I let you get away with it last time but I won’t let you get away with it again. I can tell you now. If you mention Bollag I’ll sue.
Alan Bond to Paul Barry, June 1993
In June 1993, I met Alan Bond outside the magistrates’ court in Perth where he was about to be charged on two counts of fraud and two of deception relating to Manet’s painting La Promenade. This had been sold for a profit of some $15 million that Bond had pocketed for his private company, despite the fact that all its lease payments had been met by the shareholders of Bond Corporation.
At the time, I was working on a program for the ABC’s Four Corners about Jurg Bollag and the huge amount of money and assets that Bond appeared to have secreted overseas.
We were all waiting in the crush in a hallway, with a gaggle of people from the press, while a housebreaker was being charged by the magistrate, so I took the opportunity to ask Bond whether he might like to be interviewed for our program. It was a gratifying moment in some ways, because he immediately became quite agitated, hopping from one foot to another and furiously trying to attract the attention of his son John and lawyer Andrew Fraser. ‘This is the man who wrote that book,’ he kept on saying to them, ‘this is the man who wrote that book.’ The book being The Rise and Fall of Alan Bond.
He then turned his attention to me to say: ‘I know what you’ve been saying about George Bollag, and I can tell you, it’s way off beam. It’s just totally wrong’.1
I suggested that the best way to convince the public that we were mistaken was to come on Four Corners, so I made the offer again. But Bond decided it was simpler to threaten me instead, as he had done before publication of the book. I can’t remember every word he said, but his parting shot is still etched in my brain: ‘I let you get away with it last time but I won’t let you get away with it again. I can tell you now. If you mention Bollag I’ll sue’.
The crew and I spent the next three weeks or so following the money trail across Britain and Europe until we ended up in the middle of Switzerland in the mediaeval town of Zug, whose cobbled streets, pretty churches and sparkling lake make it look like the cover of a chocolate box.
For reasons that go back into history, Zug’s laws are very different from the rest of Switzerland, and the local canton allows foreign companies to operate from here without paying any tax. As a result, it is a town with more companies than people, and is full of prosperous Swiss businessmen who have got rich by managing other people’s money. It is also, of course, the home of Jurg Bollag, who appeared to be doing just that for Bond.
In the three days we were there, we checked out Bollag’s tax records, searched the corporate registry and ate a few sandwiches at $20 a round, and then concentrated on trying to locate him. We phoned his home several times but got no reply, and went round there on three or four occasions with cameras at the ready, but always found the house empty. Finally, after too much hanging around, we decided to have one last try before going back to London. We didn’t know whether he was even in the country, and there was no guarantee that we would get him by coming back to Zug a week later. So we were beginning to worry about what we would say to the office back in Sydney. It was going to look like a very expensive trip if we failed to find him.
We drove rather gloomily to within a couple of kilometres of the house, and then stopped in a lay-by for me to don a radio mike and to check that the camera was working, because there’s no excuse for catching your quarry and failing to get the pictures, or missing the magic moment because you have no sound. Strangely enough, people like Bollag rarely hang around for ‘take two’.
We knew his house was down a cul-de-sac where it would be hard to turn and even harder to hide, but we were pretty sure he wouldn’t be there, so before we knew it, we had turned into his road and were looking over his fence from the big van that we had hired for the occasion. And there, to our immense surprise, sitting in a deck chair in the garden reading his newspaper, was the curly-haired gentleman who had last been seen bashing the Sydney Morning Herald’s photographer with his briefcase fifteen months earlier.
We just stopped. We were too shocked to do anything else. But in a couple of seconds we managed to drive a bit further down the road, park the van and regroup. We had spied an Alsatian in the garden that looked like it might cause problems, but there was a gate between Bollag and his back door, and provided he hadn’t seen us and bolted, we should be able to film something over the top of it. So, cameras running, we walked briskly round the corner of the house and leant over the picket fence to say hello.
I am sure Mr Bollag was even more taken aback than we were, because the law in Switzerland is very unkind to snooping journalists, and to foreign journalists in particular, but his surprise rapidly turned to anger, as the transcript of our brief conversation makes clear.
