Welcome to my new blog where I will be updating you on news about Firepower and about my forthcoming book – Firepower: The Most Spectacular Fraud In Australian History. The book is due out in Australia in May 2009.
The book originated from a newspaper article I wrote for The Sydney Morning Herald in January 2007, raising questions about the validity of a mysterious fuel technology company called Firepower that had suddenly become the biggest sporting sponsor in the country.
Firepower reacted by taking out four lawsuits – two against my newspaper and two against me personally. We fought the lawsuits in the courts for more than 18 months before Firepower’s own lawyers moved to have the company placed into liquidation because of unpaid bills.
But initially everyone from the Australian Prime Minister, John Howard, to the various professional bodies that run sport in Australia, as well as the corporate watchdog, the Australian Securities and Investment Commission, were all seemingly content to adopt the myth that Firepower was a business miracle.
By then, millions of shares in Firepower had been sold to about 1300 enthusiastic investors, including high-profile sports personalities, diplomats, doctors, accountants, and senior media figures.
It took more than 60 newspaper articles over a two-year period to demolish the fairytale, exposing a wobbly financial pyramid and revealing the company’s main product – a fuel pill said to cut fuel consumption and reduce emissions – was little more than the same white tar fumigant used in mothballs.
The story had tentacles that spread around the world; from the Federal Government, to the KGB; from high-flying Australian diplomats, to international arms dealers; from convicted drug dealers, to the Australian Trade Commission.
The full implications are set to send quakes through the business, political and sporting worlds for years to come. The immediate ramifications however saw Federal Court charges brought against those selling the shares.
Firepower caused havoc in each of the sporting teams the company sponsored. It led to the death of the Sydney Kings – the most successful basketball franchise in the country – and it threw the future of the entire National Basketball League into question. Firepower contributed to unrest in the private ownership of the iconic South Sydney Rabbitohs, between Hollywood star Russell Crowe and the businessman Peter Holmes a Court.
The Western Force Super-14 club was fined $150,000 (since reduced) after revelations about secret payments by Firepower to high-profile Wallaby players, and it too faces both an exodus of star players and a financial crisis now that the Firepower dream is dead.
There were many other inquiries along the way … by the tax office, the Department of Foreign Affairs, the West Australian Department of Consumer and Employment Protection, hearings in the Industrial Relations Commission and two separate actions by liquidators.
My stories were eventually followed up nationally and internationally, including by Four Corners and by every major television and newspaper outlet in the country. They led to a worldwide manhunt for Firepower founder Tim Johnston, with the international media dubbing him ‘The Most Wanted Man in Australia’.
The book explains in detail the rise and fall of Tim Johnston, the man behind Firepower. It traces the history of his life through numerous previous frauds and it provides the context that allowed him to pull it off. It portrays a man of many contradictions, not least his preference for studying the Bible while flying first-class on his way to negotiate what turned out to be imaginary multi-million dollar deals.
The book raises serious questions about the corporate regulatory system in Australia – one that allowed Johnston to sell nearly $100 million worth of shares in a British Virgins Islands entity without so much as a prospectus.
It asks why Firepower benefited from such enthusiastic government support, getting huge taxpayer grants, when some of the Firepower-related entities the Federal Government helped promote never even existed. They were simply made up.