More immigration blunders by the Gillard government

Leftist governments everywhere seem to be soft on illegal immigration -- with many unfortunate results

JULIA Gillard has ordered an investigation into how an al-Qa'ida terrorist was housed for months in low-security immigration detention, as Labor seeks to fend off opposition attacks suggesting the flood of boat arrivals is jeopardising national security.

The Prime Minister caved in yesterday after days of having resisted opposition demands for an inquiry into the case of convicted Egyptian jihadist Maksoud Abdel Latif, who Tony Abbott said was housed behind a "pool fence" in the Adelaide Hills.

Ms Gillard said the Inspector-General of Intelligence and Security would examine the management by government agencies "of persons seeking asylum who present complex security issues" - particularly the case of Latif.

In question time, the Opposition Leader moved to link illegal boat arrivals to security concerns, declaring that 42,000 people had arrived on 700 illegal boats since Labor took power and more than 10,000 had been released into the community without comprehensive ASIO checks.

Senate estimates hearings have been told that last month security agencies faced a backlog of more than 19,000 asylum-seekers yet to be processed.

Australian authorities confirmed yesterday the arrival on Tuesday of two more asylum-seeker boats.

One was intercepted north of Christmas Island, carrying 54 passengers and three crew. A second vessel was detected northwest of Darwin, with 79 people on board and two crew.

Mr Abbott asked Ms Gillard in parliament: "Given that a convicted jihadist terrorist was held at a family facility in the Adelaide Hills for almost a year, through what officials called a clerical error, will the Prime Minister now concede that Labor's policies have made Australia less safe than it was under the former government?"

Ms Gillard said Mr Abbott's question showed the divide between a government that was building and investing for the future and an opposition that was "trading in fear".

The investigation by the nation's top-ranking security watchdog will probe how key agencies such as the Immigration Department and ASIO are conducting security assessments of asylum-seekers.

The government faced immediate demands for a wider investigation.

It was forced to vote against a motion by independent Andrew Wilkie for a parliamentary committee inquiry into the case.

Opposition immigration spokesman Scott Morrison said the inquiry announced by the Prime Minister was not broad enough because it did not address how the Immigration Department allowed the convicted terrorist to "stay behind a pool fence" under the watch of two ministers.

The row was sparked by revelations that Latif, who is accused of being a member of terror group Egyptian Islamic Jihad, had been housed in the low-security Inverbrackie detention facility in the Adelaide Hills for almost a year before being transferred to the Villawood detention centre.

Neil Fergus, chief executive of security company Intelligent Risk and a key adviser to the federal government on security at the Sydney Olympics, said the episode reflected the great difficulty for security agencies of prioritising a mass of cases.

Mr Fergus said one of Osama bin Laden's greatest coups was Egyptian Islamic Jihad, which for decades had been one of the most ruthless and bloodthirsty terrorist groups around. It produced al-Qa'ida current leader, Ayman al-Zawahiri.

He said al-Qa'ida had suffered severe operational reversals but there should be no presumption that the risk had gone away. "When a beast is cornered, it can often be more dangerous," Mr Fergus said. "They are dispersing resources. They are, as you can see from the London attack, telling people over the internet to self-initiate attacks."

He said that did not necessarily relate directly to the Egyptian man now in detention custody.

Immigration Minister Brendan O'Connor revealed before question time yesterday that the Immigration Department sent a submission to his predecessor, Chris Bowen, on September 28 last year on the Latif matter.

The submission was not signed, indicating Mr Bowen did not see the document. The Australian understands it dealt in general terms with how the visa application should be handed in relation to emerging security concerns.

Mr O'Connor said the submission was not provided to him when he was appointed Immigration Minister. No matters were raised with him or his office until April 17. This is when it briefed him on the asylum-seeker's movement from the low-security Inverbrackie to Villawood detention facility. The man had remained in detention since arriving in Australia.

Mr Morrison said the inquiry announced was not broad enough because it did not address how the Immigration Department allowed a convicted terrorist to remain in low-security detention under the watch of two ministers.

He called for a full independent inquiry or for the joint standing committee on intelligence and security to investigate, as pushed for by Mr Wilkie in the parliament.

He said Australia did not owe protection to the asylum-seeker under the refugee convention because he almost certainly posed a threat to national security.

Opposition home affairs spokesman Michael Keenan said the inquiry announced by the Prime Minister also did not look at the role of the Australian Federal Police. The apparent lack of co-operation between Australia's key security agencies was a key opposition concern.

It is understood the Coalition is also considering reviewing the interoperability of national security agencies should it win the September election.

Opposition legal affairs spokesman George Brandis suggested Australia would be unable to return Latif to Egypt because it was a country with the death penalty.

