Senator blasts watchdog

by Chris Griffith
Published 19 May 1996 in The Sunday Mail


my face


Queensland's Office of Financial Supervision has been attacked in the Senate for failing to investigate complaints about credit unions.

In an adjournment speech, Democrat Senator John Woodley questioned the office's independence, as it was funded by levies from credit unions and building societies it oversaw. "Is it in the best interests of QOFS not to bite the hand that feeds it?" he said.

Senator Woodley cited two examples he believed had been inadequately investigated.

The first was the office's decision not to investigate the alleged victimisation of Brisbane whistleblowers Kevin Lindeberg and Des O'Neill by the Queensland Professional Credit Union.

"The issue is that the Queensland Professional Credit Union took reprisal against a member when he tried to question management of the QPCU," he said. "That person's membership in the credit union was terminated without giving that member his rights according to the credit union's own rules."

Senator Woodley said the office took no action, despite a Senate Privileges Committee report which concluded "a reprisal" had occurred. "They (QOFS) did not bother to give reasons."

In 1993 Mr Lindeberg and his wife's accounts were closed, and Mr O'Neill was denied membership after giving evidence critical of the credit union's general manager and a director at a Brisbane hearing of the Senate Select Committee on Superannuation. "Where are credit union members to go for a remedy for a blatant disregard of proper processes, as in this case?" he said.

Senator Woodley said a KPMG auditor had misled the same credit union's 1995 annual general meeting about the financial affairs of its general manager.

He said that auditor had told the meeting the Tax Office had completed its investigation into the general manager's conversion of $77,000 worth of long service leave and holiday pay to superannuation at only 15 percent tax rate.

"This assurance was expressed in such a way as to leave most shareholders with the impression that the ATO was accepting the transfer as a bona fide transaction. This raises a serious question: was the credit union meeting in October 1995 misled by KPMG?"

by Chris Griffith