I’ve covered a lot of bank scandals, but this one is just disgusting.
Banks have ruined lives because they kept pushing credit on people with gambling problems.
They have gone to extraordinary lengths, even flying doctors interstate for consultations, to try and deny insurance claims.
Financial advisers have lied, cheated and swindled their customers, lining their pockets at the expense of people who trusted them with money that was supposed to see them through retirement.
Through systemic neglect or greed, or both, our greatest financial institutions have charged people fees for services they never got, taken money from the dead, gouged home-loan borrowers, ripped off superannuation savers – the past few years has been a galaxy of rorts.
In the witness stand at last year’s royal commission into the strife-torn sector, witness after witness choked back tears as they recounted the bastardry of the banks.
But allegations of turning a blind eye to people paying for child abuse? This is a new low.
In its lawsuit against Westpac, Austrac says it starting warning banks about the dangers of “frequent low-value payments to the Philippines and other jurisdictions” in 2013.
The regulator issued more warnings in 2015 and 2016, including a brief in December 2016 specifically “detailing the key indicators for the purchase of live-streaming child exploitation material”.
And inside the bank, Westpac itself knew there were “heightened child exploitation risks associated with low-value payments” through channels including the bank’s LitePay platform, according to Austrac.
The bank set up a system that was supposed to detect these transactions – but it didn’t work. By February 2017, it hadn’t triggered once.
All the time, the money flowed in miserable dribs and drabs from Westpac’s customers to people in the Philippines, according to Austrac.
“Low value” the payments might have been, but the damage to children’s lives caused by these predators, by these transfers of a few hundred dollars at a time, is immense.
At least one Westpac customer, “Customer 1”, is alleged to have sent money to someone who was providing “live streaming of child sex shows and offering children for sex”, Austrac says.
In the worst known case in the Philippines, the crime ring run by Australian child rapist Peter Scully, we are talking about murder.
What did Westpac’s “Customer 1” get for the $132,000 he allegedly sent through Westpac’s systems to the Philippines?
The mind reels.
Austrac sheets the blame home to the very top of the Westpac corporate tree, saying the contraventions are a result of the “indifference” of its board and management.
The bank’s boss, Brian Hartzer, furiously denies this – he says he has been working hard to fix the problem.
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If so, why is it that risks from payments made outside the LitePay system remained unidentified by the bank as recently as Wednesday, when Austrac filed its lawsuit?
As for the chairman, Lindsay Maxsted, who has been on the board for a decade in which the bank has been beset by scandal after scandal, no one knows what he thinks.
Chairmen are ultimately responsible for matters of corporate governance and culture – whether a culture of greed, as royal commissioner Kenneth Hayne put it, or indifference, as Austrac alleges.
But, almost unbelievably, Maxsted hasn’t said a word, even while the bank faces one of its sternest tests since it was founded in 1817 as the Bank of New South Wales.
Talk about indifference.
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