MACQUARIE Group has threatened to sue the federal government if it releases correspondence sought by BusinessDay under freedom of information laws that one of the bank's lobbyists sent to Treasury at the height of the global financial crisis.
In response to a letter notifying Macquarie of the FOI request, the investment bank's general counsel, Michael Herring, wrote to the head of Treasury, Ken Henry, warning that releasing the information would "found an action" for breach of confidence.
"Given the mutual understanding between Macquarie and Treasury that the document was confidential, as recorded on the face of the document, we would regard the disclosure of the document as an unauthorised use of the information and its release would found an action for breach of confidence as set out in section 45 of the FOI Act," Mr Herring wrote.
BusinessDay reported in May that an FOI request to Treasury had identified correspondence sent by Macquarie's government relations lobbyist, Trevor Burns, within hours of the collapse of US investment bank Lehman Brothers in September 2008 that sparked the most critical phase of the financial crisis. With Macquarie's share price under sustained attack from short-selling hedge funds, by early October the government had guaranteed deposits in all local institutions and implemented a wholesale funding guarantee.
Mr Herring's letter to Dr Henry has revealed fresh details about Mr Burns' original correspondence. The letter shows that Macquarie Group was forwarding an email from another Macquarie lobbyist, Kris Neill, to Chris Barrett, the head of Treasurer Wayne Swan's office.
While Mr Herring's letter to Dr Henry argues that the correspondence was confidential because the email was marked as confidential, Mr Murphy's response to BusinessDay's application for the documents confirmed that labelling information as confidential does not immediately make it confidential under the act.
But Mr Murphy who sat in judgment on whether to release the same document he had received in the first instance ruled that the information "was within the context of a mutual understanding that Treasury would treat it as confidential".
He detailed a "longstanding understanding with the Macquarie Group that correspondence sent to me in confidence is received in confidence". Mr Murphy argued in his ruling it was "practice" that correspondence between the parties would be treated as confidential.
Asked at a mediation session in the Administrative Appeals Tribunal (AAT) last week to explain the "longstanding" and "mutual" understanding, lawyers for Treasury undertook to provide an affidavit explaining its special agreement with the bank. Lawyers for Treasury told BusinessDay at the AAT that Macquarie continued to oppose release of the email.
Treasury has twice refused the release of the correspondence to BusinessDay, including in an internal review by Mr Murphy despite him being the recipient of the email in dispute under the FOI.
Lawyers for Treasury argued at the AAT there was no potential for a conflict of interest in Mr Murphy adjudicating on the release of an email of which he was the recipient as he was "not the subject" of the email.
Treasury said it would not release the correspondence because that would prejudice the flow of information to government about the operations of the economy and breach confidentiality.
BusinessDay argued there was a public interest in the release of the email given the ongoing liability to the Australian taxpayer from the wholesale funding guarantee used by banks.
Frequently Asked Questions about this Article…
What is the Macquarie FOI dispute reported by BusinessDay?
The article says Macquarie Group threatened to sue the federal government if it released correspondence sought by BusinessDay under a freedom of information (FOI) request. Macquarie’s general counsel, Michael Herring, warned Treasury head Ken Henry that releasing the material would “found an action” for breach of confidence under section 45 of the FOI Act.
What was in the disputed Treasury email linked to Macquarie?
According to the article, the disputed correspondence was an email sent by Macquarie government relations lobbyist Trevor Burns within hours of the Lehman Brothers collapse in September 2008. The email forwarded a message from another Macquarie lobbyist, Kris Neill, to Chris Barrett, head of Treasurer Wayne Swan’s office.
Why does Macquarie claim the email is confidential under the FOI Act?
Macquarie’s general counsel argued the email was marked confidential and that there was a mutual understanding with Treasury the document would be treated as confidential, so its release would be an unauthorised use and a breach of confidence as set out in section 45 of the FOI Act. The article also notes that merely labelling a document confidential does not automatically make it confidential under the Act.
How did Treasury respond to the FOI request for the Macquarie correspondence?
The article reports Treasury twice refused to release the correspondence, including during an internal review by Mr Murphy. Treasury argued that releasing the email would prejudice the flow of information to government about the economy’s operations and breach confidentiality. Treasury lawyers told the Administrative Appeals Tribunal (AAT) they would provide an affidavit explaining the special agreement with Macquarie.
Who is Mr Murphy and what role did he play in the FOI decision?
The article says Mr Murphy conducted an internal review and ruled that the information was provided in the context of a mutual understanding that Treasury would treat it as confidential. It also notes that Mr Murphy had been the recipient of the same email under dispute and that Treasury lawyers argued he had no conflict of interest because he was “not the subject” of the email.
Why does BusinessDay want the Macquarie–Treasury email released?
BusinessDay argued the email should be released in the public interest, given the ongoing liability to the Australian taxpayer arising from the wholesale funding guarantee that the government used to support banks during the 2008 financial crisis.
How does this dispute connect to the 2008 financial crisis and investor concerns?
The article links the correspondence to the immediate aftermath of Lehman Brothers’ collapse in September 2008, when Macquarie’s share price was under sustained attack from short‑selling hedge funds. By early October 2008 the government had guaranteed deposits and put in place a wholesale funding guarantee—actions investors will recognise as major interventions during that crisis.
What are the broader implications for everyday investors from this FOI and confidentiality issue?
As reported, the dispute highlights a tension between public transparency and confidential industry‑government communications. Treasury says releasing such material could harm the flow of information to government, while media outlets argue transparency is important because of taxpayer exposure from programs like the wholesale funding guarantee. For investors, that trade‑off can affect how much detail about government‑industry interactions becomes publicly available and how past crisis responses are scrutinised.
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