Tim Johnston & The Firepower Saga

I could not keep ignoring this article I stumbled across in the Sydney Morning Herald about Firepower con-man Tim Johnston. Thanks to journo Paul Sheehan for providing a good read on the trials and tribulations of the company that was going to provide fuel relief through a "pill".

It is difficult to exaggerate the scale of the lies, the extent of the damage, the trail of destructive bastardry left behind by Timothy Francis Johnston, who lied to everyone, cheated everyone, and, as you read this, lives in luxury overseas because the Australian authorities are too stupid to charge him with fraud and thus be able to seek his extradition.

Perhaps "inert" is the best word to describe the collective ineffectiveness of the Australian state and federal regulatory authorities which allowed Johnston to run rampant for the past 14 years, stealing at least $100 million in the process. Or bovine. Or lazy. Or complicit. Take your pick. When the authorities eventually rouse themselves on this matter, they will find a paper trail that leads all the way to Moscow.

Since Johnston graduated from St Laurence's College, a Christian Brothers school in Brisbane, he has become an increasingly deluded, reckless, pathological and criminal predator. His exaggerations accumulated until they became a pyramid of lies which became a pyramid of frauds, built on pyramid selling. Almost nobody checked the detail, and there were so many details which would have exposed the lies.

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. The unprecedented scale of this horror story has never been fully understood, and never been available to the public, until today.

Because today is the publication date of a book, Firepower, which lays out the magnitude of this fraud and the depth of its implications. It has to be mandatory reading for the Trade Minister, Simon Crean, and his senior departmental officials. Crean will enjoy the discomfort it brings to his Liberal predecessors in government, but not for long, because Johnston is now his problem.

Firepower must be read by the chief executive officer of the Australian Trade Commission (Austrade), Peter O'Byrne, who could only feel a burning anger and unease as he reads the full extent of his agency's reckless naivety. Anger and unease, too, should be felt by Tony D'Aloisio, the chairman of the Australian Securities and Investments Commission, and the ASIC commissioners, who will read, yet again, that ASIC was slow and passive in the face of large-scale corporate fraud.

Firepower does what the state and federal regulators failed to do.

It is the missing due diligence, the prosecutorial zeal, the big picture. It presents the events that should have animated every agency that came into contact with Johnston and his idiotic narcissism. Instead, the job has been done by Gerard Ryle, a journalist.

Firepower groans with a mass of damning detail, the work of someone who has won 15 awards for investigative journalism, including four Walkley Awards. Ryle has been a Walkley finalist 11 times. He is the news editor of this newspaper.

Four defamation suits were issued against the Herald in 2007 by Johnston and his chief executive after the paper published the first expose. Johnston deployed a squad of lawyers and spin-doctors and created a labyrinth of corporate entities to prevent investors and supporters from seeing that the core of his story, the essence of his business, was just an innocuous brown pill.

The pill, the Firepower, was a fuel additive which Johnston and his numerous supporters claimed increased fuel efficiency and cut pollution. It was going to help the world and make millions for early investors. Nonsense. Firepower was an industrial placebo. At best the pill was worthless and at worst it was corrosive.

The fraud could not have continued for so long, or become so large, had it not been for the crucial intervention of Austrade. Somebody at the trade commission, probably someone junior, failed to make a rudimentary verification of any of the grandiose claims Johnston was making. Austrade took on Firepower as a client, and opened doors to contacts around the world through Australian embassies.

Over time, Firepower received $394,000 in grants under the Export Market Development Grants scheme. A senior Austrade manager, John Finnin, was recruited by Johnston as his chief executive. The senior trade commissioner at the Australian Embassy in Moscow, Gregory Klumov, was recruited to run Firepower's Russian operation. For years, Johnston was able to wrap himself in the credibility of government patronage.

Every prominent person connected with Firepower, and there are many, has been damaged by the association. After the Herald's first expose was published on January 7, 2007, the co-owner of the South Sydney Rabbitohs rugby league club, Peter Holmes a Court, described the piece in a private e-mail as "a largely unprincipled piece of journalism".

Ten months later, when Firepower's credibility was under siege, Holmes a Court still publicly defended Firepower, saying it had met all its obligations to the team. (Such was Johnston's desire to insinuate himself into the circle of South Sydney's other co-owner, Russell Crowe). They were the exception.

After Johnston took over the Sydney Kings basketball team he drove the franchise out of existence.

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.