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How ASIC's blundering attempt to block one website took down 250,000

They are arrogant to be blocking any sites.  Nobody voted for  this.  And arrogance is a good predictor of blundering

Australia's corporate watchdog has admitted to inadvertently blocking access to about 250,000 innocuous websites in addition to the 1200 it had already accidentally censored.

ASIC made the concession in a statement at a senate estimates hearing on Tuesday night, after it caused controversy by interpreting a 15-year-old law in the Telecommunications Act as giving it the ability to block websites.

The largest number of sites censored when attempting to block one particular site ASIC believed was defrauding Australians was 250,000. Of these, ASIC said about 1000, or 0.4 per cent, were active sites. It said the 249,000 other sites hosted "no substantive content" or offered their domain name up for sale, rather than hosting a fully-fledged active site.

ASIC asked internet service providers (ISPs) to block sites it believed were defrauding Australians by IP address (such as 203.56.34.11) instead of domain name (such as sitedefraudingaustralians.com). This meant thousands of other sites were blocked in the process, as many sites are often hosted on one shared IP address.

ASIC told senate estimates in its opening statement that it was now examining how it could ensure only a site's specific domain name was blocked and ways it could alert the public to a site being blocked via a pop up page. It was also examining ways such a page could indicate why access was blocked and to whom queries could be made to dispute a block.

ASIC deputy chairman Peter Kell told estimates the watchdog had used section 313 of the Telecommunications Act on 10 occasions in the past year to request a number of Australian ISPs to block sites. ASIC sent the notices to four or five ISPs on each occasion.

On all 10 occasions it requested websites be blocked by IP address instead of by domain name.

In another already reported case, about 1200 sites were blocked by mistake. On the other eight occasions ASIC said "only the targeted criminal site, or the targeted site and a very small number of other sites" were affected.

So far ASIC, the Australian Federal Police and a yet-to-be-revealed national security agency under the Attorney-General's remit have used section 313 to block sites at a federal level. State and territory law enforcement authorities are also able to use section 313 but it is not yet known if they have done so as there is no one agency that has oversight.

ASIC has vowed to report annually on its blocking of websites, the only authority to do so.

Use of section 313 to block websites was only uncovered last month after the webmasters of the Melbourne Free University site couldn't figure out why it was no longer accessible. After making a number of inquiries to their ISP, the webmasters were told that the Australian government had blocked access to the site. The ISP wouldn't provide any more detail.

It wasn't until after the media and Greens Senator Scott Ludlam got involved that the Department of Broadband, Communications and the Digital Economy revealed to tech publication Delimiter that ASIC was behind the censoring.

Soon after the revelation, the department convened a meeting on May 22 with federal government departments and agencies, including ASIO, to discuss use of section 313.

Communications Minister Senator Conroy has since expressed his support of there being more transparency around the way section 313 is used by law enforcers.

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Qld passes stricter laws for unions

QUEENSLAND unions must now conduct membership ballots to get majority support before spending large amounts on political campaigns.

Officials will also have to declare personal interests and gifts under the new rules, which apply to industrial organisations.

Thirty-four trade unions and 32 employer associations will be affected by the amendments.

Workers will now have the right to choose whether they want to join an association, Queensland Attorney-General Jarrod Bleijie said in a statement on Thursday.

The government has also changed the definition of "worker" in relation to compensation claims at the request of WorkCover Queensland.

"This is about transparency, accountability and restoring public faith in these organisations," Mr Bleijie said.

Unions strongly opposed the changes when they were proposed, arguing they were designed to weaken workers' groups.

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Disappointment for Greenies: Gas seepage could be natural in Qld

QUEENSLAND'S GasFields Commission says historial studies indicate methane gas seepage may have occured before large scale coal seam gas mining began.

The state's CSG arbiter, the GasFields Commission, says a range of soil surveys taken between the 1980s and 1990s found low levels of naturally occurring methane gas.

Commissioner Steven Raine says the historical studies of gas seepages in many coal basins undertaken by the state government, industry and research agencies show they occur naturally.

"The focus of our project was specifically to try and see what general historical data and information was available," he said in a statement.

"These soil gas surveys demonstrate that landscape gas seeps did exist naturally prior to the recent expansion of the onshore gas industry in Queensland."

Prof Raine noted that while initial evidence suggested that gas seepage could be natural, studies of seepages is some areas were yet to be completed.

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Serious rot at the Commonwealth bank

And the regulator didn't want to know

When a group of Commonwealth Bank employees agreed to meet in October 2008, they settled on the Buena Vista Hotel in Sydney's Mosman, a place they could huddle incognito to hatch a plan that would change their lives forever.

