Monday, May 4, 2009

Paul Sheehan, Tim Johnston, and a holy faith in magic water and magic pills

(Above: Tim Johnston. If you meet this man in some international haven for rich fraudsters, kindly ask him to return home to face the music, or better still, ask him for a six month pack of placebo pills).

It always amazes, and sometimes amuses, when the commentariat, confronted with a catastrophe, turn to government to fix it.

That's the same government which is regularly abused as being useless when put up against the worthy self-regulation of capitalism in all its free market glory. 

And that's the amusing bypath to be explored and considered when reading Paul Sheehan's robust denunciation of Timothy Francis Johnston in Truth almost as sordid as the lies.

Sheehan is celebrating the publication of Peter O'Byrne's book Firepower, which sounds like it should be a fun read, and which exposes the machinations of Johnston and his magic pill.

Sheehan spends a lot of time blaming ASIC, and Austrade, and any other government or judicial body whom he can lay a glove on. And doubtless they all should take a fair share of blame - after all Austrade handed over $394,000 in grants to a fraudster, and deserves to cop a pounding (or better still abolition).

But Sheehan at no point bothers to contemplate the way people chose - through greed and desire - to have faith in a fraudster peddling a magic pill, in much the same way as other fraudsters have peddled magic water.

The pill was supposed to improve gas mileage, and at the same time improve the condition of a vehicle's engine. 

It reminds me of the placebo pill me and my partner invented - after all scientific studies have shown that the placebo effect is effective in at least 27 to 56% of cases. (As always Wikipedia will tell you about placebo, and we invite partnerships for our revolutionary placebo pill. Send a million dollars in unmarked bills now, and we will enroll you in our franchise Health Power).

In other words, there's a mug born every minute of every day, and it turned out that the secret ingredient was nothing more than the compound used in mothballs - a common enough homemade octane booster, guaranteed in the end to load up an engine with carbon deposits and produce poor performance if used long enough (along with the napthalene compound was ferrocene, which causes iron deposits on spark plugs, misfiring and bad acceleration),

How did Johnston get away with peddling this nonsense for so long, and creaming millions off mug punter investors in what was little more than a pyramid scheme of frauds? Here's how, according to Sheehan:

He could never have wreaked the damage he did without the active support of the Australian government, and the passivity of regulators and police.

Johnston had no patents. No intellectual property rights. No scientific evidence. No factories. No prospectus. No audited accounts.

No large export orders. In fact, he had almost no sales. He spoke of a global company but in reality it was a handful of people in an industrial estate in Perth.

Well actually Johnston could have wreaked the damage he did without any help from government - simply because of people's unremitting ability to believe in magic water and magic pills, and because of their undying greed and belief in the magic fix (the same simple faith that keeps business in Lourdes turning over without any patents, property rights, scientific evidence, factories or audited accounts). 

Any kind of holy water or fantastic cure-all is the property of charlatans, and who knows, if you peddle diet tea with enough style and conviction, you might even end up in the inner circle of Cherie Blair (is it any coincidence that Tony Blair converted to Catholicism?)

Johnston's best trick was to get involved in sport, and peddle his wares to petrol heads in Australia. Fiddling with cars is a lead-foot preoccupation in Australia (the commentariat contains any number of petrol heads) and Johnston made the natural hook up by sponsoring basketball teams and South Sydney rugby league club.

This site has sometimes bashed the South Sydney bunnies, and it's largely because they accepted money from Johnston in their bid to re-invent themselves, and gave him a credibility amongst mug punters that he didn't deserve. Even after it became clear it was a scam, co-owner of the bunnies Peter Holmes a Court was still out in the public domain defending Firepower as a corporate entity (and I guess if it's a sponsorship for three million buckaroos over three years, you can see why). For that alone, the club in its new guise deserved to go belly up, the fate reserved for the Sydney Kings basketball team, which descended into bankruptcy because they thought Johnston was offering manna from heaven.

But Johnston didn't stop with those two teams. He had a hand in luring stars to Western Force, the new WA rugby union franchise (and again we're not talking small bikkies, we're talking over a million), and he put up his hand to help stage a WBC light heavyweight title involving Paul "Firepower" Briggs.

And in the way of things, not only did sports stars become symbols and spruikers, a lot of them became investors and did their money. Sport and petrol heads. What a heady petrol sniffing powerful combination as a way to lure suckers to the hook. So it goes.

Now of course Sheehan wants revenge - a kind of wild justice - along with justice, delivered by the hand of federal authorities.

That Tim Johnston has not even been charged with fraud, and extradited, is an indictment on the federal authorities. These are the same federal authorities being given considerably more power and responsibility by the Prime Minister, Kevin Rudd, as he builds a command economy run by Canberra. Based on the evidence presented in Firepower, they are not up to the task.

A command economy? Poor bilious Sheehan. We live in a capitalist system, and inevitably regulators are slow to catch up with the doings of the marketplace. Caveat emptor is always the rule, and if you rely on ATSIC or Austrade for help, by definition you're stuffed. A business plan that somehow relies on government is by definition not a business plan.

I'm feeling particularly capitalist today. If you live by the sword, you die by the sword, and if you view the world through the reverse telescope of greed, you get what you deserve. If you believe in magic water or magic pills, expect some day for your faith to be tested. Severely. Ah capitalism, don't you just love  it. 

Even those who attend Lourdes regularly are allowed by a kindly god to die in the end ...

No comments: