As Rivkin walked out of the ABC studios in Sydney on 28 April 2003, he believed he had every reason to feel satisfied with his latest performance. The interview he had just taped with Andrew Denton would make sensational viewing when it went to air a week later. Denton’s clever technique had elicited all the ingredients that stamped Rivkin as great talent for television. Rivkin was witty, engaging, candid and, when talking about his personal life, absolutely fearless in pressing the button titled, ‘Way Too Much Detail’. What could you say to a man who confessed, as Rivkin did to Denton, that at seventeen his father took him to a nudist camp where he had won the New South Wales nudist table tennis championship? Or that he had been runner-up in the New South Wales nudist badminton titles? Mercifully Denton stopped him before he mentioned anything about yachting.
‘I don’t lie, I was taught as a child not to lie,’ Rivkin said. ‘I get into trouble by telling the truth. There you go. I know it’s hard to believe.’
The easy repartee between Denton and Rivkin was nothing like the less pleasant exchanges he had had four months before on the opposite side of the world, at the Zurich District Attorney’s office. Rivkin’s appearance there had been only the latest in a string of cameos by Australian clients of Bank Leumi. The whole thing had become quite a saga. The first of the reluctant interviewees was Trevor Kennedy, and that was really a case of being in the wrong place at the wrong time.
It began in June 2001, when Trevor Kennedy slipped out of Australia, while the aftershocks of the HIH and One.Tel collapses were still reverberating, and headed for Switzerland. Many Bank Leumi clients were complaining about discrepancies in their accounts. Being an agreeable fellow, Kennedy went to the bank to see a Mr Wolman, to share his concerns over some suspicious transactions in his own account, that suggested he too was one of Imfeld’s victims. It was simply bad luck that Christopher Harris, a consultant from PriceWaterhouseCoopers seconded to Leumi to unravel the Imfeld accounts, was nearby. And it was really unfortunate that at this point Mr Wolman asked the consultant to join the meeting. Kennedy’s name rang a bell for Harris. He had just been looking at a peculiar transaction on 7 July 1997, where Imfeld had transferred US$500 000 from a Leumi account to an account at another Zurich bank, Maerki Baumann, in the name of Kennedy. Ordinarily there would be little hope of tracking down the mysterious Mr Kennedy. But now, quite by chance, a man by that name was sitting in their office. A man who, it turned out, said he once had an account at Maerki Baumann. So if it was all the same to Mr Kennedy, could they please have their US$500 000 back?
‘At this point Mr. Wolman virtually accused me of trying to steal the bank’s money,’ Kennedy later wrote.
It was a truly appalling prospect. Kennedy had gone to the bank to ask for money, only to find the tables turned and the bank demanding money back from him. And until the issue was resolved, Bank Leumi had frozen his Leumi account. Not just that, now the Zurich District Attorney’s office wanted a word with him. Which was how Trevor Kennedy found himself, on 11 March 2002, sitting down for a formal interrogation with Zurich Assistant District Attorney, Bruno Stochli.
The problem was, the US$500 000 that Imfeld transferred to Kennedy’s Maerki Baumann account in 1997 had been paid out of an unrelated client account at Bank Leumi that wasn’t supposed to exist. The client had ordered the account closed in 1990, but it had remained open as some sort of secret slush fund operated by Imfeld. Why was it paying money to Trevor Kennedy? Kennedy told the DA’s office that he couldn’t remember where the money was from, but was sure it was his. He made some calls overnight to Australia to ask some of his friends—Rene Rivkin, Graham Richardson and ‘some of the other associates’, but they didn’t have any clues either. It was pretty embarrassing, he said, but the details had just slipped from his mind.
He left Zurich with the matter unresolved and went home where, ever the journalist, he began writing letters. ‘I deliberately keep no records of my affairs in Switzerland,’ he wrote to the DA via his lawyer. ‘I visit the country only on an annual basis. I am very circumspect about using the telephone between Switzerland and Australia. I have transferred significant funds between the banks there, and have changed banks from time to time.’
