Reclaiming the land of the ‘fair go’ *
In this land of the ‘fair go’ we have always believed that anyone who works hard to earn a dollar has the right to keep that dollar – after taxes. We can use our money for food, shelter and necessities for our family, for transport to find work, down payment on a home, giving our kids a start in life, spoiling our elders, increasing our own prosperity. But what if someone else controls your work contracts, takes your wages and leaves you and your family in shocking poverty? What do you do if they say they’re better money managers than you, that restricting your access to earnings will ensure a nest egg in your old age, and then reveal, at the end of it all, that your account is minimal and they can’t say what happened to your money? Just imagine if more than half your wages was taken as compulsory superannuation deductions, if super funds never publicly accounted for their holdings, and if you got a pittance when you retired. And if, when you demanded answers, they offered you $4000 or less to go away and forget it!
This is the scenario facing thousands of people who, against their will, were taken into control by Aboriginal departments around Australia, and who are now campaigning to get their money back. Tonight I’d like to share with you my thoughts on this struggle over what we call the Stolen Wages, and my ideas for how justice might be achieved.
There is little dispute that the original landholders of this nation have been marginalised in our history, subtracted from our economy, isolated from our society, sidelined from political processes. One of the world’s richest cultures, although without written records as we perceive them, even the voices of Indigenous people were stifled by those who assumed the power to speak of and for them.
I think it’s a wonderful irony that it is the written records of these ‘guardians’, amassed in frightening detail through decades of the most meticulous surveillance, that are now bearing witness to the thousands of lives previously submerged in our national consciousness. These records are testament to those long-lost voices which might finally be heard, calling us to account for our past, our present and our future. How we deal now with this resource and this responsibility is of immense importance to our delayed coming of age as a nation.
The removal of thousands of Aboriginal children from their families, the incarceration of thousands of Aboriginal families in government institutions and remote reserves, is the biggest social experiment in our history. The consequent starvation, sickness, scandalous mortality rates, substandard housing, non- or inadequate schooling, and non- or underpaid labour show how that duty of care was exercised. This is the legacy of a century of ‘care and protection’.
Yet the secret and monopoly powers of Native Affairs or Aboriginal Affairs departments of the past endures in the scarcity of documentary evidence in the present. Our misconceptions, fed on political and historical misrepresentations, are difficult to dispel when so many of today’s spokespersons and politicians – who have never read the evidence – not only remain fixated in the rhetoric of past agendas but persuade so many of the public that it is perverse to be critical.
But there is much to be critical about.
In Queensland, into the 1970s, any person of Aboriginal heritage could be declared a ward of state, losing all rights over their own and their children’s lives. A network of police protectors monitored your domestic life and controlled your employment, generating masses of information which was consolidated into files kept on every individual. But there was no way of knowing what was written about you, and these files remained secret into the 1990s.
This state boasted the most efficient system of compulsorily contracted labour and state-controlled wages. From 1904 until the late 1960s the government used this captive labour pool to build and maintain the missions and settlements, and as raw material for the lucratively harvested contract labour market. There is a body of incriminating financial data which clearly shows the massive sums of money earned by generations of Aboriginal workers which did not reach their needy hands. My own intensive research over many years suggests over half a billion dollars in doubt.
In a speech to parliament in May last year, premier Peter Beattie admitted the difficulty of quantifying how much was owed to thousands of workers, although he conceded that I estimated around $500 million. His intention, he said in that speech, was to put forward ‘a realistic and fair offer’ to ‘rectify the wrong’, to ‘bring justice and fairness’ and give Indigenous people ‘what they are entitled to’. If that last phrase didn’t make us nervous, the bit about saving the taxpayers of Queensland millions of dollars in the process, certainly hinted at the plan behind the spin.
The premier acknowledged he’d been told there were 4,000 potential litigants ‘waiting in the wings to sue us’ and he admitted the government had already spent $1.5 million to fight legal challenges – that is, challenges by claimants seeking their own money. Beattie’s idea of a ‘fair offer’ to those who had been trapped in the labour contract system for decades, was either $2000 or $4000, depending on the age of the claimant. Teams from Queensland’s Aboriginal and Islander Legal Service Secretariat, briefed and paid by the state government, visited all communities to advise them of this offer. They told people that legal action by individuals was not only likely to fail, but was prohibitively expensive and could – like Mabo – take twelve years to finalise. This is misleading, to say the least. A test case on Stolen Wages had already been settled after less than two years litigation, and the lawyer acted pro bono.
