Was it petty ejection from Council in order to cover up financial prestidigitation - maybe
Dear Beagle Editor,
Regarding the APOLOGY BEFORE APPEARANCE 28-11-2017
A ten year Journey of 'Millions of Dollars' and how much survived the experience?
The story of COLLATERAL DEBT OBLIGATIONS or what in the finance industry were designated at the time as “colostomy bags”!
I refer to my appearance before the Eurobodalla Shire Council Meeting of Tuesday November 28 this year,. where the Mayor requested that I make an apology for the alleged actions of mine at a previous meeting four years ago. Because it was in my opinion and from my recollection, not a true and correct record of what happened. MINUTES OF THE ORDINARY MEETING OF EUROBODALLA SHIRE COUNCIL HELD ON TUESDAY 23 JULY 2013 QUESTIONS FROM THE PUBLIC GALLERY (Agenda Items Only) (Minutes of Questions from the Public Gallery are a summary only and do not purport to be a complete transcript of the proceedings.) PF13/23 E13.7042; E99.3517; E13.7095 Mr Joe Potts addressed Council in regard to items O13/112 Adoption of Policies – Compliance and O13/113 Investment Report. A copy of Mr Potts’ submission is available on Council’s website. At the conclusion of Mr Potts’ address to Council, Council Thomson advised that he wished to lodge a formal complaint against Mr Potts. Councillor Thomson stated that after the presentation Mr Potts had accosted him by deliberately bumping him and said, “Any more smart comments from you and I will have you.” Councillor Thomson asked that Mr Potts be banned from this Chamber and demanded a public apology from Mr Potts. It read more like a 'verballing' .in police-drama terms?
In fact if, as I explained to the Mayor, should I apologize then that would be tantamount to admitting the veracity and truth of what the was stated in the Minute. Thus I was denied my presentation five minutes in the Public Forum of that meeting. Not only was I denied the opportunity to speak on important matter but told, once from the floor to remove myself, and then yet again on my return to the gallery to be asked to leave the Council Chamber. This I did promptly and quietly conforming to the Mayor's instructions.
Over a ten year period I have attempted to use various methods to reconcile exactly what has happened to the millions of dollars of Ratepayers and Residents hard earned monies allocated to CDOs. Methods such as appearances at Council Meetings; Freedom of Information requests; Letters to the GMs at the time and letters to Newspapers.
Further more the local State Member of Parliament has refused to give me an appointment at any time over this ten year time frame. Requests to a further five State MPs – five from both Labor and Liberal Parties have only elicited one phone call asking what it was about. That is the sum total of response received from elected people supposed to represent the people and ensure that finance, law and services are managed in the best possible manner.
After reviewing the last seven years of the Shire's monthly 'Investment Reports' it would appear that at least one of the million dollar investment CDO had gone AWOL – just dropped off the radar. With this in mind it occurred to me that I should request for further clarification. However, I had decided never to attend another meeting after the September 2013 frustration. With a history of continual comments from two Councillors such as “Here He goes Again” on most occasions my presentations would reduce the five minutes to a few minutes while things calmed down in my mind so that one could resume the requests and complex facts presented each time in the Chamber of the ESC.
Finally in the September and October Investment Reports of this year there appeared a UFO? (unidentified financial obligation), a NAMELESS CDO !?? For the first time and incredulously as it seems, this spurred me on to present at the aforementioned meeting.
An investment without a title would make one wonder was it a typo or some other genuine factor that, for the first time in ten years, happened to omit naming details of any listed investment in Councils Reports.
Joseph H Potts Narooma
An Overview: LOOKING FOR THE UFOs -Unidentified Financial Obligations - COLLATERAL DEBT OBLIGATIONS – a decades journey of OBFUSCATION-obstruction – PROTECTION-retribution-MOTIVATION and finally at the end of the ten year PROCESS we get REJECTION.
Motivated by the Risk to Reward Ratio on record of about 1% extra than Term Deposits that were virtually government guaranteed and a Securitized Mortgage Product where a 5% default on the total number of mortgages in the CDO contract would cause the object to explode and be unsalable at best.
2 Council recently had been understood to have closed the books on CDO investments. But
after searching the last seven years Investment Reports on a monthly basis it appeared that a
particular CDO had been left off the reporting trail. This spiked my interest once more.
3 A request on the Freedom of Information Form was submitted for details of the CDO
details back from 2009 to 2002 in order to reconcile what, and where, these securities had
traveled to. Cost of $120 and said 'not to be in the Public Interest' = no result for me.
4 The motivation both on the macro and micro social effects of the losses in the millions of
dollars from Australian Institutions – Shires, Charities, Religious Organization and
Universities must have had enormous hidden consequences on the financial effects felt
by much of the general public.
