Revealed: the credit card spending that was to be kept secret

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Thousands of dollars in repayments for purchases on a WCC corporate credit card were kept from ratepayers. Image: Nlighten.

Carol Altmann – The Terrier

Now for the bits you were not supposed to see.

I intended to run this piece last night, but with the sudden resignation of Warrnambool City Council’s tourism chief, David McMahon, it had to wait, but now is actually the perfect timing.

Why? Because with Mr McMahon’s departure, the CEO Peter B. Schneider hopes this whole credit card scandal will all go away: “move on everybody, show’s over”.

This is not the end of the matter, but only the beginning.

This was not about claiming a scalp, but exposing a systemic problem that still exists: close ranks, pull up the drawbridge and tell the ratepayers nothing but gobbledegook.

We still don’t know why Mr McMahon resigned, but the context of his resignation is there for all to see in the stories on The Terrier.

This story will add even more meat to those bones, because it reveals some of the thousands of dollars in repayments made on Mr McMahon’s credit card that were kept secret.

These $4200 in repayments for dinners, drinks, room hire, car detailing, car washing, accommodation, gift vouchers and travel, were made after I lodged a Freedom of Information application with the council on October 30 last year.

But all details of these purchases and repayments were removed by the council from the FOI documents before they were finally released in June this year.

In other words, they were covered up.

You – the public – were never supposed to know about them and I find that scandalous.

 

But blessed be the public, because it is the public that has helped drag this crucial information into the light, including, I can tell you, almost $300 spent on food and beers at the Warrnambool Hotel for a Surfside caravan park “meeting” that finished near midnight.

The fact the bill was secretly repaid makes me suspect that there was no such “meeting” and yet Mr McMahon kept his job.

I know, here we go again right?

The “missing” receipt for an almost $300 dinner at the Hotel Warrnambool, which finished close to midnight. The dinner was described as a Surfside caravan park meeting.

I fought for months to have these “missing” transactions revealed, because I could see the game that was being played by the WCC and it was a game designed to avoid embarrassment and public scrutiny.

If someone has to secretly repay thousands of dollars in unauthorised credit card payments, we have a problem, Houston.

In the end, if I wanted to access these crucial missing bits, I would need to lodge a fresh FOI and start all over again. And if the council again refused to play ball, I could lodge an appeal.

And so it would go on and on, grinding through a process that is supposed to be about “freedom of information”, but is often the exact opposite.

It can take a lot of time, and a lot of money, but thanks to the Terrier Tip Jar, I was ready to gird my loins for another round….

And then the cavalry –  sources on horses – arrived and busted a hole right through that stone wall of secrecy.

Thanks to those rolled gold sources, I have a solid chunk of that missing information, but not all of it. The total repayments, I believe, were between $5000 and $6000.

What I do have, however, adds to the big picture and, for ratepayers, it is not pretty.

It is a picture of a system that allowed unauthorised spending to pass through, undetected, for more than a year until the whopping $1600 meals and drinks bill from the Cape Schanck tourism conference turned up on a statement.

Questions were asked in September by someone in council’s finance department about this bill.

But it wasn’t until November, and after my FOI was lodged in October, that the repayments were made.

I can’t help but wonder what would have happened if I had not lodged the FOI.

 

Because what this investigation has also uncovered is the thousands of dollars of ratepayers’ money spent on food, drinks, travel and endless coffees that was signed off as being acceptable.

This is despite there being a string of unitemised or missing receipts and very little explanation or justification, which meant fake meetings, like the one claimed for the $172.50 Bojangles meal last May, could pass through.

Has this happened with other credit cards – the council has 81 in circulation – and what has been done to stop it?

 

The “missing” room hire at Lady Bay resort at a cost of $736.50. It was the second such room hire in a week, totalling more than $1000. No explanation has been provided.

Before Mr McMahon resigned, I asked the council this simple question:

“Why was there no requirement for Mr McMahon to record the specific purpose of gatherings paid for by council, including room hire, meals and drinks, who attended, and the potential outcomes, if any?”

I received no reply.

 

I also plucked out just one example of the spending – two room hires at the Lady Bay Resort, both within the first week of September last year which, together, cost ratepayers more than $1100.

This was my question to the council a week ago:

What events were held in these room hires (and) why did the council not use WCC spaces for these events?

It’s another simple question, but I received no reply.

My suspicion is that nobody knows.

 

This all comes, of course, as the WCC has moved to raise rates above the cap for the next two years because it is suffering hard financial times.

And that is what makes all of this such a bitter pill to swallow.

And that is why I will continue to pursue this story.

The repayment list so far is below.

