Sroubek must go now, Jacinda


Dear Prime Minister

Re: Karel Sroubek

I am writing this to you regarding the activities of Czech national Karel Sroubek.

You are as well aware as I am that lying to border officials or any officials for that matter is a serious offence. Mr Karel Sroubek would have been aware of it himself when he approached New Zealand border officials for the first time back in 2003 that he must be honest with the authorities.

As we have now seen that was not the case. Mr Sroubek has conducted himself in a way that opens valid questions about his intentions. He claimed to be getting away from corrupt Czech authorities and that his life would be in danger were he to go back. He arrived on a false passport under the name Jan Antolik and was granted residency in 2008. He built a new life as a kick boxer, a gang associate – something that would immediately generate police interest – and as a businessman importing drink.

Yet Mr Sroubek continued to commit offences. He was caught importing 5kg of MDMA, which is used to make ecstasy and sentenced to 5 years and 9 months. A Parole Board hearing in October declined him release from prison, saying his story was long winded and manifestly untruthful.

Now, I have no idea what you heard or when you heard it. I am trusting that you have been and will continue to be totally honest about Mr Sroubek and the allegations surrounding him. I am trusting that Mr Lees-Galloway was totally truthful in his conduct as the Minister responsible in this matter so far and that he, like you, will continue to be totally honest about what has happened and is going to happen. New Zealanders have been quite clear that they are not impressed with this case. As Prime Minister you told New Zealanders to read between the lines. They did and found that they have doubts about the whole case.

Mr Lees-Galloway sent Mr Sroubek a letter stating the conditions of his and warned Mr Sroubek. The warning was that should evidence of activities contrary to what the Minister had been told come to light, his residency would be void and he would be potentially eligible for deportation again.

I accept that when people leave countries where they allege persecution one has to consider the severity of the danger they are in. I accept that hasty departures in such situations mean one might not have had time to get their immigration documentation in order.

But as a New Zealand citizen, tax payer and law abiding person I want to be very clear with you and your Government, including Mr Lees-Galloway now. Mr Sroubek had had multiple chances to come clean about his activities and history in past brushes with immigration authorities. Mr Lees-Galloway gave Mr Sroubek a final chance to come  clean. He has failed to do so.

Mr Sroubek has had his chances. He lied multiple times. He has committed crimes serious enough to give him significant jail time and the Parole Board in October declined his release How and why would New Zealanders, the authorities or the Government of New Zealand want to trust him now?

Deport him. That is all.

I thank you for your co-operation on this matter.

 

Addressing banking sector concerns in N.Z.


I remember the onset of the 2008 Global Financial Crisis all too clearly. In the space of about two years 31 separate New Zealand finance companies crashed and burned, taking about N.Z.$3 billion worth of savings with them. The crash of so many companies and the resulting fallout cost numerous jobs, led to criminal trials for fraudulent activity and caused a loss of trust in banks. Nine years later, not having learnt much from the previous crash New Zealand, like the world at large is at risk of another, possibly bigger, crash.

The causes of the 2008 Global Financial Crisis are well documented. In the United States lax banking regulations led to the failure of Fannie Mae’s, Freddie Mac’s, Lehman Brothers amongst others . Hundreds of billions of dollars was wiped from the value of the U.S. economy when Lehman Brothers collapsed. The bailout plan authorized by U.S. President George W. Bush cost about U.S.$700 billion to enact. Following these collapses President Barak Obama passed legislation called Dodd Frank Act which enabled large scale reform of the banking sector, in terms of transparency, tightening up reporting requirements and protecting whistle blowers.

In New Zealand the following are just some of the financial institutions that failed in 2006-2010 (N.Z.$)¹:

  • Capital Merchant Finance ($190 million)
  • South Canterbury Finance ($1.6 billion)
  • Provincial Finance ($296 million with $273 million recovered)
  • Bridgecorp ($467 million)

¹67 went into liquidation or receivership, or entered moratoria all up between 2006 and 2012

I believe that legislation needs to be passed in two respects to bring accountability to the banking sector, but also institute a better code of practice than the one that exists. Elsewhere I have mentioned the need for better whistle blower protection. This is to ensure that the fate of whistle blowers at the Ministry of Transport who exposed fraudster Joanne Harrison and lost their jobs for doing so, is not repeated.

But perhaps the biggest reforms that I think need to be made are to how individuals enter and exit the financial industry, and the range of tools that can be used in dealing with significant breaches. We have the Financial Markets Authority investigating significant breaches, which is well and fine. But, given the size of some of the aforementioned collapses and the fact that individuals who had leading roles in precipitating said collapses were handed what I think were very light sentences, I think the law needs an overhaul.

For small fraud (less than N.Z.$250,000), claims can be dealt with in the District Court and the High Court deals with larger claims. We saw out of the court trials arising from the collapses of companies like Bridgecorp that in many cases the sentences were too light. The sentences did not appear to take into account ill gotten assets such expensive cars. Nor did they appear to stop the defendants from working in the industry again. The sentences should be proportionate to the size of the losses incurred by the investors. Such a scale could look like this:

  • Category E (dealt with in District Court) up to $250,000 = suspension of trading license + fine (up to $250,000) or jail sentence (up to 2 years)
  • Category D – $250,000 to $10 million = loss of financial trading licence + confiscation of luxury assets or fine (up to $500,000) or jail sentence (up to 5 years)
  • Category C – $10 million to $100 million = loss of financial trading licence + confiscation of luxury assets + fine (up to $1 million) or jail sentence (up to 15 years)
  • Category B – $100 million to $250 million = loss of financial trading licence + plus fine (up to $2 million) + jail (up to 25 years)
  • Category A – $250 million+ = loss of licence + fine (up to $4 million) + jail (up to 40 years) + confiscation of luxury assets + loss of passport

Sound harsh?

Not as harsh as thousands of investors having their retirement plans and anything that they might have been relying on their investments to fund now having nothing to show for their efforts. Not as harsh as hundreds of people working for these forms in good faith finding themselves without a job because of the collapse. Nor as harsh as any community finding that sponsorship of community events and projects have just gone up in smoke.