5 This search for the Profit and Loss Report in ESC CDO Book has, to the best of my
knowledge, been made clear. Even in the two subsequent Cole Reports the exact P & L
has not been made clear and specific.
6 Over the years correspondence with the Audit Committee has never received any tangible
results other than 'do not worry we have it in hand'.
7 The local State Member has never given me an appointment in all this time and five of the
Labor and Liberal ministers denied any response except from one M/s Kotsis and that was
two telephone conversations.
8 With the mantra 'here he goes again' from two coucillors at the time it was difficult for a
new comer to present and keep his thoughts on track as well as loosing valuable minutes.
9 Here again, in an attempt to get my concerns across to Council, I reverted to priming two of,
what I hoped at the time, might support the extension of my five minutes in order
to expand my reasoning and convey why I was fronting on so many occasions.
10 Finally on the last meeting of September 2013 I decided after my presentation that this was
it. I shall never front again. The meeting was adjourned and I went down to the seated Councilor who was conversing with the Secretary and tapped him on the shoulder gently and whispered in his ear that 'I did not appreciate his half-smart remarks' No one could overheard my comments and I got up of my seat adjacent to the said Councillor and quietly
the Chamber, hopefully never to return.
11 Unfortunately this was not to be as about six months ago the Motion of Censure was brought
to my notice thus motivating me along with the UFO to front Council at some time in the
near or distant future. Surprisingly I got this opportunity to ask where and what happened to the UFO and the rest is history as they whoever they are say?
Some Links: MINUTES OF THE ORDINARY MEETING OF EUROBODALLA SHIRE COUNCIL HELD ON TUESDAY 23 JULY 2013 Review of NSW Local Government Investments Cole Report – Review of NSW Local Government Investments NSW Local Government Investment in CDOs: A Corporate Governance Perspective Council’s CDO losses to top $19 million March 10, 2016 To date, losses from investments in Collateralised Debt Obligations (CDOs) have been confirmed as totalling $19.12 million by Gosford Council’s CEO, Mr Paul Anderson. NSW Local Council investment exposures Local government investing: a form of gambling? Councils ignored fiduciary responsibilities WEB CAST EJECTION at 30min time stamp
Further reading: Enough to bring the House of Cards tumbling down
June 4, 2017 by Lei Parker
Peter Bernard is a man of figures. He is also a man who pays particular attention to Council’s finance reports and has often presented to Councillors via the Public Forum. Any conversation with Peter starts with the era of the Global Financial Crisis and CDO’s or Collateral Debt Obligations. In a nutshell the world was attracted to invest in CDOs because they gave a good return. Driven by greed and by an assurity that CDOs were a safe investment Eurobodalla Council also invested. Unfortunately CDOs were less than safe and were actually quite dodgy – and they collapsed bringing down the world economy with a Global Financial Crisis. Eurobodalla Council was left with egg on its face and a ten year struggle to try to gain back the money it had potentially lost. In Council’s recent report on CDOs they offered that, while Council was embroiled in the CDO fiasco it could now report that no monies were lost and of the $20 million invested they had actually made $ $2,175,318 in interest. To the less fiscally capable this might seem a good windfall of 10% however Blind Freddy and others recognize it as 10% over 10 years and not 1 year. Fortunately however the ratepayers didn’t lose their investment as many around the world did. The May 9th, 2017 report states: The cumulative original purchase price of the CDO’s was $20.12M over the period on investment in CDOs, with approximately $17.0M principal returned in total and when total interest received, recoveries from legal action and costs of legal action are taken into account, there is an overall net favourable position of $2.17M
Of interest to Peter Barnard is the fact that Council decided to write a summarizing report on CDOs and call it the Collateralised Debt Obligation (CDO) Final Report as if to wipe their hands of it all and put the matter finally to bed. He notes that there was no request from the State to do so nor any request from auditors: so why was the report written? Peter tells of the time when the Government advised that there were problems with CDOs. The alarm went up and it all came to a grinding halt however…… Peter noted that a CDO was secured by Eurobodalla Council after the alarm date while the court cases were going on to sort out the mess. A CDO for $1 million with Structured Credit Resources. He was surprised to see it in a financial report as it appeared to go against Government advice and direction of the day. Mr Bernard questioned this in open Council meetings on numerous occasions and, while he specifically asked for an explanation, he has received no response. He and Joe Potts also formally asked the Audit Committee of the day about SCR and found that they were now listed SCR Australia Pty Ltd and the $1 million CDO remained. They asked “Are there any ongoing trailing commissions and exactly what has happened with SCR?” Mr Bernard advises that he has been sent letters that deny that Council ever transacted with SCR. It is easy enough for an independent auditor to establish and hopefully the truth of the matter will come out.
Council might well have written a Collateralised Debt Obligation (CDO) Final Report but to Peter Bernard CDOs are still unfinished business.