On the gravy train, there are always plenty of passengers
Carol Altmann – The Terrier
Here we go again.
One of the big questions that hangs over the whole Warrnambool City Council credit card scandal is how many other cards were being used to eat, drink, and stay awake with endless coffees?
Tonight I can tell you that it does not stop with former tourism manager David McMahon.
In fact, my left rib tells me that we are just getting started.
This is because the council’s secret credit card policy was so slack it allowed some council staff to spend up big on alcohol, food and their almost daily coffee run to Fishtales without fear of retribution.
And that is why we have a receipt like the one above.
It shows that in August last year, another WCC senior staff member attended a conference on the Mornington Peninsula and racked up $368 worth of drinks over two days.
This equals 40% of the total bill.
Toot, toot, all aboard! When there is a gravy train on the move, it is never short of passengers.
Toot! Toot! All aboard the gravy train. This is my adapted version of an original cartoon by Steve Nease (neasecartoons.com) originally published in The Cagle Post, Canada.
The person who racked up this receipt in August was, I believe, at the Cape Schanck conference held in July where more than $1600 was spent on Mr McMahon’s credit card on food and drinks.
This person was also part of a five-day trip to WA with Mr McMahon in October, where the infamous “tackle” was bought after 7pm on a Friday night.
And all of this travelling and boozing was going on behind the scenes while the council prepared its case to raise rates above the cap.
It is like the days of Versailles, with a select group of council insiders enjoying the party, while the majority of people in Warrnambool work their backsides off to make ends meet and are being belted with rate rises, fee rises and fine rises, because the council is going broke.
The credit card spending is just one part of the enormous waste that has gone on for a decade, but it is perhaps the most disgraceful, because it can’t be explained away as a mistake, or a misunderstanding, or from “circumstances beyond our control”.
It is pure greed, aided and abetted by a system that let us down.
Those council staff – and thankfully they are in the minority – who carved into eye fillet steaks, or who ordered another bottle of red, or another round of beers, or another glass of white wine, or a $4 coffee on their $120,000 salary – knew exactly what they were doing and they were allowed to do it, until last October when the shit hit the fan as a result of my FOI application that would eventually expose the whole rort.
It’s not quite up there with the largesse of Louis XIV, but the WCC credit card scandal is exposing a culture of reckless spending and waste that stretches back years.
It doesn’t matter if the money has since been repaid and I don’t know, in this particular case, if it has. (Once again, the council is not answering questions.)
And it doesn’t matter how the council now tries to spin it: it was just one rogue manager, discovered – miraculously – just a month before my FOI, all repaid, all tidied up, a mere blimp, just a “social media” storm…
None of that is true.
What matters it that we are exposing a culture that led us to the financial mess we are in today and for which we are paying dearly.
And all of those behind the rot have to be held accountable, wherever they may be today, including those who have since left Versailles and are now living in Coquenball mansion.
I am waiting to see what happens next with the council’s reporting to the authorities, its investigations and its reviews.
In the meantime, we press on with our own investigations and reporting and reviews.
Thanks to your contributions to the Tip Jar, I today lodged two more FOIs on credit card usage with the council.
The answers may take a long time to come, but it is worth the wait.
Thankyou so very much to those who have supported The Terrier with a contribution to the Tip Jar:this investigation is the Tip Jar at work. You can be part of it by clicking below.
Eye fillet, pork belly and seafood linguine: your rates at work
Carol Altmann – The Terrier
Just a week after the Warrnambool City Council voted to increase rates by 4.5%, I can reveal that ratepayers have footed the bill for thousands of dollars spent on dozens of dinners, lunches and breakfasts racked up on just one corporate credit card, by one council manager.
Freedom of Information documents show the council signed off on at least $6800 in meals, including dishes of eye fillet, seafood linguine, pork belly, softshell crab and tapas plates, paid for with a corporate credit card used by WCC Manager Visitor Economy David McMahon.
This credit card recorded more than $40,000 in spending for the 18 months from February 2017 to the end of October last year, which is when I lodged the FOI. The FOI finally came through in early June.
It shows the corporate credit card was used to cover food and drinks at meetings, gatherings, get-togethers and other social occasions that occurred with eye-popping regularity.
The local venues for these outings have been many and varied and include the Hotel Warrnambool, Graze, Hairy Goat, Fishtales, The Pavilion, Bojangles, Simon’s Waterfront, Mid-City Motel and the Main Beach Kiosk, with the bill often costing more than $150 at a time.
To be clear, Mr McMahon, who is based at Flagstaff Hill, was not spending this money only on himself.
The total credit card bill of more than $40,000 covers a broad range of expenses, from $20 car washes, to groceries bought at service stations, to hardware, a $470 helicopter ride as a competition prize, $434 to hire a function room at the Lady Bay Resort, right up to thousands spent on accommodation and travel.