PB:
Excuse me, are you George Bollag?
JB:
Yes.
PB:
Paul Barry from Australian television. We’re hoping to talk to you about Alan Bond who is a friend of yours, I believe.
JB:
This is Sunday, please.
PB:
I realise it’s Sunday, would you …
JB:
Would you please leave?
PB:
We’d like to talk to you …
JB:
You’re on private property.
PB:
We’ll get further back. Can you please talk to us about Alan Bond?
JB:
I’m calling the police.
PB:
There are a number of assets, worth several million dollars, that …
JB:
Horse shit.
PB:
It’s not horse shit. What about Upp Hall, Mr Bollag?
JB:
Go away. I call the police now.
Some five minutes later the Swiss police arrived and took us back to the station, but the exchange by then had been caught on camera, and to our relief they did not confiscate the film. A couple of weeks later it was duly shown on the ABC’s Four Corners in a special hour-long program that detailed Bollag’s beneficence. This ‘horse shit’, as Bollag so graphically described it, was spread all over Australia’s airwaves, as was the conclusion that Bollag was not just Bond’s generous friend, but was in fact taking care of his millions.
Yet despite Alan Bond’s very specific threat to sue us if we mentioned Bollag, and despite the fact that we had accused him of using his Swiss friend to hide his money from creditors, neither Bond nor Bollag sued me or the ABC. And one has to ask why they did not. To which the only sensible answer is that we had hit upon the truth.
But why, if we could get away with saying that Bollag was just a front man for Bond, could the people chasing Bond’s assets not also win the game? Well, in a sense, that’s what this book is about. But part of the answer is that it’s easier to say things on television and defend them in an Australian court than it is to satisfy a judge in the UK or Switzerland, or a whole host of tax havens, that property and cash apparently owned by one person really belong to another and must be handed back.
The fact that someone lives in a house, rides a horse, drives a car and sails a boat without paying anyone else for the privilege would be enough to convince most people that those assets actually belong to that person, especially when there’s a pattern to it all, as there was with Bollag. But when it comes to proving the proposition beyond a shadow of doubt, it can be hard, especially when the documentary evidence and the people who can testify are safely stowed in tax havens around the world.
As the Bond case demonstrates, it is relatively easy to set up corporate structures that are almost impossible for investigators to crack. In-flight magazines are full of ads for outfits that will establish and run offshore companies for a few thousand dollars a year. And their brochures typically make it clear that these are designed to beat the taxman or to hide assets from creditors. They recognise the need for secrecy, which they call confidentiality. And they emphasise that one of their conditions of business is that they won’t disclose details of your transactions to anybody without your permission, unless their lawyers tell them they have a legal obligation to do so. The same secrecy pledge naturally applies to the local directors and lawyers they use in the various tax havens to act as your front men.
One of the biggest providers of these services, with a branch in Sydney, boasts that it has several hundred offshore companies ready to go within hours, in Belize, the British Virgin Islands, the Caymans, Niue (a coral island near Tonga with a population of 2,000 people), Anguilla (in the Caribbean) and about twenty-five other tax havens.
Different tax havens have different advantages, and some merely offer legitimate tax-saving routes into overseas investments. But if hiding your money is what you’re after, then the British Virgin Islands, the Turks and Caicos Islands, Panama, Mauritius and the Seychelles are hard to beat. In these places, you don’t have to tell the locals who really owns the company, so the authorities can’t give your secrets away; there’s no nonsense about filing accounts or needing local directors; and there are often secrecy laws to stop people talking if they do know your business. Tax havens like these are so tough to crack that most investigators don’t even bother to go knocking. And if they do, they normally come away with nominee owners and dummy directors, and no hint of who the company really belongs to.
The British Virgin Islands and other super-secret havens also offer the ultimately hideable company, which has what are known as ‘bearer shares’. With these, there is simply no record of who owns the company, because the shares belong to whoever is holding them at any particular time. These bearer shares can be passed round the table, from hand to hand, from wallet to wallet, safe to safe, and ownership passes from person to person as they move.
