View source for WA Inc

{{Short description|1980s Australian political scandal}}
{{Use dmy dates|date=January 2021}}
{{Use Australian English|date=January 2012}}
[[File:Curtin Foundation.jpg|thumb|right| A [[John Curtin Foundation]] gathering ''Left to right, rear:'' Denis Cullity, John Horgan, [[Alan Bond (businessman)|Alan Bond]], [[Laurie Connell]], [[Ric Stowe]], James McCusker, Rod Evans; ''Front:'' [[Kevin Parry]], prime minister [[Bob Hawke]], state premier [[Brian Burke (Australian politician)|Brian Burke]], [[John Roberts (Australian businessman)|John Roberts]] and former Perth lord mayor [[Ernest Henry Lee-Steere|Ernest Lee-Steere]]]] 
'''WA Inc''' was the name for a set of [[public-private partnership]]s in [[Western Australia]] in the 1980s associated with the [[Western Australian Development Corporation]], which became a [[political scandal]]. The [[Government of Western Australia|state government]], which was led for much of the period by [[Premier of Western Australia|premier]] [[Brian Burke (Australian politician)|Brian Burke]], engaged in business dealings with several prominent businessmen, including [[Alan Bond (businessman)|Alan Bond]], [[Laurie Connell]], [[Dallas Dempster]], [[John Roberts (Australian businessman)|John Roberts]], and [[Warren Anderson (Australian businessman)|Warren Anderson]].  These dealings resulted in a loss of public money, estimated at a minimum of $600 million and the insolvency of several large corporations.

Bond and Connell were major contributors to the party in government, the [[Australian Labor Party (Western Australian Branch)|Labor Party]] and its remarkable fundraising structure, the [[John Curtin Foundation]].<ref name=barrass09>{{cite news |title=Business and Labor at the birth of WA Inc |first=Tony |last=Barrass |newspaper=The Australian |date=8 August 2009 |url=http://www.theaustralian.com.au/news/business-and-labor-at-the-birth-of-wa-inc/story-e6frg6no-1225759205812 |access-date=2010-11-20}}</ref> A [[royal commission]] (the ''Royal Commission into Commercial Activities of Government and Other Matters'') was established in 1990 by Labor premier [[Carmen Lawrence]] to examine the dealings.

<blockquote>Connell alleged [in evidence to the Commission] that Hawke dropped a proposed gold tax after Connell and various Perth high-flyers donated $250,000 each to Labor during an infamous lunch in Brian Burke's office in 1987—a claim the former PM vigorously denied.

Burke's loyalty to those who had donated their efforts (and money) to Labor was no less fervent.  Taking the John Curtin Foundation axiom to the next level, Burke created the [[West Australian Development Corporation]] and installed fellow Catholic John Horgan (pictured second from left, top) on $800,000 a year, an extraordinary figure for a public servant not only then but now.—Journalist Tony Barrass, 2009.<ref name=barrass09/></blockquote>

In 1991, political scientist [[Patrick O'Brien (political scientist)|Paddy O'Brien]] identified the members of the government most associated with WA Inc deals as premier Burke and his successor [[Peter Dowding]], deputy premier [[David Parker (Australian politician)|David Parker]], industrial development minister [[Julian Grill]] and attorney-general [[Joe Berinson]].<ref name=execstate>O'Brien P. ''The Origins and Development of WA's Executive State'', in ''The Executive State —WA Inc & The Constitution'', (Perth 1991).</ref>{{rp|p132}}

== Corporate failures ==
As an outcome of questionable business practices, precipitated by the [[1987 stock market crash]], several major businesses based in Perth found themselves in difficulties and ultimately went into bankruptcy.  These included:

