Crown Resorts inquiry reaches turning point and Commissioner Bergin loses patience

James Packer at the $2.4bn Sydney casino project being built by Crown Resorts. Picture Rohan Kelly

It took more than 50 days of hearings. But Patricia Bergin has finally lost patience with Crown.

It came, somewhat appropriately, on the day Crown’s hand was forced — totally unsurprisingly — to delay the opening of its Sydney casino.

Bergin’s outburst on Wednesday morning, after Crown admitted a form of money laundering likely occurred through its bank accounts, could prove to be the turning point in the James Packer-backed casino group’s battle to escape serious sanctions, if not the ultimate sanction, on its new Sydney casino licence.

Where so much of what has been presented to the ILGA inquiry has related to past events, what was revealed on Wednesday about Crown’s attitude to money laundering went directly to the culture of the organisation over the past year.

Crown’s Counsel Neil Young unreservedly accepted that Crown’s former AML general manager Louise Lane’s recommendation last August to do a full review of Crown’s Southbank and Riverbank accounts through which it has now admitted money laundering occurred should have been acted upon “as a matter of urgency”.

NSW Casino Inquiry - Commissioner Patricia Bergin. Supplied

Lane also recommended accounting firm Grant Thornton review the accounts, which only belatedly took place a few months ago once the inquiry was well underway — and which led to Wednesday’s shock findings.

What was more galling was evidence that Crown’s lawyers Minter Ellison apparently told its client that it should not conduct a review of the suspect bank accounts.

Minter also recommended Crown undertake no root and cause analysis of the failures that led to the arrest of its staff in China because of a class action, a decision which has also been a source of significant annoyance to Bergin. It also advised on the now disastrous newspaper advertisement by the board.

As recently as last week chief executive Ken Barton was also rejecting ANZ Bank’s assertions that Crown’s communications with the bank over the Southbank and Riverbank accounts revealed “failures” and “very serious issues”.

Bergin warned last week that Barton’s position could lead her to make an adverse comment against him in her findings. Barton has since made two more statements to the inquiry.

But perhaps what most annoyed Bergin was that Crown knew the Grant Thornton report and another report into the suspect bank accounts by consultancy Initialism were being finalised more than a week ago but said nothing to the inquiry until 11pm on Tuesday evening.

As Bergin put it: “A lot of the problems exposed (in the inquiry) were in the past. This is a present problem. It is one that has the ramifications of the most serious kind.”

Her concerns were echoed by ILGA chair Philip Crawford, who also took the opportunity to express his disappointment that Crown did not offer to delay the Sydney opening, noting: “They are not picking up the vibe.”

The positives for Crown out of a seemingly disastrous day are that once Bergin gets over the shock of its eleventh hour admissions, its AML structures and procedures going forward will be radically improved and will be staffed appropriately.

Crown Resorts chair Helen Coonan with CEO Ken Barton in the Crystal Club at Crown, Melbourne. Picture: David Geraghty / The Australian.

Indeed, with Helen Coonan as chairman, Crown on one view now appears a shadow of the seemingly recalcitrant company on governance and risk management that it was when the inquiry was first called.

But the problem for Coonan and her board is that the changes that have taken place in recent months, especially in relation to AML, look rushed.

Bergin herself warned many weeks ago that Crown was fast-tracking too many complex changes to meet its mid-December deadline for the Sydney opening.

There is also the question of what Crown’s money laundering admission means for Austrac’s current investigation into the company and the Victorian Commission for Gambling and Liquor Regulation’s investigations, which triggered a show-cause notice to be issued last month.

It is now hard to escape the conclusion that Crown’s overly legalistic approach to managing its failings over many months could mean Bergin makes it pay the ultimate price for its sins.