Westpac Board member Ewen Crouch has resigned from the federal government body that sets the pay of politicians, judges and top bureaucrats as the fall-out from the Austrac banking scandal spreads.
The well-connected corporate lawyer, who also sits on the boards of BlueScope Steel and Corporate Travel Management and is a former chairman of law firm Allens, notified Remuneration Tribunal President John Conde on November 28 of his decision to step down from his part-time role with the organisation.
The move came two days after it was revealed Mr Crouch would not be seeking re-election to the Westpac Board at the company's annual general meeting on December 12 following notice from Austrac that it would pursue the bank over 23 million alleged breaches of anti-money-laundering legislation, including failing to report thousands of financial transactions possibly linked to child exploitation in The Philippines and Southeast Asia. Mr Crouch chaired the Westpac Board's risk and compliance sub-committee.
In a statement to The Canberra Times, the lawyer said he considered it appropriate to "set aside" his position on the tribunal in the light of the allegations.
"The Tribunal is an independent statutory authority primarily responsible for inquiring into and determining the remuneration and allowances paid to holders of public offices, including Austrac and ASIC (Australian Securities and Investments Commission)," Mr Crouch said.
In June, the Tribunal announced a 2 per cent pay increase for public office holders, including parliamentarians, judges, department secretaries and agency heads. As a result, the annual base salary for MPs increased to $211,250.
In its statement of claim against Westpac, Austrac alleges that from November 2013 "Westpac has failed to carry out regular assessments of the risks it may reasonably face that each of the correspondent banking relationships might (inadvertantly or otherwise) involve or facilitate money laundering or financing of terrorism".
The regulator said the amounts involved totaled more than $11.1 billion.
Austrac and Westpac are yet to agree on a statement of facts regarding the alleged breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act, and investigations are ongoing.
In these circumstances, Mr Crouch said, "I have therefore decided it is appropriate to set aside my role with the Remuneration Tribunal at this time".
The explosive allegations against Westpac have already claimed some high-profile scalps. Chief executive Brian Hartzer has resigned and Chairman Lindsay Maxstead has brought forward his retirement to the first half of next year.
More Westpac executives could face fines or disqualification, according to the Australian Prudential Regulation Authority.
APRA chair Wayne Byres told a parliamentary committee hearing th regulator was considering launching proceedings under the Banking Executive Accountability Regime. Senior Westpac managers who failed to meet their legal obligations could be fined or disqualified.
Mr Maxstead pointedly paid tribute to Mr Crouch's "integrity" during his six years and a half years as a Westpac director.
"Ewen's extensive legal experience and commercial knowledge has been invaluable to the board," he said.
In a brief statement, the Tribunal confirmed Mr Crouch submitted his resignation in writing to the Governor-General David Hurley with effect from November 29.