9News: Westpac Scandal

Peter Overton, Nine News Sydney: Westpac’s money laundering crisis has claimed three scalps with its top executives standing down over allegations the bank failed to monitor $11 billion of criminal transactions.

And tonight’s suggestion – the banks was made aware of the system failure months ago.

Ross Greenwood: For Westpac, Australia’s oldest bank, turned from steady as she goes to men over board in less than two days.

The CEO, Brian Hartzer – gone.

The head of risk and compliance committee, Ewen Crouch – gone.

Chairman Lindsay Maxsted, for five years Australia’s most respected director – gone early next year

Lindsay Maxsted, outgoing Westpac Chairman: To not make the change could be damaging to the bank.

Greenwood: All gone in the wake of allegation by anti-money laundering agency AUSTRAC, that Westpac failed to report 23 million potentially suspicious transactions, and this failure aided paedophiles and child exploitation.

 Treasurer Josh Frydenberg: These breaches are of the most serious nature and there needed to be accountability.

Shadow Treasurer Jim Chalmers: The behaviour at Westpac under Brian Hartzer’s leadership was nothing short of disgraceful.

Guy DeBelle, RBA Deputy Governor: The allegations are incredibly disturbing and serious

Greenwood: Westpac ‘s panic is obvious – new interim boss is Peter King, he’s back from the dead. He resigned as Chief Financial officer just a month ago.

Peter King, Acting CEO Westpac: I’ll be here as long as the bank needs me, so we do not have an end date.

Greenwood: Rubbing salt into the wound, Brian Hartzer will be paid $2.7 million as he leaves – that’s on top of around $33 million he earnt in the past six years.

 On Sunday though, Westpac’s directors thought they could guts it out.

Brian Hartzer, outgoing Westpac CEO: I am absolutely committed to getting to the bottom of this

Greenwood: Shareholders had none of it. Vas Kolesnikoff tells big super funds how to vote

Vas Kolesnikoff, ISS Governance: What is required is for boards and directors and management to be accountable for their actions.

Greenwood: Future Westpac bosses will now deal with the damning allegations, and the nagging question…when did Westpac really know about AUSTRAC’s concerns?

First, an outright denial about knowledge of the child exploitation transactions.

Maxsted: We had no knowledge in advance of last Friday week.

Greenwood: But later, something odd.

Maxsted: AUSTRAC met with the whole board of Westpac in March this year.

Greenwood: So this is where Westpac claims it was blindsided by Westpac but what I can tell you is there was ongoing dialogue between Westpac and AUSTRAC over a very long period of time, over its systems.

Now, whether it knew specifically about that child exploitation is one thing, but it certainly knew it had fundamental problems inside the bank and that’s why the resignations had to come and why more will follow Pete.

Overton: Ross, thank you.  

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