), one of the passengers called after her, “Don’t forget the coffee!”

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Smiling

A helicopter was flying around above Seattle yesterday when an electrical malfunction disabled all of the aircraft’s electronic navigation and communications equipment.

Due to the clouds and haze, the pilot could not determine the helicopter’s position and course to steer to the airport. The pilot saw a tall building, flew toward it, circled, drew a handwritten sign, and held it in the helicopter’s window.

The pilot’s sign said “WHERE AM I?” in large letters.

People in the tall building quickly responded to the aircraft, drew a large sign, and held it in a building window.

Their sign said “YOU ARE IN A HELICOPTER.” The pilot smiled, waved, looked at his map, determined the course to steer to SEATAC airport, and landed safely.

After they were on the ground, the co-pilot asked the pilot how the “YOU ARE IN A HELICOPTER” sign helped determine their position.

The pilot responded “I knew that had to be the MICROSOFT building because, similar to their help-lines, they gave me a technically correct but completely useless answer.”

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Smiling

A lady goes to the doctor and complains that her husband is losing interest in sex.

The doctor gives her a pill, but warns her it is still experimental and tells her to slip it into his mashed potatoes at dinner.

So, that night at dinner, she does. About a week later she’s back at the doctor. She says, “Doc, the pill worked great!! I put it in the potatoes like you said! It wasn’t five minutes and he jumps up, rakes all the food and dishes on the floor, grabs me, rips all my clothes off and ravages me right there on the table!”

The doctor says, “I’m sorry, we didn’t realize the pill was that strong. The foundation will be glad to pay for any damages.”

“Naah… “, she says, “that’s okay. We aren’t going back to that Restaurant anyway.”

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Smiling

A woman got on a bus holding a baby.

The bus driver said, “That’s the ugliest baby I’ve ever seen.”

In a huff, the woman slammed her fare into the fare box and took an aisle seat near the rear of the bus. She fumed for a few stops & started getting really worked up.

The man seated next to her sensed that she was agitated and asked her what was wrong.

“The bus driver insulted me,” she fumed.

The man sympathized and said, “Why, he’s a public servant and shouldn’t say things to insult passengers.”

“You’re right,” she said.

“I think I’ll go back up there and give him a piece of my mind.”

“That’s a good idea,” the man said. “Here, let me hold your monkey.”

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Smiling

One fine day an older couple were at home, and the wife said to her husband, “I got a couple of errands to run, and when I’m done I’m going to stop by pick us up a couple of ice cream sundaes. What would you like on yours?”

The husband replied, “I want some hot fudge, nuts, whipped cream, and a cherry on top. But you better write that down, because knowing your memory you’ll forget for sure.”

“I will not!” replied the wife indignantly. “There’s absolutely nothing wrong with my memory.”

“Suit yourself,” said the husband, “but I know you won’t get it right.”

So the wife takes off, and after running her errands, she had completely forgotton about the sundaes and came home with a couple of deli sandwiches instead.

When she got home and her husband looked at the sandwiches he exclaimed, “I knew it! I just knew you wouldn’t get it right. I explicitly told you that I didn’t want any mustard or tomatoes on mine!”

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Smiling

The principal had a problem with some girls who were starting to use lipstick.

When applying it in the bathroom they would blot their lips on the mirrors, leaving lip prints. Before it got out of hand, he thought of a way to stop it.

One day he gathered together all the girls who wore lipstick. He then took them into the bathroom and lectured about how hard it was to clean the lipstick off the mirrors. The principle then asked the custodian, who was present, to demontrate.

The custodian took a long handled brush, dipped it into the toilet and vigorously rubbed the lipstick off the mirror. From that day forward, the mirrors stayed lipstick free.

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Smiling

Little Bobby walked into his parents’ bedroom while they were making love.

“What’re you doing?” asked the child. ”

Why, ‘er, we’re playing poker, son,” replied his father.

“What’s mama doing?”

“She’s my partner.”

Bobby ambled out of the bedroom, and as he walked down the hall, he heard noises in his sister’s bedroom. He stopped, opened the door and discovered the girl having intercourse with her boyfriend. “What’re you doing?” asked Bobby.

“We’re playing poker,” replied his sister.

“And what about him?” asked the child, pointing to her sister’s pal.

“He’s my partner.”

The youngster left the room and went down the hall to the room of Roger, his teenage brother, who was masturbating furiously.

“What are you doing?” asked the child.

“I’m playing poker,” replied Roger.

“Where’s your partner?”

“Listen,” said the older brother, “when you’ve got a good hand, you don’t need a partner!”

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Click here to see the EYE-BALL JokeZone Index:

 

SmilingMost Popular/Visited EYE-BALL JokeZone links as at – 15th Dec 2011:

  1. Stand Alone Joke – Little Johnny and Sis’
  2. YouTube Post – ‘Charlie Sheen and his Goddesses’ – as real as it gets …
  3. Stand alone JokeSocially Unacceptable Humour
  4. Stand Alone Joke – The CIA Admission Test
  5. Stand Alone Joke – Santa Clause – an Engineer’s Perspective
  6. Stand Alone Joke – Various – 18
  7. Stand Alone Joke – Moral Story – Bullshit’s Reward –
  8. Various – More ‘Little Johnny’ Jokes – 1
  9. Stand Alone Joke – PM Gillard and some of her Cartoons –
  10. Stand Alone Joke – A Deserted Island Joke

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Click here to see the EYE-BALL JokeZone Index:

SmilingThe EYE-BALL JokeZone Index is an Australian produced site and presents a collection of Australian and International humour alike. You’ll find the content either in Joke format, a Video or YouTube upload, or in some stunningly beautiful Nature and other Worldly images presented in PPS format. You’ll also find some inter-active stuff if you’re so inclined. Bookmark the site and come back often as content is continuously being added and highlighted with “NEW”. Hope you smile a lot – it is about the only thing that keeps this World together … let humour do it for you and be happy !!! If you want to contribute and send content – please use this E-Mail Address: – be sure to include your ‘handle’ or name for accreditation purposes … all messages will be reviewed for suitability – no Porn, explicit violence or abuse please.
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