Receipt for a breakfast meeting held at the Mid City Motel in May last year at a cost of more than $160.
Much of this spending may be perfectly legitimate in the course of conducting normal council business, but for this first story – this is the first of a series – I am focusing on the incessant eating and drinking, which, the council argues, is all part of the job.
Let me give you a few examples, from just one month, May 2018. (You can see the full list at the end of this piece).
On 17 May last year, Mr McMahon’s card was used to pay for a breakfast meeting at the Midcity hotel at a cost of $161.30.
The next day, the card was used for breakfast at Fishtales for $97.10.
A week later, on 27 May, another $57.90 was spent on breakfast at Fishtales and $13.50 at the Main beach kiosk.
Four days after this, on 31 May, another $172.50 was spent on “meals” at Bojangles.
And that is just for May 2018.
Dinner at the Hotel Warrnambool, May 2017, at a cost of $173.
If we wind back to 12 May 2017, we find $173 was spent at Hotel Warrnambool on a dinner that included dishes of eye fillet, pork belly and seafood linguine.
Less than a month later, on 1 June 2017, another $213.60 was spent on more meals at the Hotel Warrnambool that included more dishes of eye fillet, seafood linguine and soft shell crab.
Swing into July 2017 and you will find a neat $546 spent on share plates and tapas at The Hairy Goat on 8 July.
A few weeks later, on 14 August, another $314.50 was spent at the same place, on more share plates and tapas.
Bang, there goes another $1200, and we have no idea why, because the council has provided no details.
And then there are the coffees, the endless coffees: $20 here, $15 there, $48 and $56 other times, and on it goes as ratepayers pick up the tab for coffees on a regular basis.
For example, in March this year, more than $64.20 was spent on coffees in just one day, from two different locations: the Espresso Mobile Café and at Rough Diamond.
You get the picture.
But there is more, because this is not a complete picture.
The credit card statements released exclude a number of transactions removed by the council because they deemed them “not relevant” as someone repaid them.
The council won’t reveal who made these repayments, for which transactions, and why, but I have good information to suggest the total repayments were between $5000-$6000.
This means a further $5000-6000 was spent on this card that should not have been.
Missing: the cost of meals and drinks consumed at a tourism conference last year have been removed from the credit card documents released under FOI.
I can also say that at least one of these missing transactions is for more than $1000 spent on food and drinks at the Cape Schanck RACV resort during a tourism conference last July, which I wrote about earlier this year and which prompted this deeper investigation.
So that’s thousands in spending on meals we know about, and thousands more that was repaid and is now considered secret.
The fact that this sort of thing is going when ratepayers are being asked to pay more because of “tough times” is disgraceful.
And remember that this FOI covers just one credit card, for one council staff member.
There are 81 corporate credit cards in circulation at WCC (elected councillors don’t receive cards).
It is also important to remember that we are not talking about spending by a private business. This is local government, which means this is public money, your money and for which every cent must be accountable.
Receipt for another dinner at the Hotel Warrnambool in June 2017, at a cost of $213.
So who was scrutinising Mr McMahon’s credit card transactions?
The council won’t say exactly, but confirms it must be a line manager, so I would assume this means Mr McMahon’s manager, Director City Growth Andrew Paton, must have signed off on the eye fillets and grazing plates and endless breakfasts and coffees, and considered it all perfectly okay.
Such is the culture that has been allowed to develop within the upper echelons of council over the last decade – a culture of entitlement, with very little public scrutiny.
It is this culture that most ratepayers hoped would end under the new CEO Peter Schneider.
To be honest, I thought that when this FOI came to light, Mr Schneider and the council would rush to explain that these days of excess were long gone, but I was completely wrong.
Instead, the responses to my first questions were a big bowl of corporate, alphabet gloop.
Here is one spoonful, given in answer to one very simple question “how is this justified to ratepayers?”:
“Each authorized (sic) holder of a corporate credit card will perform different roles requiring different stakeholders, different working hours and locations, and therefore different costs of doing business. Some roles may require extensive engagement with business and industry, volunteers, residents, regional engagement and statewide engagement, other roles may not.
“The use of credit cards as a payment mechanism can be of considerable benefit to the Council, ratepayers and the various individuals and organisations that supply goods and services. The benefits are in the form of efficient procurement and reduced administration costs.”
As it happens, the Victorian Auditor General’s Office has just released a report about the potential for corruption and fraud around council corporate credit cards, particularly on spending for meals, travel and petrol. The council says it is taking notice of the recommendations.
I will be writing much more on this particular credit card because there is so much more to tell.
The next instalment is coming soon. In the meantime, here is the full list of dining to digest. See below.
