Carol Altmann – The Terrier

This is the smoking gun.

I was going to publish this piece tomorrow night to give the Warrnambool City Council and its tourism chief David McMahon time to respond to questions I sent this morning, but given the events of this afternoon – Mr McMahon’s resignation – I am bringing it forward.

Tonight is when all the pieces of the credit card scandal around Mr McMahon come together and it explains why Mr McMahon’s position became untenable.

Because what follows is not a story about mistakes or misunderstandings, but deliberate concealment.

 

And it worked because, until right now, the truth was concealed.

Here is what happened:

On the night of Thursday, 31 May last year, Mr McMahon and a group of four people, including two other council staff, ate and drank at Bojangles restaurant in Liebig St.

There was a couple of pizzas, there was plenty of wine, there was even one or two shots, and lots of laughs.

At the end of the night, the waiter brought the bill and Mr McMahon pulled out his council corporate card, as he had done so many times before, and whacked the $172.50 on the WCC account.

The crew then made their way home, but neither the original bill nor the receipt from that night made it to the council.

Instead, someone returned to Bojangles later and secured a hand-written, unitemised receipt dated 4 June 2018 – four days after the meal.

It showed nothing but a Bojangles stamp, Mr McMahon’s name, the word “Meals” and the total of $172.50.

In his record to council, Mr McMahon submitted this receipt and put the meal down to “VEAC meeting” – the council’s tourism advisory group – but this knees-up was nothing to do with VEAC.

The two members of the public at the table had nothing to do with VEAC. The two other council staff had nothing to do with VEAC.

This was not a VEAC meeting, but a little private party held after “Beers and Ideas” finished across the road at The Loft, which is where they had wandered from.

 

Did the two members of the public in the group know they were being shouted by ratepayers? Probably not. Did either of the two other council staff know? Maybe.

But Mr McMahon knew.

Such was the slack scrutiny of his spending, the hand-written, unitemised receipt made it through. No questions asked.

 

At the time, Mr McMahon, from Ballarat, had worked for the Warrnambool City Council for about two years and had held a council corporate credit card for around 15 months.

The picture I have built from this 12-month investigation shows the rot with this card started early and it rolled on for 18 months, with non-itemised receipts, missing receipts, vague stat decs, claims for committee meetings that never happened, unauthorised drinks, lunches, dinners, and paying for hundreds of dollars worth of booze at a Cape Schanck conference which, at last, was the red thread that blew the whole thing right open.

Because people like this – I have reported on them before – always go a step too far: there is always one receipt, or maybe two, that sets the red light flashing.

As a journalist, you then pull this thread, using Freedom of Information, solid, brave sources and hours and hours of mind-bending slog, and it all unravels: the dirty tricks are exposed and the game is up.

Except to hard-working ratepayers, this is far from a game.

And for all of the ethical, hard-working staff at the Warrnambool City Council, this is not a game. They are as angry as we are.

 

It is shocking and painful and infuriating to learn that the very systems we believed would protect us from this sort of excess and breach of trust, have failed us.

Mr McMahon has failed us. His superiors in upper level management have failed us. The boys’ club culture of the WCC has failed us.

Those councillors who have still not asked one question or raised one concern about the potential misuse of council funds including this credit card – and that is every current councillor apart from Cr Peter Hulin – have failed us.

Even the new CEO, Mr Peter B Schneider, has not said one word publicly about this scandal which has now moved into the red zone. Indeed at his briefing of staff today about Mr McMahon’s resignation, he spoke glowingly of Mr McMahon and dismissed the credit card scandal as one contained to “social media”.

Nobody in charge has been on our side.

 

And so it has been up to The Terrier, with limited resources but multiple, brave sources, to expose the fatal combination of a long-standing toxic culture and weak systems of accountability within the WCC that allowed this rot to happen.

Remember, we were not supposed to know about any of this. We still don’t know it all, but I am sticking with what I can prove.

We were not supposed to know about the dodgy receipts, or about the thousands of dollars that had been repaid, or that Mr McMahon’s credit card was suspended, and then reinstated soon after.

We didn’t even know that the council has 81 corporate credit cards.

Despite this huge number of cards, it was only in November last year, after the Cape Schanck booze up in July and my lodging an FOI in October, that the WCC updated its credit card policy and travel policy to exclude alcohol.

We are still not allowed to see these policies.

While the council says it is now- finally – reviewing its credit card rules in light of the recent report by the Victorian Auditor General into fraud and corruption control, it is clear that the bunker mentality that developed around former CEO Bruce Anson remains firmly in place.

If we ask too many questions –  whether we are journalists, ratepayers, councillors, or council employees – we are dismissed as irritating troublemakers and, it is hoped, intimidated into silence.