*Rothwells. Described as a merchant bank owned by Connell, but more accurately known in business circles as a '[[lender of last resort]]', Rothwells had built up a stable of businesses it had acquired during the 1980s through aggressive takeovers.  In October 1987, investors made a run on the bank and it had to close its doors.  Burke, on behalf of the government, provided a $150 million government guarantee.  Connell had previously been the adviser to the 1983 government purchase of Northern Mining from [[Bond Corporation]] for between $7 and $12 million over value but, as Burke knew at the time and concealed from parliament, Connell was also acting for Bond Corporation.
*Bell Group, [[Robert Holmes à Court]]'s flagship company, encountered a cash crisis and Bond Corporation and the government, through the [[SGIO (Western Australia)|State Government Insurance Commission]], acquired major stakes in the business in April 1988,<ref name=wairoyc04/>{{rp|p.113}} allowing Holmes à Court to walk away with $350 million. Two years later, the SGIC had sold all the stocks at a loss of over $160 million.<ref name=wairoyc04/>{{rp|p.171}}
*Bond Corporation—see [[Alan Bond]].
*Parry Corporation—see [[Kevin Parry]].

A proposed [[petrochemical]] [[Chemical plant|plant]] was to be built as a joint venture between Laurie Connell and [[Dallas Dempster]], both being businessmen with close government connections. $100,000 was outlaid as a deposit on a block of land at [[City of Kwinana|Kwinana]] but otherwise the proposal did not proceed beyond designs and stood as a basis for fund-raising, loans, collateral transactions, development of proposed plant, management fees to Bond Corporation and, eventually, was sold for $400 million —$175 million being provided by a government agency, WA Government Holdings.

== Losses incurred by the government ==
The government had lent large sums of money, offered financial guarantees and acquired assets at inflated prices. Because of the connections between many of the deals and cross-ownership of businesses involved, it is difficult to say precisely where the government's fault started and ended.  A minimum loss to the state of $600&nbsp;million has been reported.<ref name=ramsay1>{{cite news|url=http://www.smh.com.au/news/opinion/a-role-in-the-fall-of-a-labor-mate-conveniently-omitted-from-theeulogies/2005/07/19/1121538972499.html|title=A role in the fall of a Labor mate conveniently omitted from the eulogies|author=Alan Ramsey|date=20 July 2005|work=The Sydney Morning Herald}}</ref>

In 1991, barrister [[Bevan Lawrence]] published what he regarded as a conservative itemisation of the government's actual losses. The figures are summarised as follows:

:{|
|-
| Rothwells and Petrochemicals Plant || align=right | $408 million
|-
| Purchase of Bell Group shares from Robert Holmes à Court || align=right | $155 million
|-
| Unlisted bonds purchased from Holmes à Court, later assessed as having no value || align=right | $140 million
|-
| Westralia Square ([[Old Perth Technical School]] site redevelopment) || align=right | $74 million
|-
| [[Central Park (skyscraper)|Central Park]] property redevelopment || align=right| $100 million
|-
| Grand total<ref name=execconst>O'Brien P. and Webb M. ''The Executive State--WA Inc & The Constitution'', Constitutional Press (Perth) 1991. {{ISBN|0-646-04875-9}};</ref>{{rp|p389}} || align=right style="border-top:1px solid;"| $877 million 
|}

== The WA Inc Royal Commission ==
On 19 November 1990, [[Carmen Lawrence]], the then Labor premier, announced her government's intention to hold a [[royal commission]] to "inquire into certain matters". This decision followed more than a year of strong public advocacy by the activist group, People for Fair and Open Government<ref>{{cite web | title=W.A. Inc.: Why Didn't We Hear The Alarm Bells? |author=Bevan Lawrence | work=Samuel Griffith Society | url=https://static1.squarespace.com/static/596ef6aec534a5c54429ed9e/t/5c9c62535122cf0001cc733d/1553752660426/v3chap3.pdf | access-date=16 July 2020}}</ref> headed by the premier's brother, barrister [[Bevan Lawrence]], Professor Emeritus [[Martyn Webb]] and prominent political scientist [[Patrick O'Brien (political scientist)|Paddy O'Brien]]. O'Brien edited ''The Burke Ambush'', subtitled ''Corporatism and Society in Western Australia'', which was the first substantial exposé of Burke's pro-corporate government—a collection of articles by himself and other Western Australian writers, including [[Hal Gibson Pateshall Colebatch|Hal Colebatch]], Robert Bennett, Joseph Poprzeczny, [[John Hyde (Australian federal politician)|John Hyde]], Paul Nichols, Michael McKinley, Anthony Dale and [[Tom Herzfeld]].<ref name=burkea>O'Brien, P (ed.) ''The Burke Ambush: Corporatism and Society in WA'' Apollo Press, Nedlands 1986)</ref>

