SFO victim of criminal intent

Sir Geoffrey Palmer, who set up the Serious Fraud Office in 1989.

Few would have suspected back in May that the gang-related shooting of a little girl - Jhia Te Tua - would lead to the demise of an office in charge of hunting out and punishing the slippery dealings of white-collar criminals.

Yet it was the flurry of action the Government ordered from officials following the shooting of the 2-year-old in Wanganui that led to the decision, announced this week, to disband the Serious Fraud Office and merge it into the police department. What the child's shooting prompted was a clampdown on organised crime.

When in 1989 Prime Minister and Attorney General Geoffrey Palmer announced a Serious Fraud Office was to be set up to fight white-collar offending, he declared it to be "the crime of the future".

The decision came off the back of the 1987 sharemarket crash, and the glut of company collapses and what Palmer described as "dubious entrepreneurial activity" that ensued.

The SFO came into being - vested with special powers beyond those held by any other agency, a brief to poke into places others dare not venture, and staffed by a squad of highly specialised forensics investigators, lawyers and prosecutors.

Now, 17 years later, the Government has decided the SFO is to be disbanded and its role subsumed into a new police-based agency set up to tackle a new crime of the future - organised crime.

The justification seemed to be not that white-collar crime was passe, but rather that other kinds of crime had caught up, and the skills of the SFO were needed to help catch them.

Announcing the decision, police minister Annette King said the decision was simple "common sense" - combining the fraud-buster skills of the SFO with those of the police would make a stronger whole.

"The SFO was a creature of a time when there was a difference between serious fraud and other kinds of crime," she said. "Those involved in organised crime have moved on. We have to move on to keep ahead of these people."

"Organised crime" in the modern age includes cyber crime, identity theft and fraud, money laundering, extortion, blackmail, drug manufacturing - and fraud. It now takes the skills of white-collar crime investigators to get into the details of these types of crime.

What the agency proved, according to justice minister Mark Burton, was "exactly how committed and serious we are". But some have queried whether the Government's promises to stamp out the scourge of gang-related crimes meant it was no longer quite so committed and serious about traditional white-collar crime.

Former director of the SFO Chas Sturt described the move as "an enormous Christmas present for all fraudsters".