| Harris singing | Singing | 11+00 |
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| Williams: With a personality as loud as his shirt, Nauru’s president Rene Harris is a colourful leader with a penchant for parties and expensive travel. | 11+11 |
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| This Bad Boy won new friends in Canberra by bailing out John Howard from the Tampa refugee crisis, but after years of misrule by a succession of leaders, his country is on the brink of bankruptcy. |
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| Sen | Sen: I think the economy is going to collapse completely if it hasn’t collapsed already | 11+38 |
| Kennan Super: Kennan Adeang Former President | Kennan: They have dissipated $1.5 billion, Williams: 1.5, billion? Kennan: Billion. Williams: Right, has been dissipated. Kennan: With a B | 11+43 |
| Harris singing | Williams: Elected president only in April, Harris has inherited much of the mess, but it's under his leadership the tiny Pacific nation must change course radically, or be sunk by an economic tsunami. | 11+55 |
| Marlene Super: Marlene Moses Secretary of Health | Marlene: It’s our concern for the future of this country for the future of the children of this country, Something has to be done in order to secure their. If there's nothing done now, nothing will happen to them. They won't have a future. | 12+11 |
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| Interior weight lifting gym | Williams: With 11,000 people on an island just over twice the size of Sydney airport, Nauru is one of the smallest, most remote nations on earth. So it surprised many, when, with little more than guts and ability, Nauru recently won a world weight lifting title, and with it, the glory of hosting a global championship. | 12+47 |
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| It’s the kind of uplifting example the Pacific desperately needs. But lack of funds lost them the event – and revealed just how broke this nation is, that the government can no longer afford to send these would be world beaters off the island. | 13+15 |
| Weightlifter | Weightlifter: We're still lifting, but sort of lifting and going nowhere and can’t do anything about it – except start a revolution. | 13+32 |
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| Williams: But it wasn't always like this. |
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| Archival footage Nauru | Music | 13+47 |
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| Williams: Happy, healthy and wealthy - the Nauru of just a few decades ago was everything the Pacific island paradise could be -- and very much more. |
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| Williams: Its rich deposit of phosphate fertilised the farms of Australia and made Nauruans millionaires -- with free education, health care creating the world’s wealthiest welfare state. | 14+16 |
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| But phosphate would not last forever, and at Nauru’s 1968 independence from Australian administration, a proud founding president spelled out how phosphate royalties would be invested in a special trust fund to keep the money rolling in when the phosphate ran out. | 14+29 |
| Archival President Super: Hammer De Roburt Founding President | De Roburt: I feel very sure of this, the forecast of income in the time when there will be no more phosphate. It compares quite favourably with what is being received today, and this is from the investment of funds which are being invested today. | 14+50 |
| Nauru House, Melbourne | Williams: For years the dream worked. In the 1970s, Nauru House, then Melbourne's tallest building, was the flagship of the trust fund's blue chip share and property portfolio -- a towering testament to everything that could go right for Nauru. And, at its peak, the fund was worth well over a billion dollars, but right next door is an equally potent monument to everything that’s turned sour. | 15+18 |
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| The Southern Cross hotel was a Melbourne icon, until six years ago when Nauru paid 52 million dollars for it - then shut it down. |
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| Queen Victoria hospital, Melbourne | Nauru also lost $12 million dollars when it bought and failed to develop the Queen Victoria hospital site, recently on-sold to be the new BHP-Billiton headquarters. | 15+55 |
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| Williams: While clearly mismanaging some investments, Nauru has also been the victim of bad advice from foreign carpetbaggers, like Australians John Walsh and Adrian Powells, found guilty of attempting to defraud Nauru of 100 million dollars. Sen: I think everybody was in it, many of the consultants who advised them were also part of it, to give them the wrong advice, |
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| Sen | took them, sort of, in a way led them up the garden path into investments which were totally dubious in nature. | 16+32 |