The commission of three was headed by [[Geoffrey Kennedy]] and joined by Sir [[Ronald Wilson]] and [[Peter Brinsden (judge)|Peter Brinsden]], with a brief ''"To inquire into and report"'' whether there had been ''"corruption, illegal conduct, improper conduct, or bribery"'' on the part of any person or corporation in the ''"affairs, investment decisions and business dealings of the Government of Western Australia or its agencies"''.<ref name=ramsay1/>

===Absence of important witnesses===
In the introductory part of its report, the commission noted that it had <blockquote>heard from 543 witnesses encompassing 847 appearances. [...] There were, however, some who may have been able to give valuable information to the Commission, who died before the Commission hearings commenced or after they had begun. There were others who were unwilling to assist and were beyond the reach of compulsory process.<ref name=wairoyctoc>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/CE8D3BB55F141F4848256984001FAEEB/$file/tocintro.pdf WA Inc Royal Commission Report, Contents and Introduction] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.41}}</blockquote>
The following had died or been incapable on health grounds: Peter Beckwith ([[Bond Corporation]]), Bill Burgess ([[Rothwells]]), [[Robert Holmes à Court]], Thomas Hugall (Rothwells), Bruce Kirkwood ([[State Energy Commission of Western Australia]]), [[Andrew Mensaros]] (former [[Western Australian Liberal Party|Liberal]] state minister), Terence McDonnell (solicitor), and Jack Walsh (Rothwells). 
The following declined to give evidence: Yosse Goldberg (entrepreneur), Peter Mitchell (Bond Corporation), Tony Oates (Bond Corporation), and Ms Kim Rooney (wife of [[David Parker (Australian politician)|David Parker]]). Dr Shrian Oskar was serving a 6-year prison term in the UK.<ref name=wairoyctoc/>{{rp|p.44}} The witnesses whose testimony was received by the commission are listed in an appendix to the report.<ref name=wairoyc07/>{{rp|p.54}}

===Main findings===
After approximately 21 months of enquiries and hearings, the commission's final report began:
<blockquote>1.1.1 The Commission has found conduct and practices on the part of certain persons involved in government in the period from 1983 to 1989 which were such as to place our governmental system at risk. Unfortunately, some of that conduct and some of those practices were peculiar to Western Australia; but there is no reason to believe that many of the fundamental questions raised by our inquiry were unique to this period or to this State. On the contrary, as detailed studies in other States and overseas clearly demonstrate, they have been raised elsewhere as a consequence of events similar to those which we have experienced.

1.1.2 Some ministers elevated personal or party advantage over their constitutional obligation to act in the public interest. The decision to lend Government support to the rescue of Rothwells in October 1987 was principally that of Mr Burke as Premier. Mr Burke's motives in supporting the rescue were not related solely to proper governmental concerns. They derived in part from his well-established relationship with Mr Connell, the chairman and major shareholder of Rothwells, and from his desire to preserve the standing of the Australian Labor Party in the eyes of those sections of the business community from which it had secured much financial support.

1.1.3 Subsequently, Mr Dowding, as Premier, presided over a disastrous series of decisions designed to support Rothwells when it was or should have been clear to him and to those ministers closely involved that Rothwells was no longer a viable financial institution. This culminated in the decision to involve the Government, through WAGH, in the [[Kwinana Petrochemical Plant|Kwinana petrochemical project]] as a means of removing the Government's contingent liability for certain of the debts of Rothwells. Electoral advantage was preferred to the public interest.

