DAYS after accepting a role guarding the nation's $60 billion Future Fund, Peter Costello has announced he has a new job with fledgling corporate advisory firm BKK Partners, a role expected to raise questions of conflicts of interest.
Mr Costello said he would advise Australian companies on how to invest, merge and raise capital under the laws he helped establish as federal treasurer, and offer advice on investment and corporate opportunities.
But the new job is expected to spark controversy given the Future Fund has $60 billion invested in assets including property, listed companies including Telstra, and private equity and start-up businesses, any of which could be potential clients of BKK.
In some cases, Mr Costello could find himself with access to information that could have a material impact on the share prices or valuations of companies held by the Future Fund.
A spokeswoman for BKK said the company did not foresee any conflicts of interest arising for Mr Costello.
Mr Costello announced his new job in Melbourne yesterday, less than three weeks after leaving parliament. His new BKK colleagues, chairman Alastair Walton and chief executive Andrew Stuart are both former executives with Goldman Sachs JBWere.
BKK was established in June, the same month Mr Costello announced his retirement.
Mr Walton said he phoned Mr Costello "immediately" and asked him to be part of the new team.
"In keeping with this entrepreneurial spirit, Peter is a full equity partner of the firm," Mr Walton said.
Mr Costello is believed to have been approached to join the new firm through his network of friendships with Liberal stalwarts Michael Yabsley and Michael Kroger, who have strong friendships with Mr Walton. Mr Yabsley attended ANU with Mr Walton.
Mr Walton said he had known Mr Costello for more than 30 years and previously advised him in his role as Treasurer, as a member of the Financial Sector Advisory Council.
Former senator and Labor Party president Stephen Loosely, has also joined BKK as advisory director.
Mr Costello would not say how much his new job would earn him. Mr Walton described it jokingly as "too much".
On Sunday, the Federal Government gave Mr Costello an $87,000 role as a guardian of the Future Fund, which he helped establish to secure the unfunded superannuation of public servants and defence personnel.
The appointment drew a stinging attack from former Labor prime minister Paul Keating, who said Prime Minister Kevin Rudd had a "goody two shoes" approach to former opponents, that Mr Costello was a "policy bum" and that such bipartisan acts were poisoning the honesty of debate.
Mr Costello yesterday said his record spoke for itself, and he disputed the risk to debate.
"I think most people would say there's a danger in excessive partisanship, and I don't think Australian politics lacks partisanship," he said.
Mr Costello said he would not be lobbying government in his job with BKK.
"I'm not a lobbyist and I don't want to be a lobbyist, if I wanted to be a lobbyist I would join a lobbying firm," he said.
Mr Costello also sits on an advisory board for the World Bank.
Frequently Asked Questions about this Article…
Who is Peter Costello and what job did he accept at BKK Partners?
According to the article, Peter Costello — the former federal treasurer who helped establish the Future Fund — has joined fledgling corporate advisory firm BKK Partners as a full equity partner. He will advise Australian companies on investing, mergers and raising capital. He took the role less than three weeks after leaving parliament.
What is BKK Partners and who runs the firm?
The article says BKK Partners is a new corporate advisory firm established in June. Its chairman Alastair Walton and chief executive Andrew Stuart are former executives with Goldman Sachs/JBWere, and former senator Stephen Loosely has joined as an advisory director.
What will Peter Costello do at BKK Partners and how does that relate to everyday investors?
Costello will advise companies on how to invest, merge and raise capital and offer guidance on corporate and investment opportunities. For everyday investors, that matters because advisory work can influence company decisions and valuations — which in turn can affect share prices of listed companies that investors hold.
Why are conflict-of-interest concerns being raised about Costello’s new role?
The article notes concerns because Costello was recently appointed as a guardian of the $60 billion Future Fund, which holds assets including property, private equity, start-ups and listed companies such as Telstra. Those holdings could potentially be clients of BKK, and Costello could in some cases have access to information that might affect company valuations or share prices.
Could Costello’s role at BKK Partners affect companies held by the Future Fund, like Telstra?
The article points out the Future Fund holds listed companies including Telstra and that, in some cases, Costello could have access to information that might materially affect share prices or valuations. The piece does not present any evidence this has happened — it highlights the potential for concern rather than documented impact.
Has BKK Partners or Costello addressed the potential for conflicts of interest?
Yes. A spokeswoman for BKK told the article the company did not foresee any conflicts of interest arising for Mr Costello. Costello also said he would not be lobbying government in his role and that he does not want to be a lobbyist.
How have other public figures reacted to Costello’s appointments?
The article describes a sharp critique from former Labor prime minister Paul Keating, who said the government’s appointment of Costello as a Future Fund guardian was problematic for debate. Costello defended his record and said excessive partisanship is the real danger. BKK’s Walton also publicly welcomed Costello and joked about his pay.
Should everyday investors be concerned about market effects from this appointment?
The article suggests investors may reasonably watch for potential conflicts because Costello holds roles with both BKK and the Future Fund. It also notes BKK says no conflicts are expected and Costello says he won’t lobby government. Everyday investors should stay informed about any disclosures or developments involving companies they own, but the article does not report any actual market harm to date.
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