It is the conditions attached to the Beattie offer which betray the government’s intent to buy its way out of the massive moral, ethical and legal debt it owes these workers. Because payment will only go to those who sign an indemnity relieving the government of any future actions against it on any of the damnable aspects of a century of controls. Almost every one of the estimated 16,500 claimants would be signing this indemnity with no knowledge of their own financial records which are retained by the government, and they would be signing with no knowledge of incriminating evidence regarding government mismanagement. Indeed – as Civil Liberties President Terry O’Gorman has confirmed – they would be signing without independent legal advice as to their own best interests,1 a stunning abuse of a basic tenet of legal rights. Yet such is the desperate poverty, that many will take this pittance nonetheless. It would seem that Beattie’s idea of ‘justice and fairness’ is far different than mine.
I’ve read thousands of letters by, to, and within government personnel covering over 150 years. These politicians and bureaucrats run the show: they own the turf, and they make the rules. More recently, to the detriment of democratic accountability, governments control the spin and keep the media well-fed. And it’s a lonely post, standing on the outside and crying foul. So the best way we can force change or accountability, I think, is to beat them at their own game. We need to check out the current rule book, and use it against them.
So I turned to the law, in particular the law relating to the management of trusts and to fiduciary duty. Fiduciary duty attaches to a person or institution which stands in a position of power over others; it is a legal duty to act for their benefit, a legal duty not to profit from the relationship, a legal duty to provide an accurate accounting for monies held in trust, a legal duty to maintain all documents necessary for such accounting. If there are breaches of that trust, a fiduciary is liable to compensate a beneficiary for loss or damage suffered.
Do we have evidence of breaches of fiduciary duty? Has the government as banker failed to protect the funds it held in trust? Minister Judy Spence has frequently asserted that department accounts were regularly audited and that all remaining savings bank balances were paid to account holders in the 1970s and 1980s. Should we be surprised that this ‘spin’ hides all the interesting details? Like the fact that thumb prints were introduced in 1904 and again in the early 1920s because of widespread fraud on private accounts by both employers and police protectors. In 1932 pilfering from private accounts was found to be common and department supervision was described as ‘totally inadequate’. During the depression years the government simply seized private bank interest, although only on Aboriginal accounts. In the 1940s auditors said there was ‘no system of internal checks’ on wage collections and banking, and withdrawal dockets were marked as witnessed despite the absence of thumb prints. A 1965 public service inspection deplored the lack of a central signature register against which to check ‘signed’ withdrawals and concluded there was no way to authenticate the witnessing of multiple withdrawals. In 1967 it was admitted that lax head office checks on withdrawals, payments and interest allocation allowed ‘room for fraud’. In 1970 auditors were still calling urgently for ‘vital checks’ to be implemented to avoid or deter forgeries. In 1974 – soon after account holders finally got to see a record of transactions on their accounts – the auditor again criticised head office controls as faulty.
As employment broker, the department intercepted all wages, except for a portion of ‘pocket money’ paid to workers during the period of their labour contract and supposedly signed for in pocket money books. For decades the department was warned the system was ineffective; for decades it refused to change it. In 1932 a Report found there was ‘no system of inspection’ and therefore it could be ‘reasonably assumed’ that many workers were not getting this prescribed portion of their wages. In a 1943 survey protectors described the system as a farce and a direct profit to employers. In 1948 the department rejected as ‘too costly’ the auditor’s call for external inspections of pocket money books. In 1956 the department admitted that ‘in many instances’ pocket money probably was not paid after protectors variously reported the system as ‘useless’, ‘futile’ and ‘out of control’, with workers ‘entirely at the mercy’ of employers who concocted the figures which protectors were far too busy to check. Yet this portion of the wages accounted for up to 80 per cent of individual earnings – a massive loss of income.
I – foolishly, as it turned out – thought such evidence, which clearly demonstrated a multitude of breaches of trust and fiduciary laws, would decisively clinch legal action by Aboriginal plaintiffs. But apparently, for successful action, breaches of law must be bolstered by precedents from other relevant cases, and in Australia there are no such cases relating to management of Aboriginal monies, except the one that was settled, and therefore remains confidential.
So where do we turn for justice?
For some time my thoughts have been turning to the United States. Here, since mid-1996, the US federal government has been fighting – and losing – a class action brought on behalf of 300,000 past and present account holders which asserts that monies due to them which were collected and managed by the government, have never been accurately accounted for.2 The funds at stake, like those in Queensland, belong to individuals.