Often, companies in one tax haven are run from another, like Jersey or the Isle of Man, because these offshore financial centres have better banking and communications facilities, and use English as their business language. But serious asset-hiders also like to multiply the locations so that they have different pieces of the jigsaw in different havens around the world, which makes it more difficult for investigators to put the picture together. So while the company might be run from Jersey, for example, it could have its registered office in Liberia or Panama, its directors in the Isle of Man, its bank accounts in Liechtenstein and a power of attorney held by someone in Switzerland, who takes instructions from the real owner, who is somewhere entirely different.
The complexity of such arrangements is limited only by the trouble you wish to take to keep your money hidden, and the expense you are prepared to incur. But if you’re really desperate to avoid discovery, the idea is to construct as many different cells as possible, so that they act like bulkheads in a ship. The investigators then have to break through each one before they can move on to the next. And at each bulkhead you can fight a legal action to oppose the release of information.
Normally, documents alone won’t provide the proof one needs, and the only way to crack the puzzle is to crack the accountants or lawyers who are actually running the company. You will invariably need a court order to make them talk, but unless you can convince the authorities that you have evidence of a crime, you may well not be able to get one, especially in the smaller Caribbean or Pacific tax havens which rely on their reputation of being uncrackable to stay in business. And it’s pretty hard to get the sort of evidence you need if you can’t get into the tax haven in the first place. So it’s Catch 22.2
Recently, however, life has become a bit easier for investigators. New anti-money-laundering laws enacted throughout Europe in the 1990s have forced people setting up companies and opening bank accounts to disclose who really owns the assets, and this includes a requirement that they disclose the real beneficiaries of discretionary trusts. And since the mid-1980s several of the more respectable tax havens have become keener to cooperate with overseas investigators of crime.
In particular, Jersey has been keen to be seen as an offshore centre that won’t harbour criminals or foster fugitives. Since December 1992 it has even been prepared to assist foreign trustees in bankruptcy, such as Bob Ramsay, who are chasing assets on behalf of creditors. As a consequence, it was far easier to get information when Bond went bankrupt in 1992, than it had been in the early 1980s, when Bond’s offshore structures had been established.
In those days, Jersey was still perfectly safe from prying eyes, and Bond could not possibly have guessed that his accountants would be forced to open their files or spill the beans on his private affairs. And he had no way of knowing that when the Australian sleuths eventually came knocking, the Jersey courts would be only too happy to help.
In fact, Bond’s Jersey citadel was first invaded in August 1991 by a young investigator from Western Australia, Joseph Lieberfreund, who was looking for millions of dollars looted from Rothwells Bank by Laurie Connell. For the last half of that year and most of the next, this brilliant if bumptious accountant parked himself in London at the Department of Trade and Industry and worked full-time on the search for Laurie’s millions. And in the course of his search, he stumbled upon traces of Bond’s fortune, too.
The paper trail from Perth led him to an art dealer in the Cotswolds; an aristocratic bank called Coutt’s in London, where the doormen wear tailcoats; and to a firm of stockbrokers called TC Coombs, who had been raided by the UK Serious Fraud Office on suspicion of laundering large amounts of money for Australian businessmen.
Most importantly, it then pointed him to Jersey, to the St Helier offices of a firm of accountants called Touche Ross where Connell had based his offshore empire. There, with the help of the Attorney General, who was in the process of promulgating new fraud laws, and orders from the Royal Court of Jersey, Lieberfreund gained access to the secret files of a multitude of Panamanian, Liberian and British Virgin Islands companies that Connell had set up to hide his assets.3
This in turn led him to the St Helier branch of the Allied Irish Banks, where a number of these Connell companies kept their accounts. And what he found there must have almost knocked him sideways, for among the boxes of documents that the bank handed over were records of a company that acted as a postbox for a number of Touche Ross’s Australian clients, including Alan Bond and his inner circle of executives. Touche Ross were understandably furious but were unable to put the lid back on the box.