After all, it wasn’t really so unusual. It wasn’t as if Trevor Kennedy was the only Australian investor involved in this sort of thing. This sort of thing being transfers of large sums of money and not remembering what it was for.
‘I engaged in many transactions of this magnitude, mainly in Australia, with a group of my associates,’ he wrote. ‘It was not unusual for us to lend each other money or to have part or all of the loan and/or interest paid offshore . . . For obvious reasons I did not keep memoranda or records relating to my Swiss affairs . . . I kept absolutely no records.’
The cruellest thing of all, it seemed to Kennedy as he wrote on 26 March 2002, was that the fellow from the DA’s office who had interviewed him (he thought his name was Stochli) had seemed to be sceptical about Kennedy’s explanation.
‘It is the truth,’ Kennedy wrote indignantly. ‘Furthermore, he suggested that he might take this matter up with the Australian authorities. This would be catastrophic for me and totally unjust.’ He also wrote, more in sorrow than anger: ‘My only crime has been to have no recollection of a five-year-old event and to have put my faith and trust in the integrity and efficiency of the Swiss banking System.’
Kennedy was in the running for the top job at the ABC at the time, so he had reason to be sensitive about a little bad Swiss press. It turned out that Kennedy was not the only disgruntled Australian making a pilgrimage to Zurich. Brent Potts dropped by the DA’s office for a chat. The DA would have liked to have a natter with Graham Richardson, but Richo kindly informed them with the easy grace of an old politician that, while he was definitely looking forward immensely to chewing the fat with the DA, his appointment book was chockful for the next 7000 years. Perhaps they could pencil something in for any time after that. That, at least, was the gist of Richardson’s response.
But on 10 December 2002, Kennedy’s good friend Rene Rivkin fronted for a show-and-tell session in Zurich. Initially Rivkin had made no complaint about his Leumi account. Why would he? Unlike almost every other Leumi client account, which was showing losses, Rivkin had ended up more than US$2 million ahead from Imfeld’s currency trading and the Manchester United payment. By 2002, Leumi had discovered these payments and was demanding repayment. At this point Rivkin also decided to file a complaint. And so he ended up being interrogated by the DA heading the Imfeld investigation, Dr Nathan Landshut. The interview lasted all day in the DA’s cramped office in the grubby Weststrasse, Zurich’s noisiest and most polluted street. Imfeld was present, as was Rivkin’s lawyer, Benno Hafner. The session began at 9 a.m. with Landshut cautioning Rivkin that he was a suspect (Auskunftsperson) in the investigation. Landshut went on to express regret that Graham Richardson had not been able to attend. Then, for the next nine and a half hours, Landshut explored Rivkin’s banking history with Leumi and Imfeld. It was the only time in his life that Rivkin was confronted with the evidence of his secret life—how he began banking with Leumi more than two decades before, his strained relationship with his father and his money troubles. Rivkin in the first instance recalled little of what Landshut raised with him, or denied it outright, until the DA produced the documentation.
Midway through the morning session, Hafner gave a long explanation of how Laira was set up as a Scottish partnership with proceeds from the sale of Offset Alpine shares, after a little trouble with the Australian authorities. At the end of this Landshut turned to Rivkin and asked him if this was his understanding of events as well. It was at this point, Rivkin suddenly became more talkative and made the admission which would prove so damaging:
The shares of Offset Alpine, which this was originally all about, were for the most part, let’s say 81 per cent mine, and about 7 per cent Richardson’s. Twelve per cent were held by Kennedy. The numbers don’t square exactly. Where I see the amount for $1.4 million, I get the impression that this was Richardson’s share, because mine was much higher.