 

In my case, the council spent more time and energy trying to uncover my sources than it did investigating the issues.

And in this case, the council charged almost $200 for the FOI application and it took nine exhausting months of wrangling, by which time a lot of Mr McMahon’s unauthorised spending had been repaid (although not the Bojangles bill from May).

When the receipts were finally released under FOI in June, these repayments had been removed as “irrelevant”.

This is how deep coverups work, and they happen when image management is considered far more important than transparency.

In that world, ratepayers sit at the very bottom of the pile.

This has to change.

 

Even Mayor Tony Herbert, elected to represent the people, took to Facebook in February to attack my wasting of council time and resources on FOI applications that, he raged, had exposed no “foul play”.

“All you seem to want to do is tear people down, with unresearched accusations,” he thundered.

“Can I ask which investigations and stories have uncovered foul play? Which ones?”

Mr Herbert has since been swept up in Mr McMahon’s vortex.

What happens next? Well, I have now written five stories and have sent them all off to IBAC (Independent Broad-based Anti Corruption Commission). Who knows if anything will come of that.

Mr McMahon as of today no longer works for the council.

I am just glad that you now know the truth.

 

Thankyou to the many courageous souls who were a part of this long investigation and who trusted me and helped me to turn over rocks to see what crawled out. It has been mind-blowing.

But it doesn’t end here. In fact, it is just the beginning.

If you want to see greater accountability and true transparency at WCC, write to the six silent councillors below, write to Mr Schneider (PSchneider@warrnambool.vic.gov.au), and remember all of this when the council elections roll around in November next year.

We deserve so much better and it is time to demand it.

(Neither the WCC spokesman or Mr McMahon responded to my questions from this morning).

randerson@warrnambool.vic.gov.au,
scassidy@warrnambool.vic.gov.au,
dowen@warrnambool.vic.gov.au,
mneoh@warrnambool.vic.gov.au,
kgaston@warrnambool.vic.gov.au
therbert@warrnambool.vic.gov.au

On we go.

Thankyou so very much to those who have supported The Terrier with a contribution to the Tip Jar: this investigation would not have happened without the Tip Jar. You can be part of it by clicking below.

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Carol Altmann – The Terrier

Yet another layer has been added to the Warrnambool City Council credit card scandal, and this time it involves former CEO Bruce Anson.

You are not supposed to know this, but Mr Anson and tourism manager David McMahon last year spent $185 on a lunch, paid for by ratepayers via Mr McMahon’s credit card.

The lunch at the Pavilion on Tuesday 9 January was – it appears  – also attended by others, but who was there and why, remains a mystery.

The place was very public, but the public didn’t know that it was paying the bill.

That was kept under wraps. Until now.

The lunch receipt, with bits removed, was included in documents released after nine months and almost $200 in fees via Freedom of Information which has blown open thousands of dollars spent on Mr McMahon’s credit card on meals, coffees and drinks over 18 months.

I am starting to wonder if there was anyone within the upper levels of council who didn’t eat or drink with Mr McMahon at some point.

In this case, Mr McMahon wrote on the Pavilion receipt “Lunch with” but the council removed what followed because it was consider “not relevant”.

What I have since learned is that this lunch was with Mr Anson.

That is not relevant? Are you kidding me?

 

When the person at the table is the CEO of the council that is subject to a FOI application to scrutinise credit card expenditure, it is absolutely relevant.

Just ask the Victorian Auditor General who recently wrote an entire report on this very thing and exposed major flaws at Strathbogie Shire Council, which led to the resignation earlier this month of its CEO.

Mr Anson retired from the council in January this year.

Maybe the council FOI officer – who decides these things – thought because Mr Anson was now retired, he should be treated as a private citizen.

Sorry, but that just doesn’t wash.

Mr Anson was still CEO when the lunch happened and he was still CEO when the FOI into the credit card usage was lodged last October.

The big question is: what is there to hide?

What I want to know, as I am sure you do too, is why Mr Anson and Mr McMahon were having a $185 lunch on us, who was there, and did we get value for money in return for a spread including calamari and a grazing board?

(I asked the council these questions yesterday morning and it replied at 5.29pm tonight, not with the answers, but asking for a copy of the receipt I am referring to.)

The only reason I can see for Mr Anson’s details being removed is to avoid these exact questions.

I also want to know why Mr McMahon’s credit card was used to pay for the lunch and not Mr Anson’s? 

This is also important.

As was pointed out by a savvy reader (thankyou, Adrian), in business, the most senior person at the table usually pays the bill. Why?

Because it stops a senior person from hiding their credit card expenditure behind a more junior person.

It also stops potential collusion (ie. you pick up the bill on your credit card and I will sign off on it).

