The West Australian premier has been caught in state parliament describing issues with gold the Perth Mint sent to China as a "storm in a f***ing tea cup", before acknowledging the mint had not complied with laws in some US states dating back to 1998.
Mark McGowan had just resumed his seat after answering a question from the opposition about the mint's "gold doping" program.
The chief executive of the Perth Mint, Jason Waters, last week acknowledged the program meant "at least some of the gold" supplied to the Shanghai Gold Exchange between 2018 and 2021 did not meet the exchange's strict standards for silver content, despite meeting international standards for 99.99 per cent pure gold.
Before making the comment, Mr McGowan had reiterated the first he knew of the concerns was when they were aired by the ABC's Four Corners program.
"When the issue was identified of the amount of silver in the remaining 0.01 per cent in I think two or three or four gold bars, it was rectified," he said.
"And so therefore all the gold sent to the Shanghai Gold Exchange, I'm advised there's been tonnes since the events in question were identified back in 2021, all of the gold sent there has complied with the unique requirements of the Shanghai Gold Exchange."
"[The issue] came to the attention of the administration, I think in September 2021. The board was informed shortly thereafter in October 2021 and the issue was rectified.
"To the best of my knowledge, and certainly the advice I have and the full review of any of the briefing notes and so forth, I was not informed of the matters."
Another politician then stood and began asking a question as Mr McGowan sat down, but his microphone remained on, capturing the comment.
Speaking quietly to Deputy Premier Roger Cook in the seat next to him, Mr McGowan was heard to say:
"Storm in a f***ing teacup."
Premier apologises for 'private' comment
Mr McGowan later apologised in parliament.
"It's been bought to my attention that during question time a private and confidential comment I made to the deputy premier was picked up by a microphone," he said.
"I apologise if anyone was offended by my language."
"I want to make it clear what I said was in the context of the issue being resolved in 2021 and tonnes of gold being sold to the Shanghai Gold Exchange in the period since then."
Mr McGowan's comment came after he earlier said he had not been briefed on the mint's level of compliance with commodities laws in some US states, after the ABC highlighted the scale of potential breaches, which had not previously been made public.
Documents seen by the ABC show the mint was warned last year it was potentially breaching laws in nearly two dozen states by holding gold for customers in its depository.
It publicly acknowledged "historic non-compliance issues" — with what is known as the Model State Commodity Code — in September last year but did not reveal that the issues dated back nearly 25 years and could affect more than 900 accounts holding hundreds of millions of US dollars' worth of precious metals.
When asked about the issues, Mr McGowan initially started speaking about issues the mint self-reported to Australian regulator AUSTRAC last year.
When asked specifically about the US laws, the premier said: "I'm not briefed on that".
"The exact details I'll get you, but as I understand, when they identified these issues they self-reported themselves and these issues have been in place under successive governments, Liberal governments, Labor governments, all the way back to the 1990s," he said.
Mr McGowan also pointed to $34 million the government had given the mint to upgrade computer systems and hire extra staff to resolve "whatever issues are there".
In a statement, the mint said since self-reporting its concerns with US laws to state-based regulators, it had limited the ability for customers in relevant states to open new accounts and had closed dormant accounts.
But it is not clear what steps, if any, have been taken to make previously existing accounts compliant.
"The Perth Mint became aware of unintended breaches of the MSCC in 2022 which led to self-reporting to relevant authorities," a spokesperson said.
"Since then, the Perth Mint has been proactively engaged with relevant regulators in the applicable US states with the assistance of its professional advisers to remedy any unintended breaches of the MSCC.
"It would be inappropriate to comment any further while the remediation process is underway."
Mint non-compliant under successive governments
Later in parliament, Mr McGowan acknowledged those requirements had applied to the mint since 1998, listing off the governments which had governed the state since that time.
He said the mint had been proactively engaging with the relevant regulators in the applicable US states to remedy an unintended breaches since it was brought to its attention.
"The government was informed about those compliance issues in June 2022 because the minister, minister [Bill] Johnston, asked the Perth Mint CEO to conduct a thorough due diligence review of its compliance obligations in relation to laws and requirements around the world.
"So for 24 years under successive Liberal and Labor governments that compliance did not take place. It was brought to our attention, and we're now working to comply with those matters."
He reiterated comments from the mint that it was confident no US investors had been harmed by the "oversight".