In the Individual Indian Money (IIM) case these funds were generated from the sale or lease of natural resources on Indian lands allotted (by treaties) as reserves. It is estimated that the government amassed billions of dollars during the twentieth century through farming and grazing leases, and sales of timber, oil and gas on Indian reserves. It is alleged there is no way of knowing whether this money was fully disbursed to IIM account holders because the government failed ever, during one hundred years of management, to properly account for the IIM funds it controlled, it failed to prudently manage trust assets, it refused to correct defects in its accounting system, and its accounting of assets was fundamentally flawed and completely ineffective. Consequently billions of dollars remain unaccounted for.3
What parallels can be drawn to the Queensland case? The primary point of difference is the generation of the missing funds: in Australia proprietorship of reserve lands was not ceded by treaty to Aboriginal groups who remain tenants on their own country. However this is not the issue. The US case centers on the mismanagement of private funds by government, as does the Queensland campaign. The funds in question in Queensland are largely those of individual workers whose wages were quantified and collected, and whose savings were withheld, supervised, levied, transferred and invested – and too frequently defrauded and misused – by government agents. Also under question are child endowment and pension payments intercepted by government (since 1943 and 1959 respectively) and only partially distributed to endowees: in 1960, for instance, the department estimated over half a million dollars (today’s value) of settlement pensions went directly to consolidated revenue.
There is no doubt Queensland Aboriginal account holders can pose the same charges as their IIM colleagues: that it is up to the government to provide an accurate accounting of its management of private wages and savings of account holders; that the government must fully account for dealings on Trust funds, that it failed to properly manage Trust assets, that it refused to correct systemic defects in its accounting system, and that its registration of assets was grossly inadequate.
How has the US case fared in the courts? In June 1999 secretary of the Interior Bruce Babbitt admitted that the fiduciary responsibilities of the government to the IIM beneficiaries were not being fulfilled, and his Bureau of Indian Affairs counterpart admitted that the asset management system was faulty. In December that year the court ruled the US government had breached its trust responsibilities to individual trust beneficiaries. A subsequent appeal was rejected: the three-judge panel noted specifically ‘the magnitude of government malfeasance at issue in the case’ and held that the government had an obligation to account for every dollar from the inception of the trust.4
This last point has particular resonance for Queensland claimants, because the IIM class action is mounted on behalf of past as well as present account holders: it has sought, and has been accorded, accountability for financial deprivation enduring across generations. Whereas in Queensland, just to give you the context, only those ‘still alive on 9 May 2002’ (as the brochure so succinctly informs us) are entitled to make a claim. If you worked for forty years and struggled to bring up your family in poverty for all that time, and if you died in poverty in February 2002, your underpaid life and labour remain a financial gain to the state. What was it premier Beattie said about a win for Queensland taxpayers?
In December 1999, in what he described as a ‘stunning victory’ for the Indian plaintiffs, Judge Lambeth ruled that US mismanagement of the IIM trust ‘is far more inexcusable’ than misuse of normal donative trusts because ‘the beneficiaries of this trust did not voluntarily choose to have their lands taken from them’ (and managed by the government), and also, he said, because the plaintiffs were among ‘the poorest people in this nation’. ‘The interests at stake’, acknowledged the Circuit Judge in February 2001, ‘are not merely economic…but personal interests in life and health.’
This applies equally to Queensland. Aboriginal workers did not choose to be controlled by the department, and certainly did not choose for the department to intercept and administer their earnings. There can be no dispute that the great majority of ‘beneficiaries’ of this system were, and still are, trapped in appalling poverty.
Despite a wealth of incriminating evidence from government agents demonstrating official knowledge of enduring negligence, mismanagement and misappropriation, there has never been a proper accounting to Aboriginal people of the savings and associated Trust monies superintended by government during the twentieth century. Instead, the Beattie government offers a pittance to the survivors and demands an indemnity without disclosing the full facts to the claimants. And it uses the full weight of its legal and financial resources to thwart those who are brave enough to take action through the courts.
So that’s one of the issues I’m working on today. The courts have rules and precedents which governments cannot so easily manipulate. I want to take this fight out of the tawdry environment of political spin. I want to put the onus on the government, as financial trustee and as fiduciary, to fully account for its management of Aboriginal monies and Aboriginal lives. I want to use the inspiration and example of the Blackfeet people of Montana as our template to achieve legal justice through court directives that governments must obey.
Because for as long as this historical debt remains unresolved our claims to be the land of the ‘fair go’ will ring hollow.
* This paper is in part adapted from ‘Abuse of Trust: the government as banker in Queensland and in the US’, appearing in the Indigenous Law Bulletin, September 2003.
1 National Indigenous Times, 5.3.03.