WA Inc

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WA Inc is a shorthand, journalistic term which refers to the subject matter of the WA Inc royal commission and to a period in the mid to late 1980s in Western Australia when the then Government of Western Australia became involved in major business dealings with private businessmen including particularly Alan Bond and Laurie Connell. Both of these were later shown to be major contributors to the Australian Labor Party. The Premier of Western Australia at the time was Brian Burke.

As a result of 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 Laurie 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 1980's 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 $150M government guarantee. Connell had previously been the adviser to the 1983 government purchase of Northern Mining from Bond Corporation at 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.

Petrochemical plant.

Bell Group. Robert Holmes à Court's flagship company found themselves with a cash crisis and Bond Corporation and the government, through the State Government Superannuation Board (GESB) acquired major stakes in the business, allowing Holmes á Court to walk away with $350M.

Bond Corporation. see Bell Group.

The government had lent large sums of monies, 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. Nevertheless, a figure of losses to the State of $600M is generally stated.^[1]

[edit] The royal commission

On 19 November 1990, Carmen Lawrence, the then Labor Premier of Western Australia, announced her government's intention to have a royal commission "inquire into certain matters".

The commission of three was headed by Geoffrey Kennedy and joined by Sir Ronald Wilson and Peter Brinsden, with a brief to: "To inquire into and report" whether there'd been "corruption, illegal conduct, improper conduct, or bribery" by any person or corporation in the "affairs, investment decisions and business dealings of the Government of Western Australia or its agencies".

After approximately 21 months of enquiries and hearings the commission's report stated in part:

"The commission has found conduct and practices on the part of certain persons involved in government in the period 1983 to 1989 such as to place our government system at risk. Unfortunately, some of that conduct and some of those practices were peculiar to Western Australia"

"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 [merchant bank] in October 1987 was principally that of Mr Burke as premier. His 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, and from his desire to preserve [Labor's] standing [with] the business community from which it had secured much financial support"

"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. We have observed that the size of the donations was quite extraordinary. In his approaches the premier was direct to the point at times of being forceful. He nominated the amounts he expected. They were far in excess of amounts previously donated in campaign fund-raising in this state"

Premier Brian Burke and his predecessor and Liberal counterpart Ray O'Connor ultimately served jail 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 royal commission cost $30 million, including $12.5 million in witness costs. Of the latter, $3.6 million funded Burke's legal fees ($1.71 million) and those of his deputy premier, David Parker ($1.92 million).