Tuesday, September 2, 2008

SFO Role even more vital now


The New Zealand Herald today calls for the Serious Fraud Office to be beefed up rather than axed. Avoiding the corruption arguments I blogged yesterday, the Herald looks at fraud.

There are good reasons to retain the Serious Fraud Office. One of the most obvious was mentioned last week by the Finance Minister, Michael Cullen, when he noted New Zealand was facing the most complex and challenging economic forces for 20 years. The fall-out from this will demand a dedicated fraud-detection agency.

The editorial calls it a fortuitious twist of fate that the Peters inquiry has delayed its fate, also accusing Dear Leader of plumbing 'greater depths of shamefulness' for accusing the SFO of leaking to National.

Putting aside what it calls the wilful underming of government agencies by Clark, it says an extremely busy period lies ahead for the SFO.

This seems not yet to have dawned on the Government, which, in its rush to discard the agency, has forgotten its genesis. This lay in the debris of the 1987 sharemarket crash. Twenty-one years later, as Dr Cullen has pointed out, strong headwinds are again at work. On this occasion, finance companies have shown the greatest fragility, much to the cost of many elderly investors.

Instead, the government has said the SFO's replacement body would focus more on gang crime. But the Herald says current tough times will increase the scope for fraud and it concludes:

In only a few months, events have proved the error of the Government's ways. It should acknowledge this by granting the Serious Fraud Office more than just a stay of execution. The fate of a specialist fraud unit should not rest on the outcome of the general election. Indeed, at this very time, its muscle should be being strengthened.

1 comment:

Anonymous said...

You - or the Herald - are shooting at the wrong target.

I hate to say this, but Helen is right: NZ does not need a dedicated fraud unit

Sorry, but the SFO has done nothing during its time except prove the NZ has very low levels of corporate fraud.

That is a fact - not opinion. Remember back - the SFO was a response to Labour voters who lost money in the sharemarket crash. It didn't find fraud so much as economically and financially illiterate Kiwis who flushed their money away.

Same thing this time around: none of the failing finance companies are failing due to "serious fraud" - its just stupid Labour-voting investors who think the state has some responsibility to remove risk from their speculations!

Yes NZ has Gang Crime - and of course the Gang affiliated Maori Party. We do need stronger laws to deal with gangs (e.g. a defence to murder of reasonable suspicion of the "victim" being a Gang member of affiliate)

But the real problem in NZ is precisely those cases where the SFO have investigated successfully, and where they have repeatedly found crime: political and state service corruption

That's the problem! not "financial fraud"! And where you are right, is that moving the "SFO" into the Labour-ridden police will not solve this problem one bit.

What we need is a plenipotentiary Anti-Corruption commission, an truly independent body with its own powers to investigate, to compel testimony, to fire ministers, MPs, and civil servants, to seize their assets and to impose jail terms.

It should be targeted squarely at the known corrupt bodies in NZ politics: the NZ Labour party, NZF, the unions, the greens and their eco-terrorist allies.

And it should not stop until they are no longer part of life in NZ.