Please remember to get written authorisation for expensing your spending on wine cellaring.
Please remember to get written authorisation for expensing your spending on wine cellaring.

BusinessJune 20, 2019

Hisco’s ANZ exit is a hot mess of double standards and unanswered questions

Please remember to get written authorisation for expensing your spending on wine cellaring.
Please remember to get written authorisation for expensing your spending on wine cellaring.

John Key insisted that the CEO of the bank had been treated in the same way a junior teller would be. Can anyone take that seriously, asks Cat MacLennan

When I was a lawyer at Manukau, we used to sit in the lawyers’ room and marvel at the lenient sentences given to the rich, to sports stars and to other privileged people – most of whom were white.

Then we would look at each other and say, “that would never happen to our clients”.

The legal system is often accused of having one law for the rich and one for the poor. It is an accusation that I have found to be justified in my years of acting for people who are underprivileged and brown.

But it is not only the legal system that displays this double standard: we see it also in our society as a whole.

I have been stunned since Monday by the number of commentators stating that former ANZ chief executive David Hisco’s unauthorised spending is a minor infraction or small discrepancy. We do not know exactly the amount involved, but it has been suggested it is around $50,000.

We are not privy to all the details of the Hisco case, but I know this without a shadow of a doubt: one of my clients who took $50,000 to which he or she was not entitled would be prosecuted and convicted. Further, my client would be likely sent to jail.

I have acted for many beneficiaries charged with benefit fraud and pursued for the rest of their lives to repay the full sum involved – even when they have also served a jail sentence and will be living in grinding poverty for the rest of their lives.

There are always blaring headlines and editorials and sermons when beneficiaries are found to have taken money to which they weren’t entitled. I have never heard that characterised as minor.

ANZ’s PR staff clearly provided chairman Sir John Key and acting chief executive Antonia Watson with the same talking points. They both repeatedly said that the bank had to ensure that Hisco was treated the same as a new teller would be.

That was incredibly clumsy because anyone listening to those comments knows that a junior teller would surely be treated completely differently from the way Hisco has been.

A junior teller would be dismissed instantly, would be required to repay the money, would not be given a payout of a year’s salary. They may even be prosecuted.

There remain many unanswered questions about Hisco’s spending and departure. Here are some of them:

  1. Hisco said the previous group chief executive of the Australian bank had verbally authorised the spending for private chauffeur trips and wine cellaring. Surely all of Hisco’s entitlements would have been included in a lengthy and detailed written employment agreement? If further entitlements were to be added, surely there would be an addendum to the employment agreement? Did ANZ check with the former group chief executive to find out whether it was correct that he or she orally sanctioned the spending? Such an arrangement appears strange and unsatisfactory. That one person could authorise such spending by himself or herself, and not record or report such authorisation to others, seems very poor process. What exact authorisation did that person have to grant such approval?
  2. What were the exact words used in the miscoding by Hisco? Finding out the precise wording would help to explain Hisco’s thinking when he miscoded. Presumably each chauffeur-driven trip would need to be recorded both in terms of mileage and destination, but also purpose. If Hisco could not find appropriate codes for the private cars and wine storage, the correct procedure would have been to request that new codes be created.
  3. Why is Hisco not being asked to repay the funds? A teller who took unauthorised money would be required to repay it all, irrespective of whether they said they believed it was okay to take it.
  4. What legal advice did the bank and the board take about the unauthorised expenditure? Did any of that advice dealt with criminal law? Did any advice relate to section 220 of the Crimes Act 1961, which deals with theft by a person in a special relationship?
  5. Has a review been conducted of Hisco’s other expenditure and of all ANZ executive expenditure?
  6. Is a review being conducted both of ANZ’s accounts section and of board processes and oversight? The fact that large sums of unauthorised expenditure could continue for nine years demonstrates that both processes and oversight are flawed.

I do not accept that $50,000 is a small sum of money. For me, and more than half of New Zealanders, it’s more than our entire annual income.

I have been on the board of a non-governmental organisation for three years. We are not paid a cent for our work, but I and the other board members would consider we had completely failed in our responsibilities if we let unauthorised expenditure go unchecked for nine years.

Catriona MacLennan is a barrister, journalist, author, report writer, television presenter, media commentator and project director.

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