His admission came out of the blue and without pressure from Landshut. Rivkin shopped his friends so abruptly, and in such contrast to his earlier minimal responses, that it had the air of being planned. He may have believed that Imfeld was going to reveal it anyway, so moved to forestall him. He may have wanted to divert Landshut’s line of questioning from other areas where it was more sensitive for him. But perhaps most likely, while he remained as rational as he ever had been, with his deteriorating bipolar condition he was losing the ability to keep secrets.
Landshut didn’t pursue the Offset revelation. His focus was Imfeld, who had been present throughout the questioning, along with Benno Hafner. Rivkin would have had no fears that his admission here would ever surface in Australia. Swiss banking secrecy is legendary. Unfortunately for Rivkin, Swiss criminal investigations are not covered by the same strict laws. But there were no immediate repercussions and, in April 2003, Zurich seemed a world away while Rivkin faced a far more immediate threat, as his insider trading trial over the Qantas share trades two years before began.
Months later, when the insider case went to appeal, Rivkin’s legal team revealed the suspicions they had had during the April trial that their client had gone mad. Rivkin had given not one but two interviews to Andrew Denton, which proved disastrous. Rivkin had behaved badly in court, his advisors believed. There had been the disastrous episode of the nasal inhaler . . .
When did solicitor Mark O’Brien first twig that all might not be well in the very different world and mind of his client, Rene Rivkin? Call it a sinus moment.
There was Rivkin, head back, nasal inhaler at the ready, holding nothing back as he gave his nostrils a solid workout. Courtrooms are not renowned for their acoustics, but this was a clarion call that floated right across the hall of justice and into the jury box. At least one gathers as much from O’Brien’s later evidence to the NSW Court of Appeal about his client’s mental state.
O’Brien, a man whom nature has not gifted with a wide range of expressions, had at times during this case seemed to the casual observer not to be completely at ease with the client–lawyer relationship. O’Brien’s evidence, quoted in the judgment, spelt out just how strained the relationship was. He said bluntly that he had concerns about Rivkin’s mental condition during the trial and that, while on the stand, some of Rivkin’s answers had been ‘very foolish’.
The trouble began early, when Rivkin’s counsel, Bruce McClintock SC, asked him for his occupation. O’Brien’s view was that Rivkin must have been showing the effect of his brain tumour when he answered: ‘Well, primarily it’s—let’s rephrase that. Most of my money is made in matters primarily relating to the stock market.’
Then there was Rivkin’s decision to read a dictionary during the trial, and to laugh during the cross-examination of witnesses when it wasn’t clear to O’Brien what the joke was. But this wild behaviour paled when compared to the incident that began when Rivkin asked his personal assistant to pass the nasal inhaler. Unhappily, McClintock had just begun his address to the jury. And there was Rivkin, his client, imitating a vacuum cleaner behind him. Not one of the whisper-quiet ones, either.
In the universe of legal sins, there are few more heinous than upstaging your own barrister. Some QCs favour bringing back capital punishment for just such lapses.
‘Don’t you ever do that again,’ McClintock told Rivkin afterwards. ‘I was trying to make an important point to the jury for you and they were looking at you, not listening to me.’
At this point Rivkin made the only answer a reasonable person could: ‘What, you want me to suffocate?’
O’Brien was not convinced. As he told the appeal judges, ‘That seems to me to miss counsel’s point.’
Rivkin expected to be cleared later that week of the minor embarrassment of the insider trading charge. So there was a shrewd commercial logic in Rivkin’s decision to do the first interview with Denton. When the interview ran the following Monday, it would be a celebration of Prometheus Unbound, a signal that it was business as usual at Rene Rivkin Inc. Rivkin had a gift for publicity stunts whenever his affairs ended up in court. But he had moved too soon.