I am not suggesting for one minute that this has happened here, but it exposes – yet again – the way things have operated within the WCC when it came to the use of corporate credit cards.

We have already seen how loose that goose has been with Mayor Tony Herbert and Cr David Owen being caught up in hundreds of dollars worth of breakfasts paid for by Mr McMahon’s card.

And now we have the former CEO himself making at least a cameo appearance in the rot.

This cameo might explain why when I lodged an FOI for Mr Anson’s credit card usage several years ago, only a sprinkling of transactions showed up.

Things were being paid for by other means.

I have to tell you, the council fought tooth and nail to have chunks of information removed from this current credit card FOI before it was released.

One of the reasons given was because some of the bills had been repaid, they believed it no longer mattered: “move along, nothing to see here…”

As we know, Terriers don’t give up that easily.

 

I also fought tooth and nail, all the way to the Office of the Victorian Information Commissioner, to have these receipts included.

Why? Because the amounts could have been repaid after I lodged my FOI, to avoid public embarrassment.

And even if they were paid before I lodged my FOI, I believe the public still has a right to know what had gone on and why.

I now know that between $5000 and $6000 was repaid, but, as it stands, the council has still not released the missing receipts.

Under the rules, if I want those missing bits, I have to lodge another FOI.

And if I don’t get them a second time around, I can ask for a review via the commissioner.

It is exhausting and expensive and enough to make you give up.

But we don’t, do we? No, we don’t.

I have two more stories to come.

Again, I want to say that this is the Terrier Tip Jar at work. Every cent you throw into the jar goes toward fighting for transparency and the occasional packet of Panadol. If you would like to be a part of it, you can find the Tip Jar here.

 

Carol Altmann – The Terrier

Tonight I start drilling into the detail of that big fat spending on one Warrnambool City Council corporate credit card and who is supposed to be keeping an eye on things.

Because, as it turns out, three of the people who are supposed to be keeping an eye on things have also been sitting at the very tables where the breakfasts and brunches have been served.

This includes Mayor Tony Herbert.

And it includes City Growth Manager Andrew Paton, who is designated to scrutinise and authorise spending on the credit card held by Visitor Economy Manager David McMahon.

Both of these people – Mayor Herbert and Mr Paton – are on a council tourism committee (VEAC) with Mr McMahon, with Cr Herbert as co-chair.

Cr David Owen was also on the committee.

As a result of Freedom of Information and cross-checking, I can tell you that this committee held every single one of its meetings in 2017 and 2018 over breakfast at either a café or restaurant.

And, you guessed it, each time the bill was paid with Mr McMahon’s credit card.

 

And each time that bill was well over $100: a $165 breakfast at the Pavilion, a $161 breakfast at the Mid City Motel, a $133 breakfast at Brightbird, another $112 meeting at Brightbird…

VEAC is the only committee of the council’s seven advisory committees to do this.

All the other committees hold their meetings in council offices, probably under harsh lights and over a packet of assorted creams.

But wait, there’s more. There always is.

According to the documents released through FOI, Mr McMahon also wrote “VEAC” on a string of receipts that have nothing to do with VEAC’s official meetings.

In terms of accountability, this is the most worrisome. 

 

When VEAC meets, it has to take minutes and these minutes are reported to council: those are the rules set out in its terms of reference.

Yet Mr McMahon’s receipts show claims for a string of “VEAC” breakfasts and brunches for which there are no minutes, or any public record at all that I could find.

Perhaps this is because most of these meals were enjoyed in the summer holiday period and so maybe everyone was wearing shorts and nobody had a pen.

As a result, we have no idea why the gathering was held, who was there, or what was discussed.

 

These five summer gatherings included:

a $154 breakfast at Main Beach Kiosk on 21 December 2017,

a $51 lunch at The Pavilion on Wednesday 3 January 2018;

$13 spent at Fishtales on Saturday 6 January 2018;

an $80.50 brunch at The Pavilion on Friday 12 January 2018 and;

a $102 breakfast at Clovelly Restaurant on Thursday 15 February 2018.

Boy, that is one very enthusiastic committee, which it isn’t, because it recently fell over and pretty much had to start again, but that is another story.

Of the above, one receipt in particular leaps off the page: the $80.50 spent at The Pavilion on 12 January 2018.

This $80.50 brunch was held during school holidays and included a kid’s pancake and two milkshakes: one caramel, one banana. In the absence of any further explanation, make of that what you will.

For other meals, there was no itemised receipt at all.

 

Despite this, all of the receipts were approved, so you and I and every other Warrnambool ratepayer picked up the bill.

Mayor Herbert has made much of the council being “transparent” and he loves to use this word when he talks about the council under his watch: it sounds impressive, noble even, but in reality it rings hollow.