1.1.4 Personal associations and the manner in which electoral contributions were obtained could only create the public perception that favour could be bought, that favour would be done.<ref name=wairoyc08>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/EB7A73F79B8C4FCA482569850012E10E/$file/report2.pdf WA Inc Royal Commission Report Part II (final)] 12 November 1992, at State Law Publisher, Government of WA</ref>{{rp|p.22}}</blockquote>

In an earlier finding, the commission had summarised:<blockquote>[The Government was not entitled] to risk the public resources of the State without its actions being subjected to critical scrutiny and review. Effective accountability was a casualty of its entrepreneurial zeal. Influence in the conduct of this State's public affairs was captured by a small group of self-interested businessmen.<ref name=wairoyc06/>{{rp|p.10}}</blockquote>

The commission's report included a confidential appendix (not published) containing an "outline of matters to be referred to the Director of Public Prosecutions",<ref name=wairoyc07>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/D6001C7FF97760034825698400218BD4/$file/appendix.pdf WA Inc Royal Commission Report, Appendices] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.1}} and a list of recommendations impinging on open government,<ref name=wairoyc08/>{{rp|p.6}} accountability,<ref name=wairoyc08/>{{rp|p.8}} integrity in government,<ref name=wairoyc08/>{{rp|p.11}} the Parliament,<ref name=wairoyc08/>{{rp|p.12}} the administrative system,<ref name=wairoyc08/>{{rp|p.15}} and a proposed Commission on Government<ref name=wairoyc08/>{{rp|p.16}}

===Summary of main issues===
;Report Volume I
*Natural gas sales agreements entered into by the State Energy Commission of Western Australia<ref name=wairoyc01>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/BF700EF2FC51C2A0482569840020082D/$file/volume1.pdf WA Inc Royal Commission Report, Vol.I] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.148 et seq}}
*Contracts relating to the [[Dampier to Bunbury Natural Gas Pipeline|Dampier to Perth Natural Gas Pipeline]]<ref name=wairoyc01/>{{rp|p.153 et seq}}
*Financial assistance by Government to Bunbury Foods Limited<ref name=wairoyc01/>{{rp|p.71 et seq}}
*Government Employees Superannuation Board (formerly the Superannuation Board) involvement in the Halls Head development<ref name=wairoyc01 />{{rp|p.7 et seq}}

;Report Volume II
*Government Employees Superannuation Board (formerly the Superannuation Board) involvement in the Fremantle Anchorage development<ref name=wairoyc02>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/276D079050C3CC4448256984002033D2/$file/volume2.pdf WA Inc Royal Commission Report, Vol.II] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.243 et seq}}
*The acquisition of Northern Mining Corporation NL in 1983<ref name=wairoyc02/>{{rp|p.139 et seq}}
*The [[Burswood Island Casino]]<ref name=wairoyc02/>{{rp|p.66 et seq}}
*The sale of the [[Midland, Western Australia|Midland]] Abattoir site in 1986<ref name=wairoyc02/>{{rp|p.5 et seq}}

;Report Volume III
*The purchase of the [[Fremantle Gas and Coke Company]] by the State Energy Commission of Western Australia in 1986<ref name=wairoyc03>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/F203C8F17E176F6A4825698400205641/$file/volume3.pdf WA Inc Royal Commission Report, Vol.III] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.170 et seq}}
*The Swan Building Society<ref name=wairoyc03/>{{rp|p.121 et seq}}
*The [[Teacher's Credit Society|Teachers' Credit Society]]<ref name=wairoyc03/>{{rp|p.4 et seq}}

;Report Volume IV
*The rescue of [[Laurie Connell#Rothwells|Rothwells Limited]] and continuing liquidity problems<ref name=wairoyc04>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/63BAC21E6BA5A5364825698400207E92/$file/volume4.pdf WA Inc Royal Commission Report, Vol.IV] 19 October 1992, at State Law Publisher, Government of WA</ref>
*SGIC's acquisition of shares in BHP Limited and the [[Robert Holmes a Court#The Bell Group|Bell Group]]<ref name=wairoyc04/>{{rp|p.267 et seq}}
*The [[City of Kwinana|Kwinana]] petrochemical project (PICL)<ref name=wairoyc04/>{{rp|p.7 et seq}}
*The 1988 sale of Westralia Square<ref name=wairoyc04/>{{rp|p.237 et seq}}

