TAX BOSS: Fraud allegations strike at the 'heart and values of those who work at the ATO'

A plane seized during the tax fraud arrests. Image: Australian Federal Police

Chris Jordan, the commissioner of the Australian Tax Office (ATO), first became aware that one of his deputies was connected with a massive tax fraud when he got a personal visit from Australian Federal Police commissioner Andrew Colvin.

Colvin came to Jordan’s office on January 11, telling him about the personal relationship between one of the principals they were interested in, Adam Cranston, and his father, deputy commissioner Michael Cranston.

“Commissioner Colvin was clear to me that Michael Cranston was not suspected, and is still not suspected, of being involved in the syndicate and its activities of defrauding the Commonwealth,” Jordan told a Senate budget estimates hearing in Canberra.

Jordon was asked by the police not to intervene, to keep all existing arrangements in place, keeping Cranston in the deputy commissioner position.

“Let me assure you, evidence to date shows that at no time did Michael Cranston directly access taxpayer data systems or access the audit cases under this investigation,” says Jordon.

“And there is no evidence of actual intervention or influence on the audit cases, or of money being refunded, or of tax liability being changed. And no deals were done.”

Ten people have been arrested in connection with an alleged $165 million tax fraud involving Plutus Payroll which allegedly stripped out money meant to be paid to the ATO for tax liabilities.

Cranston, a long-servicing senior executive at the ATO, was issued a court attendance notice for alleged abuse of his position as a public official. He must appear in court on June 13.

His son, Adam, 30, has been charged with conspiracy to defraud. His 24-year-old daughter, Lauren, was also arrested.

Three other senior ATO officers are being investigated by Barbara Deegan, a former Fair Work commissioner, for possible Code of Conduct breaches.

Jordon says the alleged wrongdoing of ATO officers has detracted from the success of the operation, code-named Operation Elbrus, by the ATO, the federal police and the Australian Criminal Intelligence Commission.

“I cannot overstate how much those allegations have struck at the heart and values of those who work at the ATO — and how seriously we are taking these,” he told the Senate committee.

“We are keenly aware that the community must have full trust in us — in our integrity, objectivity and expertise — we cannot do our job effectively without this.”

“When confidence in us is jeopardised, it can impact negatively on taxpayers and on the tax system, and I will do everything in my power to eliminate the risk of that happening.”

However, Jordan says there has been overwhelming support from the community, the tax profession, clients and key stakeholders.

“By far the sentiment expressed to us, to me, has been of confidence in our administration, our ethics, sound judgement and practice,” he says.

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