Rivkin was shocked on 30 April when the jury returned a guilty verdict. He claimed he had been cut down because he was a tall poppy and he directed an angry tirade at ASIC in the Rivkin Report. Rivkin’s private network immediately began a public appeal for support, led by a subscriber to the Report who turned out to be George Freris’s sister. The day after his trial ended Rivkin began stripping money out of his public company, Rivkin Financial Services, with a share buyback. Publicly it seemed that Rivkin’s mania was drifting out of control, exacerbated by an as-yet-undiagnosed benign brain tumour. It would later be claimed that his IQ had fallen to around 50 at this time. However, there was nothing slow about the deals he continued to make.
Over two weeks he channelled up to $2.7 million to himself and close associates. At his sentencing hearing, friends like Ray Martin, John Boyd, Richardson and Kennedy rallied around as character witnesses. Kennedy testified that Rivkin’s ‘respect for both law and moral code is flawless’. The hearing ended with Justice Whealy sentencing Rivkin to nine months of weekend detention.
Rivkin now seemed clearly unbalanced. He gave another interview to Denton and a radio interview to Richardson, both of which would be disastrous for the prospects of his appeal. He was the centre of intense media coverage as he began the first weekend of detention at Silverwater prison complex, and when he collapsed the following day. Days later he was operated on to remove the brain tumour.
The bell for one of the last chapters in Rivkin’s fall from grace tolled on 10 September, when the High Court handed down its decision in the defamation case against the Australian Financial Review and the Sydney Morning Herald. The year before, the Federal Court of Appeal had ruled that the jury verdict in 2001 was unreasonable, and ordered a retrial. The High Court overruled much of this judgment and reduced the retrial to four issues. These included two counts against the AFR, that my story in 1998 had suggested that the Offset Alpine affair had diminished his reputation as a ‘sagacious’ stockbroker; and that ASIC had suspected him of being involved in shady business.
The press reports of the High Court decision were read in Switzerland by Shraga Elam, the soft-spoken Israeli journalist in Zurich who first broke the Imfeld scandal in 2001. Among a string of international scoops, in 1998 Elam had revealed that MI6 and Mossad had helped smuggle into Iran ingredients and know-how that could be used to make chemical weapons of mass destruction. In January 1999, after he had interviewed one of two MI6 agents involved in the operation, Shraga was detained at Heathrow airport by twelve customs officers, questioned for hours and had his laptop and documents confiscated. Elam has written extensively on links between Nazi Germany and Switzerland and in 2002 published a controversial book, Hitler’s Forgers, which revealed how the Israeli government and Mossad had protected an important Nazi agent. Shraga is a man of considerable personal convictions, who after fighting in three wars as an Israeli now works as a peace activist, promoting reconciliation between Jews and Palestinians. It is work which puts him constantly under scrutiny. With many critics waiting to pull him up for any error, his research style is cautious and methodical. In early 2003, he focused once again on the Leumi embezzlement investigation, and by midyear he had carefully won the confidence of a number of sources. They provided him with a treasure trove of documents unearthed in the course of the Swiss investigation. These included bank account details and witness statements for several Australian clients of Leumi, including Rivkin and Kennedy. By the time Shraga read reports of the 10 September High Court ruling on the Internet, he had spent several months confirming the authenticity of the documents he held. A friend of his, Swiss journalist Gian Trepp, knew me and recommended that Shraga make contact. Shraga emailed me on Saturday morning, 13 September, and I replied an hour later. In the days that followed, AFR journalists Andrew Main, Colleen Ryan and Rosemary Graffagnini joined the investigation. Rivkin’s defamation case had provided the link that would lead to his unmasking.
Trevor Kennedy picked up the Financial Review, on 30 October 2003, to see that his old paper had put his letters to the Zurich District Attorney on the front page. The Financial Review had obtained from Elam copies of signed transcripts of Rivkin’s and Kennedy’s interviews. Actually, Kennedy’s embarrassing correspondence with the Zurich DA was the minor, colour story. The lead story was that the Offset Alpine mystery was solved. Rivkin, Richardson and Kennedy—the stockbroker, the political power-broker and the media executive—were the mystery figures behind Offset Alpine.