[Thankyou so very much to those who have supported The Terrier with a contribution to the Tip Jar:this story is the Tip Jar at work. You can be part of it here.]
The RACV Cape Schanck resort which hosted the Victorian Tourism Industry Conference last July. Image: RACV/Business Events Mornington Peninsula.
Carol Altmann – The Terrier
The Warrnambool City Council is claiming its budget is tight, yet it spent more than $10,000 to send seven people – including the CEO of the Warrnambool Racing Club – to a tourism conference at a Mornington Peninsula resort last July.
The council has put the total bill for the conference at $9034, including $3934 in accommodation and $4830 in conference fees and only $270 in food.
I have received reliable information, however, that the final cost also included more than $1000 in drinks in the resort’s Lighthouse Lounge and more than $400 on meals and drinks in its cafe.
A council spokesman said “any food /drinks beyond (the $270) would have been settled by the individual(s) themselves as a personal expense”. Perhaps the big drinks bill was repaid, but I have not seen any evidence of that.
Those who attended the conference included now-mayor Tony Herbert, who is chair of the council’s Visitor Economy Advisory Committee, fellow committee member Cr David Owen (both funded their share through their councillor allowance), the council’s head of Visitor Economy, David McMahon, and three other council staff from Visitor Economy.
The final delegate was racing chief Mr Downs, who nominated and was chosen to join the council’s Visitor Economy Advisory Committee when it started in May 2017.
The conference, by the way, included sunset drinks at the St Andrews Beach boutique brewery which has been converted from first class racing stables and was worthy of a tweet from Mr Downs (see below).
There are two things about this story that don’t sit right.
First, as we know, the council is surveying ratepayers right now as part of a process to try and lift rates above the 2.5% cap.
The council is saying that it must save at least $700,000 a year for the next three years and the only two options we have been given are to either cut services, or raise rates.
Given this, what a double-standard – or perhaps a better word is insult – for the council to have sent seven people off to Cape Schanck to learn the latest in tourism trends, funded by an obviously healthy professional development budget.
The issue here is not only the money, but the mindset: while ratepayers have to expect cuts to services like childcare, council networking opportunities can roll on as normal.
Warrnambool Racing Club CEO Peter Downs was among seven Warrnambool City Council delegates at the tourism conference last July. Image: Racing.com
The second unsettling aspect of this story is the inclusion of Mr Downs.
It is no secret that Mr Downs’, as CEO of the WRC, has been a major player in pushing for commercial racehorse training at Levy’s Beach, in the Belfast Coastal Reserve, and lobbying to make sure this happened.
In fact when Mr Downs was chosen for the council committee in 2017, it was just eight months after racehorse training was banned at Levy’s because of concerns raised by Aboriginal Victoria and the push by the WRC to get racehorses back on the beach was in full swing.
This council doesn’t seem overly fussed by potential conflicts of interest around the racehorse training issue, but I would have thought the decision to appoint Mr Downs’ to the visitor economy committee in the first place – given the political context – was questionable.
The issue here is not that Mr Downs has done anything wrong – he is only taking what is offered – but that the council considers all of it acceptable.
On any measure, Mr Downs has been given the sort of out-of-hours access to key members within council that others could only dream of, if they were lobbying in the same manner.
In this case, it has even paid the bill.
A promotional shot of the Cape Schanck Lighthouse Lounge where the WCC delegates spent more than $1000 on drinks across two days. Image: RACV.
According to a lengthy council statement in response to my questions, Mr Downs was chosen for the conference after the council asked for “expressions of interest” from all six community members of its visitor economy committee and only Mr Downs responded.
The statement also says it is appropriate that Mr Downs is on the council committee, because the WRC is a significant player in the local economy and tourism.
Further, the council says, nothing about racehorse training or the Belfast Coastal Reserve Management Plan has been raised in the committee meetings. Nothing at all? Really? What about before the meetings, or after?
By coincidence, the final Belfast Coastal Reserve Management Plan, which said racehorse training should resume, came out during the tourism conference.
Was this hot potato raised during drinks at St Andrews brewery or over dinner at Cape Schanck? We don’t know.
We do know, however, that Cr Tony Herbert – within three days of becoming Mayor on October 29 last year – placed sorting out the racehorse training issue at the very top of his to-do list.
In a nutshell it justifies the conference by saying the council values professional development opportunities, that the funds came out of a professional development budget and that there were several important outcomes, including: a follow-up meeting by VTIC in Warrnambool, a range of new marketing tactics, valuable networking and contacts, and passing on “key learnings” to other staff and councillors.
Worth every cent? I will leave you to decide.
(Mr Downs was contacted for comment last week on this piece. He is yet to respond.)
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