It is the worse kept secret in the business world; that is the impending appointment of former Commonwealth Bank counsel, John O’Sullivan, to head up the corporate regulator.

The optics are not good. CBA to the Australian Securities & Investments Commission via a stint as chairman of Credit Suisse investment bank. As Liberal Party donor and mate of PM Malcolm Turnbull, O’Sullivan has the Opposition crying foul.

This has been one of the most leaked appointments in memory and the press coverage enshrines the culture wars going on in financial media. The Australian and the Australian Financial Review have been deployed by “sources” to soften up public opinion.

How could a CBA executive possibly head up the regulator after Storm Financial, the CBA financial advice and Comminsure scandals and now the biggest blow-up of all, the AUSTRAC money-laundering debacle? With some easy-going press, that’s how.

It is true that O’Sullivan left the bank at the end of 2007, which was virtuous timing as the global financial crisis had not quite hit, nor the retinue of scandals which ensued. Still, not a good look.

The AFR broke the story of the rumour early on June 24 with uncharacteristically straight coverage by the gossip columnist and former Acting President of the Young Liberals, Joe Aston.

“Mr O’Sullivan is currently chairman of Credit Suisse’s local investment bank,” wrote Aston, eschewing his trademark snarky style and noting CBA en passant.

“He was previously General Counsel of the Commonwealth Bank of Australia and a partner at Freehills.

“He was also drawn into the “Utegate” saga that played a part in ending Mr Turnbull’s first stint as Liberal leader. Emails between Mr O’Sullivan and disgraced Treasury official Godwin Grech were released as part of the OzCar investigation (there is no suggestion of wrongdoing by Mr O’Sullivan).”

Over the next couple of months there were a few anodyne mentions of the O’Sullivan rumour in the other business newspaper, The Australian. Nothing critical there. But when the Sydney Morning Herald weighed in on the yarn in late August, Colin Kruger’s CBD column item was followed by this:

“An earlier version of the CBD item “Would they really pick a former Commonwealth Bank exec like John O’Sullivan to head ASIC?” (August 29) referred to an exchange of emails between John O’Sullivan and Godwin Grech relating to the OzCar scheme. The item implied that Mr O’Sullivan had acted dishonestly in his dealings with Mr Grech and Treasury officials concerning the fee payable to credit Suisse for the OzCar scheme, and that as a result Mr O’Sullivan was not fit to be appointed chair of ASIC.

Fairfax Media acknowledges that any such inferences are incorrect and apologises to Mr O’Sullivan for any hurt and embarrassment.”

O’Sullivan is no stranger to successful apologies. This from August 2016:

“Melbourne University Press and journalist Paddy Manning have issued an apology to businessman John O’Sullivan, of Credit Suisse, over mentions of O’Sullivan in the chapter on then-Treasury official Godwin Grech in Manning’s biography of Malcolm Turnbull, Born to Rule. The apology appears in newspapers today; defamation proceedings began in the Federal Court earlier this year.”

There would be no risk of an apology from the top business commentator at The Australian, John Durie, who had this to say on September 20 as speculation of O’Sullivan’s selection mounted.

“The move (to appoint O’Sullivan) would be widely applauded in the business and banking communities, given his strong reputation as a corporate lawyer at Freehills and from 2003 to 2007 as chief counsel for Commonwealth Bank.

“While the bank has had its issues, Mr O’Sullivan left before the GFC when the financial planning scandal peaked and a series of other issues followed.”

While the bank has had its issues …

Issues, issues.

On September 20, the Shadow Treasurer, Chris Bowen, said Labor would not support O’Sullivan’s appointment were it to be formally put forward by the Government.

The irony here is that the appointment of outgoing ASIC chairman Greg Medcraft was not exactly put out to tender either. It was a straight Labor appointment and Medcraft had formally been up to his neck CDOs (Collateralised Debt Obligations … the derivatives which almost caused the world economy to collapse and sparked the GFC) before he joined ASIC.

ASIC has culture issues. It is too close to the big end of town and has proven loath to rock the ship of state and its business shipmates for two decades.

While O’Sullivan’s mooted appointment is not a good look, the “poacher-turned-gamekeeper” element is not necessarily a bad thing.

Graeme Samuel was a banker from the big end of town tribe, through and through, but as chairman of the ACCC muscled up to the establishment in enforcement actions against the likes of packaging magnate Dick Pratt.

Likewise, Tax Office Commissioner Chris Jordan, although at first suspected in some circles of being the “Big Four’s Boy” as he was formerly a partner of KPMG, has been robust. He has grown in the job. Being on the other side and contemplating one’s legacy can gird the loins.

One thing O’Sullivan could do is to dump bonuses. The idea of public servants being paid bonuses is ridiculous. They only encourage the top people at these sorts of institutions to kowtow to the interests of those who hold sway over their “at-risk” pay, ergo the very politicians and business people whose institutions ASIC is supposed to regulate.