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| Grand Pacific Hotel | Williams: And it's not just Nauru's Australian assets that are now in trouble. Across the Pacific, many of Nauru's properties, like Fiji's Grand Pacific Hotel, have been mothballed. Grand plans for redevelopment condemned like the building itself. |
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| Williams outside Grand Pacific Hotel | Williams: What used to be called the diamond of Fiji is now an embarrassing dud. What’s happened at the Grand Pacific Hotel sums up everything that’s gone wrong with Nauru’s investments. A prime location loaded with potential, it’s been left to rot because the money that should have been spent on redevelopment has either been squandered or stolen. | 17+07 |
| Kennan | Kennan: I would say that our investment funds are now, are merely myths now. Williams: A myth. Kennan: A myth now. Williams: So you think there’s nothing left. Kennan: Nothing left. Williams: It’s very serious. Kennan: Not only serious, but it’s criminal, I think it’s criminal. | 17+29 |
| Sen Super: Tilak Sen Asian Development Bank | Sen: The government has borrowed over a billion dollars from the trust and the Bank of Nauru put together, and so that is where the money has gone. They're running a significant deficit. And there was no revenue sort of coming in at that point in time. And therefore they had to cover the shortfall with borrowings. Now where could they borrow against? The only way to borrow, first was the bank which then went bankrupt because they didn't have enough money to finance. Then the next resort was to go and collateralise, or mortgage the properties of the NPRT and borrow from there. | 17+52 |
| Nauru industry shots | Williams: Back on Nauru, the wreckage of the island's economy is becoming apparent. With government deficits still running at some 44 million dollars a year, against a trust fund balance of just 100 million dollars, Nauru seems to have just a couple of years left before bankruptcy. The exact figures are unknown, but the impact on the islanders is not. David: Picture a sudden reversal in the standard of living, | 18+31 |
| David | where you have blackouts where you have only three hours of power in a 24 hour period, where you have children who cannot go to school sometimes, because their school has been shut down, because there no water there, because their parents know where at home, they have to stay at home where the parents have not been paid for up to a month. Picture a scene where even your hard earned savings cannot be accessed through the Bank of Nauru. | 19+02 |
| Aerial shot | Williams: To make matters worse, Nauruans are starting to fight over what is left of the exhausted interior. | 19+35 |
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| A dispute between the Nauru Phosphate Corporation and landowners over royalties has crippled phosphate production, virtually stopping export revenue. |
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| Plane on tarmac/NZ Prime Minister | Given Nauru's economic crisis, it surprised many when it agreed to host the recent Pacific Islands Forum. | 19+57 |
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| It’s an expensive event - needing an eye for detail - like getting the red carpet out before New Zealand’s prime minister disembarks, or making sure the garland girls don’t ignore her. |
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| Delegates at forum | At the Forum’s opening ceremony delegates sweated it out, waiting for the air-conditioning to be fixed. | 20+23 |
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| Twenty minutes later, Rene Harris received his presidential salute. Clearly enjoying the fruits of office, the recently elected president saw the forum as a chance to show the world that he had the vision to take Nauru forward.. |
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| Williams: Seizing his chance for statesmanship, Harris issued an appeal on behalf of the next generation. | 21+00 |
| Harris gives speech to forum | Harris: My children, your children, they have hope for the forum, because that is all they can cling to. | 21+11 |
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| Williams: The sentiments are noble, but few in his audience would know that were listening to a thug -- a convicted felon. |
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| Harris: May God bless… Thank you. |
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| Williams: Three years ago Harris, along with two of his hood, wielding whipper-snippers, freed a few relatives from Nauru's police lock up. Harris was convicted of serious assault and jail breaking. And there's more. | 21+40 |
| Harris/Report | Foreign Correspondent has obtained this justice ministry report, alleging "grave financial irregularities involving huge amounts in the office accounts of the Nauru Phosphate Corporation, committed by its then chairman, Rene Harris." | 21+57 |
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| In what the report called a "gross violation of corporate norms", Mr. Harris racked up a bill of over $231,000. |
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| Harris interview | Williams: In 1998 there was the Minister of Justice filed a complaint against you for the alleged misappropriation of some $230,000. What is your response to that? | 22+23 |