By the end of the lunch, the men had agreed to become whistleblowers, using the pseudonym the "ferrets" to tip off the corporate regulator about the goings-on at CBA's financial planning arm, specifically one of the bank's top financial planners, Don Nguyen, who had worked for the bank since 1999.

Five years on, one of the whistleblowers is dead after passing away in his sleep at 35. The second, the ringleader, has agreed to go public to warn of the perils of being a whistleblower after leaving the bank earlier this year. The others still work in the industry but want to remain anonymous to avoid the backlash of being a "dobber".

The men discussed at great length the risks at that fateful lunch, but as each of them considered that up to 1300 clients - most of them retired, seriously ill or unemployed - and $300 million in client funds could be torched by Nguyen, they decided to tip the bucket on the bank's star planner. But doing that also meant exposing the culture inside the planning arm of the most venerable and trusted financial institution in the country.


The clincher had been the decision to promote the fast talking Nguyen in October 2008 to senior planner, a month after he had been suspended over allegations of charging improper fees and paying cash backhanders to branch staff to divert client referrals.

Instead of being terminated and his clients compensated, they were fobbed off and their depleted funds blamed on the global financial crisis, which was now imperilling the international economy.

As Nguyen's clients poured through the doors in a panic about their loss of income, some on walking frames, others with heart conditions, emphysema and dementia, the whistleblowers hit the go button on a four-page fax to the Australian Securities and Investments Commission on October 30.

It was a big day for Jeff Morris and his whistleblowing mates. They sat in their offices waiting for the axe to fall.

The fax, obtained by Fairfax Media, contained a detailed history of Nguyen's activities and revealed an "extraordinary commonality in the risk profiles of the clients, whereby all, including the retired, the disabled and the unemployed, opted for aggressive high-growth [investment] strategies".

Most importantly, it warned that the files were being "cleaned up". The whistleblowers detailed three locations where the files could be found and provided a list of the major players involved inside Commonwealth Financial Planning Ltd (CFP). "The cost of dealing fairly and honestly with the losses suffered by Don Nguyen's clients certainly runs into the tens of millions - enough to cost all the managers involved their jobs," the fax said.

One elderly couple, the Blanchs, saw their retirement savings depleted to a point where they were forced to live on government assistance. They had invested $260,000 with Nguyen in March 2007 in the belief he had put them in eight moderate-risk investments. They soon found out he had placed them in high-risk, high-fee generating products, wiping out more than 65 per cent of their savings.

Their daughter, Merilyn Swan, says the stress took years off her parents' lives. "One day I went to visit them and saw my dad sitting with his head in his hands and he said: 'I can't believe what has happened'. He was humiliated, he suffered depression, had a stent put in his heart and had psoriasis due to stress," she said.

Mervyn Blanch, who was 81, had worked all his life, had no debt and wanted to protect his wife's finances as she was 11 years younger. He had been a CBA customer since 1950, so the couple naturally went to the bank to seek advice. "They saw a few advisers, including Don Nguyen, who told them he usually didn't deal in such small amounts because he was one of the top financial planners. They felt confident and lucky when they got him," Swan says.

Nguyen's abilities, particularly for bringing in new business, were almost legendary in the financial planning division by this time.

CFP constantly reminded its staff who was "the best" by posting a league-style ladder around the office trumpeting the rainmaking acumen of its top performers at the branch level and across the division.

Nguyen had long been close to the top of the pile, writing $39 million of business - 3½times his target - at one point in 2007. "It was either public glory or humiliation, depending where you ranked," a former planner says.

Subtlety was not Nguyen's strong suit, with pride of place in his office given to a photograph of him posing next to the bronze bull on Wall Street.

But as the global financial crisis deepened, the kind of high-risk investments Nguyen was putting his clients' money into began to sour at a rate that became all too obvious.

Mervyn and his wife, Robyn, watched in horror as the value of their savings plummeted from $260,000 to $92,000. Once self sufficient, they were forced to see Centrelink. By this point, ASIC had been sitting on the whistleblower's fax for almost two months. CBA, on the other hand, had known there were problems with Nguyen's work for much longer.

Against this background, Swan was busy sifting through the paperwork, trying to find out what had gone wrong with her parents' life savings.

As the weeks and months ticked by, and still no sign of ASIC, the whistleblowers had a gutful of waiting and decided to anonymously inform senior executives at the bank as well as Group Security, the CBA division that investigates fraud and corruption.

Group Security's response on June 4, 2009, was that their allegations were "currently under investigation by the bank" and their identity would be protected if they chose to reveal themselves.

On June 20, Nguyen was called into a meeting with senior management and Group Security, and confronted with his various wrongdoings. He was not sacked on the spot but allowed to go away and resign on July 6, citing illness. CBA advised his former clients only that he had resigned.

