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March 2007 Edition ---- to page back through Previous Editions click here

Well at time of writing the news is thick with the cases of sexual misconduct of the former Rotorua police officers and the new release of information which had been suppressed while trials took place. Most of the allegations related to the first half of the 1980s. It should not be too much to expect that the focus will now fall upon the accounting scandals of the later 1980s and early 90s and a similar set of trials should take place with respect to them.

Part of the problem here is the very severe sentences possible with conviction for sex crimes. The crimes rank alongside murder and they can be that serious but when a complainant/victim is shown involved in family pony activities and can speak articulately one has to wonder. Such luxury is not a typical person's fate. Her biggest qualm seemed to be that she was not believed which is understandable, but we are not really questioning this verdict. Juries don't do the sentencing here and if they convict they have to rely on a judge to have a similar idea of what is an appropriate sentence hence they might decide that no conviction is safer.

The type of alleged crime here is quite a bit different from accounting but there are close similarities as well especially with regard to cover-up regimes and promotions of state servants in order to achieve them. It is said that Mr Rickards was promoted 4 times in quick succession once news (or allegations) of this conduct came to hand, catapulting him to being in line for top brass. Obviously he couldn't be guilty when he has got those promotions, a sizeable trusting section of the public is bound to think, according to the strategy, which has lasted very well. A recent case with the police would seem to involve Rob Pope, now the second in charge of the Police Department as we understand it. His promotion would seem to us to have come from getting a murder conviction in connection with the presumed fate of two teenagers who went permanently missing from new year's celebrations in the Marlborough Sounds late last century. But the several people who are recognised as having the last definite sighting of the couple appear to all claim that the couple went into the company of an unknown man and not the convicted one and onto a boat quite different from the one that the convicted man was in possession of. The unknown man and the boat were sighted at very close quarters. There is no suggestion that the convicted man had come into the presence of the missing couple subsequent to this sighting. The claim is that the witnesses were mistaken. There are several other anomalies in the case. A large portion of the public want convictions in such cases. Preferably of the culprit, but otherwise any plausible character will do, as long as it is not them of course but these people see themselves as not being of that "type". This convinces those predisposed to such crime that you can't get away with that sort of thing, or so the argument goes. But the message could be that someone else will probably be convicted and then you are as safe as a church. Mr Pope's skill appears to be one of jury and case management. The hearing was drawn out and no-one wants the country to have to go through that again. And the parents of the ill-fated couple were at the trial every day. Attention to such detail does the trick.

Disquiet about this case seems to have dissipated which might also be the result of management. There was a unofficial report of a communication from the convict in which he only seemed to be interested in getting some porn. That would put off many supporters. And there were more formal reports of his marriage while inside where he still is and will be for some time. Perhaps he is getting conjugal opportunities providing he does not kick up any fuss.

Well the best parallel in accounting would probably be that of Elizabeth Hickey. We think she was academically very capable. If you put something about zero or low coupon bonds in an exam paper she sat, she would smell the potential rat a mile away and no matter how the the bonds had been dressed up she would apply the Yield to Maturity calculation in a jif and come up with the amount of income or expense as the case may be which is applicable to each accounting period before you could say Jack Robinson. Each university produces a few of these A plus students each year to the envy of the rest of us. But Ms Hickey had that additional x-factor which would propel her to what is arguably the top accounting job in the world, which she still holds, that of Director of Technical Activities at the International Accounting Standards Board. That x-factor is the ability to get it completely and utterly wrong, not when the occasion demands it, indeed when the occasion demands otherwise, but when the politicians, colleagues, company directors and associate professionals subtly demand it by painting a brilliant future for her if only. So it was, in May 1990. being well aware of two huge zero coupon bond parcels being held by the Bank of New Zealand Ms Hickey claimed to see one as an insurance policy which the bank was claiming it to be and the other as having a variable rate of interest making it, she claimed, acceptable for the bank to claim two years of interest earnings, each at a highly excessive straight line interest apportionment. Hence the audit report she was "utilised" for went unqualified. Unlike the University exam room Ms Hickey had access to text books and a telephone but all to no avail.

We wish to go on and deplore the breakdown of the separation between those who make the rules and those who set who apply the rules in recent governments of this country, particularly the current one. Sometimes it's a case of a legislator having executive power such as the associate minister of immigration who seems to be able to determine precisely who can come in and accepts recommendations from his colleagues in this respect. Such recommendations would always be for the most honourable reasons of course, such as perhaps the applicant for migration having tiled one's house for free. The Green party seem to be getting the right to administer the "buy kiwi" campaign. It would seem ok to let that party decide on what the rules will be and for the government to rubber stamp whatever they come up with but the Greens seem to be getting into the nitty gritty which is really the place of loyal career public servants.

But for the most part it is the other way around with claimed independent people being appointed to various functions then subtly told what to do or who to follow if they want repeat or additional appointments. A former electricity commissioner for instance did not follow that unofficial condition and hence he is a former commissioner. The other bad trend is to appoint people to what are officially overview functions and then allow everyone else to treat it as a responsibility function. Then things that the government wants to fall through the cracks can so fall through. To perhaps make it clearer the Securities Commission and the Serious Fraud office seem to have overview functions. They have wide powers but no obligation to be fair and comprehensive. That falls to another department such as the police. The overview bodies choose their cases. They come along and say this problem is significant and needs special attention so we will take it over. So the police leave all such cases to them even although these other cases have not been "chosen".

There is more to come on this topic.

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