As he was committee chair and is the Mayor, I sent Cr Herbert a number of questions 12 days ago about this VEAC spending, including why it was allowed, whether he knew about the “unofficial” meetings, and how it could be justified to ratepayers.

The response from Mayor Herbert has been silence.

The response from the council has been silence.

Welcome to transparency and accountability, Warrnambool City Council style.

 

Only Cr Owen, who as we know is battling cancer, got back to me within 30 minutes of my questions and said he was “mortified” to learn that the meals for the official VEAC meetings had been paid for by ratepayers. He offered to repay his share.

This whole scenario strikes at the heart of what this credit card saga is all about:

Can all of the spending be justified?

Is all of it scrutinised?

As we are talking about public money, these questions apply whether it is a $7 banana milkshake or $600 worth of grazing plates.

It appears at some point that someone raised a red flag, because between $5000 and $6000 was repaid on Mr McMahon’s credit card before this all became public via FOI.

That is a lot of money.  It means either the council’s credit card policy was extremely vague, or it was ignored.

 

We are not supposed to know about the repayments, but I will be writing more about those later.

To be super clear, the big picture here is about that dull word called governance, which is why the Victorian Auditor General’s Office has recently been all over the potential for credit card fraud by council staff.

The CEO of Strathbogie Shire Council resigned earlier this month after the Auditor General exposed credit card problems very similar to those we are seeing here.

And remember, what I am exposing is just one of the 81 credit cards in use at the WCC.

More soon.

In the meantime, I want to thank each of you for supporting The Terrier by either throwing something into The Terrier Tip Jar, which helps pay for FOIs, or sharing my stories on social media, or telling a friend, or liking the FB page…. thankyou. We are keeping the bastards honest.

On we go.

*VEAC is made up of two councillors, two senior WCC staff and five members of the community. I am not naming the community members, as they are not responsible for running the committee. Cr Peter Hulin is the new chair of VEAC and Cr Herbert is co-chair. Its first meeting for 2019 was held in offices at Flagstaff Hill.

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Analysis – Carol Altmann

As anyone who has ever been hired on a contract knows, there is no guarantee you won’t have to compete for your job when that contract ends: except if you happen to be the Chief Executive Officer of the Warrnambool City Council.

As was announced by way of a public notice yesterday (15/8/15) CEO Bruce Anson is set to be reappointed for a third consecutive term on a salary package close to $300,000, although this time it will be for three years from January 2016 rather than the usual four, taking him up to 2019.

All up, Mr Anson will have been CEO for 11 years and employed by the council in various capacities for more than 20 years.

Since Mr Anson took up the CEO’s position in 2008, it has never have been advertised.

While some might argue this gives a council stability, others, like Bluestone, would argue it also stifles any chance of bringing fresh thinking into the council’s top job and ensuring that the city still has the best person in that powerful role.

Mr Anson might well be that person, but surely Warrnambool deserves to be able to throw open the doors and see what other talent might be out there, while also, of course, encouraging Mr Anson to apply.

This happens all the time at the most senior levels of the public service, and at the top level of the higher education sector, so why isn’t it happening here?

The answer is astonishing.

By law, a council can choose to either reappoint its CEO, or re-advertise the position: these two options are always on the table every time a CEO’s contract comes up for renewal.

But Bluestone has learned that the highly secretive review committee that oversees the assessment of the CEO’s performance and recommends what should happen at the end of each contract, has categorically ruled out advertising as an option.

In fact, Bluestone has learned, the performance development review committee says to expect Mr Anson to apply for his own job is an implausible scenario.

The committee also believes that advertising the role would be “a very remote and unlikely possibility” and the only way it could happen is if the council no longer wanted Mr Anson to be in the role.

In other words, under this system, Mr Anson could have a job for life, as long as he wants it.

That is some rare air in today’s world.

The majority of the review committee – made up of Mayor Michael Neoh, Cr Jacinta Ermacora and Cr Kylie Gaston, with Rod Coutts as the independent chair – justifies this approach because, despite what the law says, councils apparently do this all the time: only advertise the CEO’s role if the CEO is leaving.

Maybe they do, but that doesn’t make it right.

Ballarat City Council has this month been grappling with the very same issue, with up to four of the nine councillors in favour of making sure CEO Anthony Schink’s position was advertised.

It wasn’t, and a majority of councillors (although we don’t know how much of a majority) recently voted to sign on Mr Schink on for another three years.

With the way the numbers currently fall at the Warrnambool City Council, the recommendation to reappoint Mr Anson for another three years on around $300,000 a year will also be passed by a narrow majority of 4/3.

It’s great work, if you can get it.