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| Harris: I’m not aware of misappropriating that amount of money no, not. Williams: Well, they listed in document forms, quite a number of cases that they say was misappropriation of money by you and your family while you were chairman of the NPC. Harris: Well no I’m not aware of those. I'm not. Williams: Could I maybe show you a couple? Harris: Yes. |
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| Copies of documents | Williams: The documents show chairman Harris liked travelling by Concorde. Nearly $18,000 of corporate money was spent to fly him and his wife from London to New York. He used $24,000 of corporate funds as a deposit on a house, here at 3 Cameron Street in Melbourne. | 22+59 |
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| Then there were the regular cash advances he gave himself, his wife and his daughter -- all through the corporation’s account in Melbourne. |
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| Harris interview | Harris: Yes, but that can be accounted for. We could have put money in and given it to her in Melbourne. It’s done every day. | 23+28 |
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| Williams: Not so, according to former Justice Minister, and sitting MP, Tony Audoa. |
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| Audoa | Audoa: That's inappropriate, that is --honestly. Williams: That shouldn’t be done -- if that is the case. Audoa: That is the case, definitely he’s out of line. | 23+39 |
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| Williams: Also detailed were the corporate American Express cards used by Rene and his wife to buy clothes, lingerie and jewellery. |
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| Harris interview | Williams: The money’s come from the corporation for things like clothes and jewellery by your wife over a considerable number of years. Harris: Well if it’s only Amex, yes you would buy jewellery, but you wouldn’t just buy jewellery out of the NPC account. Williams: Well that appears to be what’s happened. Harris: Well…. | 23+58 |
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| Williams: Harris says he's repaid all the money, but after repeated requests, has failed us to provide us with any proof. And senior company sources insist most of the money is still outstanding. | 24+17 |
| Sen | Sen: His personal finances, and what has happened, and the charges against him, would play a key role in how we go forward from here. What I would really like to see -- and which is why we're trying to set up some sort of meeting -- sooner or later we will come to a decision as to whether he's going to change, he's going to make some changes in the government, the way the government operates and the way he or his colleagues in the government operate as far as their personal finances are concerned. | 24+30 |
| Opposition group | Williams: If there is an alternative, this is it -- a nascent opposition formed in the back room of a friend's house, focused on one thing -- why Nauru can longer pay its bills. | 24+59 |
| David | David: We think the government should be coming clean on what the status of our trust funds are, on what the status of our Bank of Nauru is, what is the status of our phosphate industry. Why are our trust funds not able to supplement the income formerly derived from phosphate exports. Why are people not able to access their savings from the Bank of Nauru. | 25+11 |
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| Williams: Calling themselves the visionaries - this group has launched the island’s first news sheet to question their leaders on where the money is going -- but criticism has its costs. |
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| David: When my association with this group came to light with the government I was given a not so subtle warning that my public involvement would not be in the interests of my professional career… Williams: As presidential adviser? David: As the closest adviser to the president, but I think that the time has come when someone has to make a stand for what is in the greater national interest. | 25+44 |
| Nauru | Williams: Many Nauruans would agree. As the money runs out, times are becoming intolerably tough for the living and the dead. | 26+21 |
| Kennan | Kennan: Two of the NPC workers went to refuel the generator at the hospital, and they were shocked to smell the stench there because the morgue was dripping blood outside, and coagulating I guess. Williams: Simply because of the lack of power? Kennan: Yeah. | 26+30 |
| Harris interview | Williams: It was a dreadful situation.Harris: The what ? | 26+59 |
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| Williams: The morgue itself. The morgue where the dead bodies are, you know - it was a graphic situation, a graphic example, if you like, of where the government is just failing to pay its bills. Harris: We don’t have a morgue on Nauru - someone’s exaggerating. You’re getting the wrong end of the stick. |
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| Williams: That’s why we appreciate |