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John Passant

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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)

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Some advice to Paul Hogan: quit while you are ahead

Paul Hogan is an Australian comedian. Or maybe American. Or maybe somewhere in between. For tax purposes only of course.

Paul and I have had a close relationship. I have followed his battle with the Australian Crime Commission over the last five years of Operation Wickenby.

The ACC had been investigating him for alleged crimes arising out of allegedly hiding money in tax havens and allegedly not declaring income, and other activities.  According to APP and as reported in the Sydney Morning Herald:

An angry Hogan ha[d] already demanded the ACC apologise, saying he had been “publicly branded a criminal, a fraud, a money launderer and tax evader”.

From this we can deduce that the investigation may have covered alleged fraud and alleged money laundering.

After five years the ACC dropped the investigation in November. The head of the ACC said at the time:

The delay in resolving this long-running investigation hinges on the international complexity of the structures put in place by those who are the subject of the investigation and a clear strategy by those being investigated to legally challenge the ACC’s attempt to establish the facts in the case.

Now Hogan has threatened to sue the Federal Government for $80 million over the investigation. The $80 million is evidently lost earnings of $15 million a year for five years plus interest. That much for an ageing unwanted actor?

Hogan has no chance of success, unless he can show abuse of power or misconduct. 

If it were a police investigation I would feel confident that the basic rules of  democratic society would apply.

Criminal investigations are not normally recompensable unless something extremely untoward has happened. Otherwise every suspect would be suing every investigator all the way to the High Court for abuse, misconduct or similar activity. 

I think it is unlikely that there was abuse of power or misconduct given the high profile nature of the case and Hogan’s close relationship with many in the media. Logic implies that the ACC would have proceeded cautiously on this case.  But of course you never know….

The announcement of Hogan’s intention to sue looks pretty hamfisted. It mentions approaching Stephen Keim SC to represent Hogan. Approaching him? Why isn’t someone already locked in?

You mean you announce you are going to sue the Federal Government without having sought a barrister’s advice about the likelihood of success of the case?  Not a good move, unless this is all really just a publicity stunt.

The cynic in me says Keim’s name was mentioned because he is the lawyer who successfully represented Mohamed Haneef. Haneef has just won a compensation case against the Government for wrongful imprisonment after being held 12 days incommunicado on suspected terrorism activities.

So the tactic looks like it is about equating Hogan with Haneef. Indeed, Hogan’s solicitor in Australia explicitly makes the link.  He is reported as saying:

If you’re going to compensate Dr Haneef, on what basis do you not compensate Paul Hogan, when they did pretty much the same thing to him?’

Give me a break! Was Hogan locked up for 12 days without contact with the outside world and without representation and constantly questioned? 

So what do we know about Hogan publicly in this now ended investigation? Here is some of the alleged activity that has or had allegedly caught the eye of the ACC and other investigators and the ATO.

Hogan lived in Australia between 2002 and 2005 and then returned to the US.  He allegedly tried to use differences in tax residency laws between the two countries to open up periods of time in 2002 and 2005 he was not a resident of either country. 

This meant there was a window of opportunity when Hogan was ’stateless’, a window through which Hogan allegedly appears to have shovelled a lot of money.

If he was in fact not a resident of either country when he received or became entitled to the money then he wouldn’t be subject to tax in those countries if the income didn’t have a source there (which it wouldn’t if his advisers were any good).

But Hogan didn’t just allegedly play the residency game. He also allegedly had structures set up through the British Virgin Islands – Trelene Investments and GB Films.  Hogan denies any connection with the entities.

Why the British Virgin Islands? It’s a tax haven. That means two things.

There is no income tax paid there, and it has strict secrecy laws which mean that regulators from Australia and the US can’t get their hands on the primary documents. Bank employees in those countries could be jailed if they did provide the information to foreign jurisdictions, especially their tax authorities.

Hogan can deny any connection to these companies in the media. But if he sues the Federal Government for $80 million he could be called to give evidence on oath.

In the quest to justify the investigation and show it is not tainted by misconduct a cross examiner for the Commonwealth might pose uncomfortable questions of Hogan about his affairs.   My advice to Mr Hogan would be not to risk it.

One of the reasons is that he he still has his tax case and tax bill to fight.  Earlier this year the Tax Office raised assessments against Hogan. The amounts involved, according to Chris Seage in the Daily Telegraph, could be in the order of $95 million, taking into account not only the tax owed but penalties and interest. 

The calculations go back to 1986 and the penalties imposed are 75% of tax in dispute. My understanding is that the ATO can only go back that far or impose those levels of penalty if they allege fraud or evasion.

 The ATO tax bill is a civil matter and so only requires proof on the balance of probabilities (ie something slightly more than 50/50).

The ACC case was a criminal matter and so the burden of proof required is beyond reasonable doubt – something more akin to 80 or 90 percent certainty.

Hogan will fight his tax bill. I’d be so bold as to suggest his threat to sue the ACC for $80 million is an attempt to put into play an amount that might reasonably offset the tax bill. The $80 million claim might be about leverage in his tax dispute. The thinking might be: I’ll settle my tax bill if you give me some compensation for the ACC criminal investigation and the wherewithal to pay it.

If that is the case then the $80 million i likely to be overshoot, and Hogan might graciously concede to settle for much less but for an amount that helps him pay his tax bill before it goes to Court and the details become public.

Of course this is pure speculation on my part. And I am a cynic who sees ulterior motives in saints.

Hogan could win his fight against his tax bill.

But why risk having information made public that might tarnish the halo? Why risk being put under oath? Don’t sue, Paul. Settle the tax dispute.

Some in the media have been portraying the Hogan issue as an indication of the inadequacies of both Project and Operation Wickenby. Some taxpayers might feel emboldened by Hogan’s seeming success in fighting the ACC (but not the ATO as yet).

I have two words in response. Michael Milne.

Milne set up the media advertising company most well known for the ‘But wait, there’s more’ Demtel steak knife advertisements. He was found guilty of serious tax fraud and sentenced to 8 1/2 years jail. His advisers were Strachans, the same advisers among others Hogan also used.

Philip de Figueiredo, an alleged principal in Strachans, appeared in a Brisbane Court on 27 December after extradition from Jersey, charged with two counts of two counts of conspiracy to defraud the Commonwealth and one count of money laundering. He has denied the charges. 

Despite the dropping of the Paul Hogan criminal investigation, the Wickenby criminal and/or tax noose is tightening around a number of other players.

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