The banking documents suggested that up to $50 million had been channelled through two dozen companies run by Touche Ross for Connell, Bond and his head honchos between October 1988 and July 1990. Exactly who owned this money, in what proportion, and how it had been earned (if indeed that was the right word) were a mystery. And Touche Ross were certainly not prepared to throw any light on it, because the court order compelling them to talk referred only to Laurie Connell’s affairs.
But according to a secret report prepared for the Royal Commission into WA Inc, this much was sure: millions of dollars had been hidden in Jersey in offshore trust companies for Bond and his three most senior executives, Peter Beckwith, Peter Mitchell and Tony Oates. Typically, this money had been sent to the Channel Islands from Australia via banks in New York, Toronto or London to make the trail harder to follow.4
Jersey was therefore the next stop for the Four Corners team back in 1993, because the report not only suggested in general terms that Bond had money there, but also identified two companies we already suspected to have handled Bond’s or Bollag’s offshore millions: the horse buyer, Kirk Holdings (which we knew about from Susanne’s divorce proceedings) and the legal-bill payer, Juno Equities (which we had discovered in files in the Australian Federal Court). Both, of course, were run by Touche Ross.
Jersey is only a few kilometres off the coast of France, but in some ways it’s more British than Britain. In the summer at least, there are echoes of the archetypal dirty postcard, with fat women in thin summer dresses sprawled in deck chairs on the beach, and men in ties and knotted handkerchiefs. There’s enough flabby white flesh on show to make you glad that St Tropez thongs are not yet in fashion there. The hotels in the main town of St Helier are also typically English, with whorly coloured carpets, reproduction antique furniture, fake horse brasses, and lounges that smell of beer and rancid fat.
But Jersey is also a charming place, with narrow winding streets, old buildings, and the occasional spectacular castle. And there’s a glint about it all, which probably comes from the jewellery shops or the vast numbers of brass plates advertising the offices of accountants, lawyers, banks and offshore trust companies. Like Zug, the main game in St Helier is avoiding tax for the rich and secretive. And it’s what continues to make the residents wealthy.
Apart from getting these touristy pictures, however, it was not clear when we arrived what we would be able to film, except an ugly modern accountants’ office on a busy main road. But we decided it would be enlightening to phone a director of some of Bond’s offshore companies, who turned out to be a delightful man named Francis Plaistowe. I still haven’t the faintest idea what he looks like, since we never went round to his house, but over the phone he sounded like a jolly retired air-force officer, with sandy hair and a green tweed suit. In any case, he was more than happy to tell us what he knew, which was nothing, and to have a good chuckle about it all. Here was a man who acted as director to all sorts of companies, anxious to explain that he was merely a man of straw. It was a fascinating insight into the system.
Yes, it’s no good talking to me because I’m only a nominee director, that’s all … I mean, I’m just, you know, I just go in and sign papers … I mean, I’m on lots of boards for Touche Ross … All that happens as the nominee directors, you can imagine … I mean when you’ve got a hundred of them or a couple of hundred of them or whatever, you just rely on Touche Ross … so if anybody is going to end up in jail, it’s Touche Ross not me. (laughs)5
Mr Plaistowe, it turned out, received a fee of £50 a company for the documents he signed, and never had the inconvenience of going to directors’ meetings or anything like that. Typically, the papers would be sent en masse to his house, or he might go into Touche Ross’s office to sign a heap of them. He was kind enough, anyway, to tell us that the man at Touche Ross who really looked after these companies was a partner called John Hatton-Edge.
Mr Hatton-Edge, however, was not keen to discuss anything to do with Bond, so we resolved to pay him a visit. Parking ourselves outside his luxury block of apartments early one morning, we waited to catch him going to the office. Sadly, he was still in no mood to talk. Viewers of Four Corners soon afterwards were treated to a shot of a plump, bald man peering crossly through the windscreen of a new black Porsche, which roared off into the dawn before we had had time to say hello. Further attempts to get him to talk about the companies that he ran for Bond resulted in him putting the phone down.
But if we didn’t have the power to get Hatton-Edge to talk, Bond’s trustee in bankruptcy Bob Ramsay certainly did, provided he could get the Royal Court of Jersey to issue an order compelling him to cooperate. And sure enough, by late 1993, he was already trying to do exactly that.