;Report Volume V
*The [[Kwinana Petrochemical Plant|Kwinana petrochemical project]] to the settlement on 17 October 1988
*Central City property transactions entered into from 1984 onwards by the Western Australian Development Corporation, the Government Employees Superannuation Board (formerly the Superannuation Board) and the State Government Insurance Commission<ref name=wairoyc05>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/37324B79C41BD728482569840020A568/$file/volume5.pdf WA Inc Royal Commission Report, Vol.V] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.5 et seq}}
*The old [[Old Perth Technical School#Redevelopment progress|Perth Technical College]] site<ref name=wairoyc05/>{{rp|p.41 et seq}}

;Report Volume VI
*Allegations of bribery with respect to planning decisions in the City of Stirling for [[Observation City]]<ref name=wairoyc06>[http://www.slp.wa.gov.au/publications/publications.nsf/DocByAgency/A234356725D48E544825698400212B21/$file/volume6.pdf WA Inc Royal Commission Report, Vol.VI] 19 October 1992, at State Law Publisher, Government of WA</ref>{{rp|p.104 et seq}}
*Role of Mr [[Ray O'Connor]] in alleged bribery<ref name=wairoyc06/>{{rp|p.132–152}}
*Allegations arising from the trial of Robert Mark Smith and Robert Paul Martin, including those with respect to surveillance activities<ref name=wairoyc06/>{{rp|p.106 et seq}}
*The adequacy of certain police investigations<ref name=wairoyc06/>{{rp|p.106 et seq}}
*Political donations<ref name=wairoyc06/>{{rp|p.15 et seq}}

===Costs and outcomes===
The royal commission cost $30 million, including $12.5 million in witness costs. Of the latter, $3.6 million funded Burke's own legal fees ($1.71 million) and those of David Parker ($1.92 million).

Burke and his predecessor, the [[Liberal Party of Australia (Western Australian Division)|Liberal]] premier [[Ray O'Connor]] ultimately served prison sentences as a result of convictions which arose from findings of the commission. The premier immediately after Burke, [[Peter Dowding]], and public servant Len Brush were both found to have acted improperly.

The Western Australian Development Corporation's remit was reduced over time, and it was finally wound up in 1998.

==See also==
{{stack|{{portal|Western Australia|Politics}}}}
* [[List of Australian political controversies]]

==References==

===Notes===
(Page numbers cited in PDF documents are PDF pages, not necessarily corresponding to folio numbers printed on original pages.)

{{Reflist}}

===Further reading===
*{{cite book |title=A Matter of Conscience : Sir Ronald Wilson |last=Buti |first=Antonio |author-link=Tony Buti |year=2007 |publisher=UWA Press |location=Crawley, WA |isbn=978-0-9802964-1-9 }}
*{{cite book |title=The Bold Riders: Behind Australia's Corporate Collapses |last=Sykes |first=Trevor |author-link=Trevor Sykes |year=1994 |publisher=[[Allen & Unwin]] |location=St Leonards, NSW |isbn=1-86373-702-2}}
* Smark, P. and Skulley, M. ''State of Unholy Matrimony – When Govt Merged With Business'', ''[[Sydney Morning Herald]]'', 8 November 1988
* Taylor, Robert [http://nla.gov.au/nla.news-article122266073 Big Brother Jack] ''[[The Canberra Times]]'', 28 May 1989, at [[Trove]]

== External links ==
* [http://www.slp.wa.gov.au/publications/publications.nsf/inquiries+and+commissions?openpage W.A. Government Commissions of Inquiry] links to the WA Inc Royal Commission reports (PDFs)
* [http://www.ketupa.net/bond2.htm Bond, Bell and Holmes à Court: Chronology] at Ketupa.net, media industry reference
* [http://www.ketupa.net/bond.htm Alan Bond] at Ketupa.net
* [http://ketupa.net/bond1.htm Holmes a Court and Bell] at Ketupa.net

{{WA Inc}}
{{Business in Australia |state=autocollapse}}

{{DEFAULTSORT:Wa Inc}}
[[Category:Political scandals in Australia]]
[[Category:Royal commissions in Western Australia]]
[[Category:1980s in Western Australia]]
[[Category:1990s in Western Australia]]