Star Witness Tells Of 'Witch Hunt' Against Former Australian Tax Commissioner

by Mary Swire, Tax-News.com, Hong Kong

22 November 2001

One of the star witnesses in the case against former Australian First Assistant Tax Commissioner dealt the proceedings a body blow earlier this week, when he described the 'witch hunt' targeted against Nick Petroulias during the late 1990's.

Speaking under cross-examiniation, Emmanuel Aivaliotes described the atmosphere at the ATO immediately prior to Mr Petroulias' resignation in 1999, and admitted that he himself had felt agitated, nervous, and unjustly accused of wrongdoing during the original tax office investigation into the Assistant Tax Commissioner's handling of tax effective schemes.

Mr Aivaliotes' house was searched in March 2000, at around the time that charges of defrauding the Commonwealth, and of defrauding the revenue through tax rulings were issued against his former boss, but he has since received an apology from the ATO.

Mr Aivaliotes admitted that the former Assistant Tax Commissioner's attitude had been abrasive during his period in office, and suggested that this had made him some enemies, both within the tax office and outside it, during his campaign to divide tax scheme promoters into 'goodies' and 'baddies'.

And indeed this proved to be the case, as three such suspected 'baddies' issued a stream of complaints to the Tax Commissioner, arguing that Mr Petroulias was victimising them and their clients. However, Mr Aivaliotes told the court that he did not believe that Nick Petroulias had acted wrongly or dishonestly, and added that of the 40 or so tax rulings issued while the latter was in charge of the crackdown, none were subsequently found to be outside the rules.

Michael O'Neill, who stepped in as head of the Strategic Intelligence Analysis Unit after Mr Petroulis resigned, agreed that the atmosphere created by the debacle had been 'poisonous', and said that many people had held a 'get Nick' attitude.

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