WA Inc

As an outcome of questionable business practices, precipitated by 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 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 1980s 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 $150 million government guarantee. Connell had previously been the adviser to the 1983 government purchase of Northern Mining from Bond Corporation for 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. • Bell Group, Robert Holmes à Court's flagship company, encountered a cash crisis and Bond Corporation and the government, through the State Government Insurance Commission, acquired major stakes in the business in April 1988, allowing Holmes à Court to walk away with $350 million. Two years later, the SGIC had sold all the stocks at a loss of over $160 million. • Bond Corporation • Parry Corporation A proposed petrochemical plant was to be built as a joint venture between Laurie Connell and Dallas Dempster, both being businessmen with close government connections. $100,000 was outlaid as a deposit on a block of land at Kwinana but otherwise the proposal did not proceed beyond designs and stood as a basis for fund-raising, loans, collateral transactions, development of proposed plant, management fees to Bond Corporation and, eventually, was sold for $400 million —$175 million being provided by a government agency, WA Government Holdings. == Losses incurred by the government ==

The government had lent large sums of money, 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. A minimum loss to the state of $600 million has been reported. In 1991, barrister Bevan Lawrence published what he regarded as a conservative itemisation of the government's actual losses. The figures are summarised as follows: : == The WA Inc Royal Commission ==

On 19 November 1990, Carmen Lawrence, the then Labor premier, announced her government's intention to hold a royal commission to "inquire into certain matters". This decision followed more than a year of strong public advocacy by the activist group, People for Fair and Open Government headed by the premier's brother, barrister Bevan Lawrence, Professor Emeritus Martyn Webb and prominent political scientist Paddy O'Brien. O'Brien edited The Burke Ambush, subtitled Corporatism and Society in Western Australia, which was the first substantial exposé of Burke's pro-corporate government—a collection of articles by himself and other Western Australian writers, including Hal Colebatch, Robert Bennett, Joseph Poprzeczny, John Hyde, Paul Nichols, Michael McKinley, Anthony Dale and Tom Herzfeld. The commission of three was headed by Geoffrey Kennedy and joined by Sir Ronald Wilson and Peter Brinsden, with a brief "To inquire into and report" whether there had been "corruption, illegal conduct, improper conduct, or bribery" on the part of any person or corporation in the "affairs, investment decisions and business dealings of the Government of Western Australia or its agencies". The following had died or been incapable on health grounds: Peter Beckwith (Bond Corporation), Bill Burgess (Rothwells), Robert Holmes à Court, Thomas Hugall (Rothwells), Bruce Kirkwood (State Energy Commission of Western Australia), Andrew Mensaros (former Liberal state minister), Terence McDonnell (solicitor), and Jack Walsh (Rothwells). The following declined to give evidence: Yosse Goldberg (entrepreneur), Peter Mitchell (Bond Corporation), Tony Oates (Bond Corporation), and Ms Kim Rooney (wife of David Parker). Dr Shrian Oskar was serving a 6-year prison term in the UK. In an earlier finding, the commission had summarised:[The Government was not entitled] to risk the public resources of the State without its actions being subjected to critical scrutiny and review. Effective accountability was a casualty of its entrepreneurial zeal. Influence in the conduct of this State's public affairs was captured by a small group of self-interested businessmen. and a list of recommendations impinging on open government, • Contracts relating to the Dampier to Perth Natural Gas Pipeline • The acquisition of Northern Mining Corporation NL in 1983 • The Swan Building Society • SGIC's acquisition of shares in BHP and the Bell Group • The old Perth Technical College site • Role of Mr Ray O'Connor in alleged bribery • Allegations arising from the trial of Robert Mark Smith and Robert Paul Martin, including those with respect to surveillance activities • The adequacy of certain police investigations • Political donations Costs and outcomes The royal commission cost $30 million, including $12.5 million in witness costs. Of the latter, $3.6 million funded Burke's own legal fees ($1.71 million) and those of David Parker ($1.92 million). Burke and his predecessor, the Liberal premier Ray O'Connor ultimately served prison 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 Western Australian Development Corporation's remit was reduced over time, and it was finally wound up in 1998. ==See also==