Concerned about the scale of the problem, CBA went into damage control. It set up Project Hartnett, with 10 case managers busily working on Nguyen's files, and others assigned to clean up the steaming pile of mess as the financial crisis wreaked havoc on the financial markets.

Documents reveal Nguyen had placed the Blanchs, along with many other clients, into high-risk investment products, contrary to instructions. As the financial crisis raged on, these investments went into free-fall.

It is here things started to get complicated for the Blanchs, and the bank.On July 23, 2009, two weeks after Nguyen had resigned, a letter appeared that set alarm bells ringing for the elderly couple. A client relations manager let it drop that they had invested in "high risk" investments. "After looking at your account, I can see that most of the options you are invested in are high-risk options," the letter said. The second bombshell was that some of their money had been placed without authorisation in a mystery high-risk global infrastructure product offered by CBA.

Gobsmacked by the contents of the letter, they went on a mission to get answers. Instead they received requests for their original documents. They refused.

Then a letter arrived that changed the Blanchs' world. It was sent by CFP's customer experience manager on October 21, 2009. It contradicted the previous letter and said a review of the file indicated they were "moderate risk" investors. The letter included a table that claimed to be from the original documents prepared by Nguyen. "Based on the above evidence, CFP believes Mr Nguyen did meet your stated aspirations, needs and objectives."

Trawling through the letter and document, they discovered the table was different from the one in the original document. The letter also said it could not confirm why a "portion of their investment had been placed in the FirstChoice Global Infrastructure option". But in light of the oversight, CBA made a "final" compensation offer to the Blanchs of $6777 as a sign of "goodwill", without CFP admitting any liability.

The Blanchs were now hell bent on getting the bank to produce documents, which arrived about a month later. They were markedly different from the original documents. "I was stunned," their daughter said. Nguyen had left the bank in July; yet the cover letter, which included his name, was dated September 7, 2009. New pages had been added to the document, including a new table of contents, new financial forecasts and footnotes with Nguyen's name had been removed.

The bank claimed the document was original, according to the Blanchs. One source said the changes had been tailored to retrospectively address various aspects of their complaint about the shortcomings of the advice they had actually received.

Once CFP realised the Blanchs had kept the original documents, one of its customer experience managers admitted to altering the Statement of Advice to "simplify things," minutes of a telephone conversation between the manager and Swan show.

The bank then offered to almost quadruple their compensation from $6777 to $25,000. Within three months, it was offering $95,000, but without admitting liability.

Desperate for the income, the Blanchs agreed to a settlement in July 2010. But the money did not compensate them for their pain and suffering. "This is the people's bank. We feel like we have been betrayed and lied to," Swan said. "Trying to get our money back was like prising it from a cold dead hand."

Their money now sits in a term deposit, but not with the CBA. "When we finally extracted the money and terminated the account, we were told we could invest in other products. I said, 'My god, how can you think we would do that? There aren't enough tranquilisers in the world to let me go there'," Swan said.

As the Blanchs and other clients were trying to sort through their losses, Project Hartnett was in full swing, and the whistleblowers, spearheaded by Morris, had had enough. They went to ASIC's headquarters to see if they could instigate some action.

"It was so stressful. We had been waiting for things to happen after warning ASIC about the need for speed 16 months before and it hadn't rumbled into action as certain members of staff were busy making Nguyen's clients' profiles more conservative," one of the whistleblowers says.

In March 2010, two weeks after the whistleblowers went to ASIC's offices, the regulator seized Nguyen's files.

The files were crammed details about victims, including an 88-year-old woman who signed a document, which Nguyen later filled in saying "generation of more income was not important to her". It also said her time-line for investments was seven years with access to funds after five years, when she was 93. The woman, who had invested $1 million with CFP, said Nguyen did not tell her $30,421 of her investment would be paid to CFP, including $16,732 in commission to Nguyen.

As legal letters started to come in and complaints to the Financial Ombudsman Service continued, CBA agreed to a voluntary compensation scheme. Some former staff and industry observers believe it was to avoid the headache of official sanctions known as enforceable undertakings as ASIC trawled through the files.

Others suggest it was to cauterise the damage to their reputation.

Whatever the case, ASIC jumped on the bandwagon and praised CBA for its "co-operative and consultative approach".

Some victims saw it differently. They felt abandoned by the CBA and ASIC, and believed the bank should have acknowledged the extent of what went on during the Nguyen era. "I think the whole thing has been a cover-up from start to finish," Swan says.

By March 10, 2011, Nguyen had been banned from working in the financial services sector for seven years by ASIC, and the compensation scheme was in full swing. CBA sent settlement offers to clients, but some obtained by Fairfax Media, dated March 27 and October 11, did not disclose the existence of Nguyen's banning order or the extent of his misconduct, stating only that he had provided "inappropriate advice".

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