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Tuesday, July 23, 2024

Chris Jordan’s valuable insights into shell companieS

In 2021 nine politicians including Albanese were told of Chris Jordan's previous direct involvement with a company in a secrecy jurisdiction. But none asked governance questions about what the former Tax Commissioner was doing with an Isle of Man company.


Chris Jordan’s valuable insights into shell companies

Neil Chenoweth Senior writer

Jul 23, 2024 

Labor’s plan for a beneficial owners register seems to have suffered the same fate as Malcolm Turnbull’s stab at it in 2017: a consultation process after the election, then little more is heard.

It didn’t help that former tax commissioner Chris Jordan wasn’t a supporter of the register. Greens senator Peter Whish-Wilson knows this because he asked him about it.

Former tax commissioner Chris Jordan didn’t see any point to a register to identify the people behind shell companies. Alex Ellinghausen

In 2016, Jordan was the hero of the hour, leading the international collaboration to follow up the Panama Papers (documents leaked from law firm Mossack Fonseca). They “demand purposeful and swift action,” he promised. “I will not simply stand by and admire this problem.”

Turnbull made a beneficial owners register an election promise, amid general fervour for reform. One of the only contra notes came from curmudgeonly John Passant, a former assistant commissioner of tax and University of Canberra law lecturer.

Passant, who died in 2020, grumbled in a letter to The Sydney Morning Herald in April 2016: “It seems appropriate for the Commissioner of Taxation, Chris Jordan, to allay any concerns we taxpayers might have about his previous position as a partner in tax and accounting firm KPMG. For instance, under his watch, did any arrangements involve tax havens?”

In fact, Jordan could offer a unique perspective on this. So, when Whish-Wilson asked him about the register a year later at Senate Estimates in May 2017, Jordan could have answered many ways.

One way would have been to say: “Well, it’s funny you should ask, because back in the day I helped a mate set up a shell company in the Isle of Man and I received close to $1 million in payments from it, and that just goes to show there are many completely legitimate ways to use secrecy jurisdictions, so let’s be careful about a register.”

That would be transparent. What Jordan actually said was: “A register of beneficial ownership is just, you know, what someone says someone else owns so … it could be good, but it could be just a lot of stuff that doesn’t really help us.

“Because if … people want to do the wrong thing, they’ll be putting all sorts of different names in places, so I’m not sure it’s a panacea as such.”

Jordan wasn’t a supporter. Nothing wrong with that! But it underlines the ongoing awkwardness he created by failing to disclose his previous history when he became commissioner in 2013, and in annual disclosures since then until he stepped down in February.

Last month, The Australian Financial Review revealed how Jordan, with fellow KPMG partner Wayne Jones, helped a friend set up Dinnans Limited in the Isle of Man in 1998 before it received $3.38 million from an unknown party.

There were also claims Jones made in a 2018 court case, that Jordan had made up to $415,000 in undocumented loans, ostensibly to fund Jones’ casino junkets business. Jones said he repaid the debt via a property transfer to Jordan’s wife days before Jones’ bankruptcy proceedings.

These deals were not necessarily improper, but they’re very unusual for a future tax commissioner. It was important for the government to know about them, and governance experts said Jordan should have disclosed them.

Then again, how was it that in his 11 years as commissioner, no one asked about these matters? It’s believed an ATO audit of Jones discovered the Dinnans payments in 2017, but nothing came of it.

In June 2021, an anonymous letter spelled out in detail Jordan’s link to Dinnans, and went on to make unproven allegations about it.

The letter was sent to nine current and former politicians, including then-opposition leader Anthony Albanese, Senator Penny Wong, then attorney-general Michaelia Cash, Greens leader Adam Bandt, and senators Jacqui Lambie and Pauline Hanson; five senior regulators and public servants; and eight journalists and media organisations.

Given the critical position Jordan held, it seems a simple governance interest that the government should have checked out, even if just to dismiss any doubt.

But nothing came of it. The issue was swallowed up in silence – much like the beneficial owners register.

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Neil Chenoweth is an investigative reporter for The Australian Financial Review. He is based in Sydney and has won multiple Walkley Awards. Connect with Neil on Twitter. Email Neil at nchenoweth@afr.com.au




Barbara Pocock