Approx date            Purchase                                          Cost

24.04.17                     V Line ticket (Melbourne)                $88

5.07.17                       Pickled Pig restaurant                       $290

24.07.17                     Mr Magic car wash                            $20.30

18.09.17                     Mr Magic car wash                            $18.30

2.10.17                       Mr Magic car wash                            $20.30

3.01.18                       Mr Magic car wash                            $16.30

13.02.18                     Mr Magic car wash                            $18.30

20.03.18                     Mr Magic car wash                            $18.30

4.05.18                       Taxi Warrnambool                            $21.84

22.06.18                     Citadines Melbourne- accom          $166.65

16.07.18                     Bohemia Café                                      $9.80

25.07.18                     Apartments of Melbourne – meals  $75.00

2.08.18                       RACV Cape Schanck meals/drinks  $1633.50

10.08.18                     Mr Magic car wash                            $18.35

13.08.18                     Unidentified transport transaction $126.60

16.08.18                     Full car detail                                       $275

28.08.18                     W’bool Hotel dinner                          $287.30

10.09.18                     Room hire @ Lady Bay Resort         $736.50

12.09.18                     Logan’s Beach Spa 4 gift vouchers   $360

Total:                                                                                         $4200.34

Terrier Tip Jar

6 thoughts on “Revealed: the credit card spending that was to be kept secret”

  1. A lot of car washing, are they related to the purchase of cleaning products for the mini-van or whatever that vehicle was? A lot of untidy srivong gling on.

  2. So the Standard have just posted an article online. https://www.standard.net.au/story/6278352/city-chief-says-review-of-all-81-council-cards-underway/?cs=12

    I was interested to read the following statement by Cr Anderson.

    **********
    Warrnambool councillor Rob Anderson said councillors were involved in strategic matters, not operational.

    “We were advised when it happened and the money paid back, but the day-to-day running of the council and staff is not directed by councillors,” he said.

    “That is operational, which comes under the CEO.”
    **********

    “This is operational.” You must be joking? You Cr. Anderson are responsible. You are elected. You can not hide behind the facade that the matters at hand are operational. Corporate Governance 101 insists risk management is a key responsibility and duty of decision makers, which you clearly are.

    Ensuring appropriate internal controls exists is enshrined in the notion of risk management. You and you colleagues cannot abdicate your responsibilities. You must set the expectations. You must insist on appropriate behaviors. And you must ensure appropriate oversight and accountability exists.

    To say this is operational is a cop out. This happened on your watch. You and your colleagues are accountable. And your reputations are in tatters. Sadly, no one will trust any of you again.

    That aside. What the hell was the former CEO doing. What was Mr McMahon’s supervisor thinking approving all this expenditure. Does this suggest some collusion. Another job for The Terrier.

    Surely IBAC must now step in.

    1. The more I think about this episode the angrier I get. And the more I start to ask myself questions.

      What was management doing to stop this from happening? Did the finance department bring this to the attention of management? If so, why wasn’t anything done? Was someone other than Mr McMahon and his supervisor reviewing transactions? Should the auditors picked this up?

      The behavior and misuse of credit cards has been allowed to occur. No question. It just stinks. Either management have been asleep at the wheel or they have let it happened. Sure Mr McMahon may have done the wrong thing. But I have no doubt in my mind management new this was occurring.

      The real question is why did management let this happen? No internal review can be impartial enough to answer this. This is solely a job for IBAC. And if management didn’t know this was happening why not?

      They say a fish rots from the head down. And whilst the head (ex CEO) has been removed there’s plenty of rot left in WCC that needs attention.

      What now needs to happen is a clean sweep of management. This is very clear. If the Council wants to restore public trust (clearly there is none) that is the only solution.

      Someone other the Mr McMahon needs to pay the price. And that someone is management. It’s obvious he was not alone in all of this.

  3. For years, the Standard was happy to write about the 4 to 3 block at council meetings yet this serious piece of news only managed a page 3 airing, and then it was only after the offender resigned. I think it says something about the relationship of the local newspaper with local government.

    When I saw a receipt for local accommodation to the value of $730, a thought immediately popped into my head about Craig Thompson of the Gillard Government. That’s not to say the description was used for that purpose but it may in fact be a ruse? That is why detail is important in these matters. It leaves nothing to the imagination and mitigates misinformation. With 81 cards in circulation and a 5% possibility of other misuse, that leaves 3 to go.

    What a time for Peter Schneider, being handed a poisoned chalice with a smile and a handshake, accompanied by much exclamation I would imagine. I hope he is coping with his ‘baptism of fire.’ Here is Mr Scneider’s chance to take positive action by sweeping the floor and truly engage in transparency and ‘good governance,’ a cliche often used in the recent past by some of the councillors, or, he can accept the lower standards and make himself a hybrid of the then and now.

    1. Unfortunately, our new CEO appears to be continuing with the ‘nothing to see here, move along please’ strategy so popular with politicians and bureaucrats around the world. But, like the swan gliding gracefully across the pond, he is probably paddling wildly below the surface trying to avoid being noticed by the Local Government Inspectorate, the Victorian Ombudsman or, worst of all, Independent Broad-based Anti-corruption Commission.

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