A month later, Kennedy told ASIC investigators that he remembered almost nothing of the hours that followed:
This was an absolutely chaotic day and the—from the moment that I first learnt about this thing to the next two or three days are just a blur in my mind. There is recollections of weeping wives, of dozens of people ringing up, of all of that sort of stuff, and I think it’s totally unreasonable to expect me to remember the details of conversations that occurred on that day.
ASIC put the events together as best it could. ‘Mr Kennedy reads the Financial Review and sees the activity attributed to Messrs Rivkin and Richardson and in part what was attributed to Mr Kennedy regarding an interest in Offset Alpine,’ ASIC’s counsel, Geoff Lindsay SC, later told the Federal Court, with marvellous restraint. ‘Mr Kennedy is surprised to be named.’
It was a complete disaster, Kennedy told the ASIC investigators. The newspaper report was the first he had heard that Rivkin had named him in Zurich as one of the Offset Alpine shareholders. Photographers and reporters were already arriving to stake out Kennedy’s home, along with the Rivkin and Richardson houses. Kennedy had not got where he was by being slow off the mark, and now he acted with decisiveness. He slipped past the press cordon around his house at Kirribilli and smuggled himself in to see Rivkin at Double Bay.
‘Mr Kennedy goes to the home of Mr Rivkin and endeavours to ascertain if he said those things, and if so, why,’ Lindsay said. ‘He gets no satisfactory response.’
By this time, Richardson had shown up at Rivkin’s house as well. Eight years after he retired from parliament, Richardson’s legendary power as a backroom fixer for the NSW Right was diminished, but the former Minister for Kneecaps remained a major lobbyist for Kerry Packer’s media group and other clients. Politically, Richardson knew where the bodies were buried. But he wasn’t getting much joy out of Rivkin. The three of them rang Benno Hafner, the Swiss lawyer each of them used in Zurich. How had the press got access to these documents? Hafner too had been taken by surprise and could say little on the telephone.
There they were then—Rivkin, Kennedy and Richardson, three of the biggest and toughest corporate and political players of the 1990s—reduced in the confusion to a scene reminiscent of the Three Stooges: the Man Who Talked Too Much, the Man Who Wrote Too Much, and the Man Who Knew Too Much. Any moment now and they would break into an Abbott and Costello routine: Who’s on first; What’s on second; Hafner’s in Zurich.
Benno Hafner. Now there was a man who would have all the answers. Kennedy went home, but the phone calls to Rivkin continued. ‘He phoned Rivkin about it, on more than one occasion, without satisfaction,’ Justice Gyles would later note in the Federal Court. That was when Kennedy decided to go to Zurich to see Hafner. There wasn’t much choice. Someone had to go, and Rene wasn’t a starter. Rivkin had pleaded a dazzling variety of medical afflictions in the past five months to delay carrying out his weekend detention sentence. The justice system had managed to live with regular newspaper photographs of Rivkin dining out in expensive restaurants. But even the malleable minds at the Department of Correction would probably have some difficulty with their star prisoner skipping out on detention for a jaunt in the Alps. Richardson, meanwhile, ran the risk in Switzerland of being nabbed for that little heart to heart the Zurich DA had been so tiresomely insistent about. That left Kennedy to go to see their old friend Benno Hafner. As the man who kept their records and looked after their business, Benno could surely clear things up.
If Rivkin’s testimony in Zurich were true, both Rivkin and Kennedy had breached Section 135 of the Crimes Act with false testimony in their evidence to the ASC in 1995. It was an offence that carried a maximum gaol term of five years. Both men knew that it was only a matter of time before the Australian Securities and Investments Commission examined them again about the Financial Review story. That wasn’t hard to work out Justice Gyles would later comment in the Federal Court. ‘[Kennedy] might have felt a certain urgency on the need to protect himself.’
Kennedy flew out late on the Friday. On his way to Zurich he would go via London, where he thought he would put up at the Ritz.