Carol Altmann – The Terrier

I have been thinking about consequences and wondering if there will be any for what unfolded in the last 12 months of the last Warrnambool City Council.

Because while we wait to see if sacked CEO Peter Schneider wins his court case, there are some other potentially illegal dealings that also require attention.

The first is alleged fraud or alleged theft (take your pick) of public money as part of the corporate credit card scandal.

The council confirmed that the credit card misuse involving former tourism manager David McMahon was referred to the police, as recommended by the Ombudsman in her report tabled six months ago.

The police, I can only assume, are now investigating Mr McMahon’s repayment of more than $6000, the doctoring of receipts, and writing fake invoices that saw staff parties at the Lady Bay put down as “room hire” so they would be picked up by the public purse.

Despite leaving messages, I have been unable to get an official update from the detectives involved.

I wonder if charges will be laid, or if there are two sets of rules for so-called white collar and so-called blue collar crime?

Under that form of justice, if you pinch a mixed grill from Woolies, you are charged, but if you misuse thousands of dollars in public funds, you get to pay it back and that’s the end of it.

We shall see.

Second, we have confirmation that four former councillors sought detailed legal advice from the council lawyers, Maddocks, in Melbourne, to work out how to sack Mr Schneider.

This legal advice, as the Supreme Court heard last month, was not approved by the full council.

This is against the law.

Such legal advice normally costs money and is paid for from public funds.

Maddocks sent the council an invoice, but it was withdrawn and never paid.

These are the simple facts, so the question is: does an illegal act by four councillors become legal if the bill is torn up?

Can the former councillors involved – knowing the public was expected to pay the bill – just get away with it?

And, if so, who decided that the invoice would be withdrawn and why?

All of this was referred to the Local Government Inspectorate last year as part of a request for a broader investigation into the sacking of Mr Schneider.

Another spurious decision was also referred to the Inspectorate, which was the re-appointment of acting CEO Vikki King for another five years to her position as manager of Community Services.

Ms King’s contract was due to expire in August last year.

Ms King was appointed acting CEO the night Mr Schneider was sacked on 13 July.

As Acting CEO, Ms King delegated off the authority to re-appoint herself for another five years.

We still don’t know exactly who signed off on Ms King’s reappointment, but I understand it was a casual staff member.

These are the simple facts, so the question is: can a casual worker sign off on a $240,000 a year position and why didn’t a senior manager put their name to it?

The Local Government Inspectorate confirmed last August it has launched an investigation into Mr Schneider’s dismissal, and that investigation is ongoing.

Any details on the scope of the investigation, however, and how it is coming along, are strictly under wraps.

I recently contacted the LGI and the latest update is this:

“The Local Government Inspectorate is investigating a complaint in relation to Warrnambool City Council. This investigation is ongoing.

“The Inspectorate deals with complaints or requests for investigation in strict confidence and does not provide comment on investigations that are yet to be finalised.”

The passing of time does not diminish the importance of these ongoing investigations and the need for either closure or consequences.

Only then will this sorry chapter in our civic history be fully laid to rest.

Carol Altmann – The Terrier

A blue-chip whistleblower on allegations of fraud, corruption and bullying within the Warrnambool City Council has gone public and, in so doing, exposed how broken the system has become.

Dr Bernadette Northeast, who has the sort of credentials and governance experience that most councils would grab with both hands, recently resigned as Volunteer Coordinator from the WCC, having been shafted by the very process meant to encourage people to speak up.

Boy, we live in dark times when this is considered acceptable.

Dr Northeast told me she had compiled a dossier of evidence with the input of six other people – each of whom initially approached her – detailing serious claims of fraud, corruption and bullying within certain sections of council. #notallstaff

The whistleblowers not only detailed claims of wrong doing, but alleged particular senior council staff were fully aware of the allegations and did nothing.

In other words, there was a deliberate cover up.

If you were an investigator looking into a council, this sort of stuff is red hot.

 

Dr Northeast and five of the six other whistleblowers all spoke to the independent investigator hired by the council CEO Peter Schneider to get to the bottom of the scandal, but despite this incredibly brave step, they have heard nothing since.

In the meantime, wait for it, Dr Northeast was put under investigation by the same independent investigator.

Her “crime” was accessing documents she used as part of her evidence gathering, for which she found herself accused of serious gross misconduct.

This is despite the documents apparently being accessible to any council staff member via the intranet.

Dr Northeast, who worked for the council for seven years, was put on paid leave during the investigation, after which she resigned for another job.

During the investigation of Dr Northeast’s conduct and in the months since, she says, there has been no significant action as a result of the whistleblowers coming forward.

Each person identified by the whistleblowers, apart from former tourism chief David McMahon, has remained in their job.

As Dr Northeast says, it appears the investigation has been less focussed on the claims of fraud, corruption and bullying that were allegedly reported to senior staff, and more intent on finding out “who dobbed on us?”

By the way, the allegations not only include the now infamous misuse and abuse of some council corporate credit cards, but also claims of misuse of council accommodation at Flagstaff Hill, misuse of council contracts, purchase of equipment (including air conditioning units) which cannot be traced, and large alcohol purchases via direct invoice.

The whistleblowers also raised concerns about a personal relationship between two council staff members that allegedly led to “tip offs” about the focus of some Freedom of Information applications.

Others expressed their concern at a “boozy” boys’ club culture, summed up by a toga party held at the house of a senior staff member, to which select staff were invited and attended, and talked about for days.

This cosy boys’ club culture is what the vast majority of hard-working and ethical staff at WCC have been struggling with for years.

 

It reminds me of the WCC Christmas party at the Warrnambool racecourse last year, where two employees dropped their pants and ran naked past the finish line in what was apparently some sort of weird WCC tradition. It wasn’t repeated this year.

This sense of entitlement among certain parts of council is what we believed Mr Schneider would blow right open and, to do so, Dr Northeast is exactly the sort of person he should be listening to.

Her CV includes 17 years as an SES volunteer, a Director of South West Healthcare, Chair of Australian Institute of Company Directors Great South Coast Committee, and Deputy Chair of the Victorian Fisheries Authority. Good governance is her bent.

Yet Mr Schneider has not spoken to Dr Northeast about any of these allegations.

Mayor Tony Herbert, who has previously urged staff with any allegations to contact Mr Schneider, apparently told Dr Northeast that he would arrange a meeting with the CEO. She didn’t hear another word. (I have asked Cr Herbert to confirm this).

Dr Northeast then attempted to set up a meeting with Mr Schneider herself, without success, and says even now she remains open to a frank conversation with the CEO.

But Dr Northeast is no longer with the council, having been effectively the target of a concerted push to find any leakers.

A couple of other staff are also on unexplained leave, for what I believe are similar misconduct allegations connected to them attempting to reveal what is going on, not to hide it.

Other experienced staff have resigned in sheer frustration while waiting for a cultural change that never seems to come.

 

If this is how it works at the WCC, something is terribly broken.

This gets to the nub of why Dr Northeast has gone public, because she says the vast majority of council staff who are hard-working, ethical and honest people, are being unfairly maligned by the alleged actions of a few.

“For the sake of the vast majority of all the good people working at the council, this needs to be addressed promptly and openly. Yet we have heard nothing more,” she says.

“How long does this have to go on without direct rectification?”

It is a very good question and here are three more:

Where is the independent investigation up to?

Has the information from Dr Northeast and the six whistleblowers all been passed to the Ombudsman for her separate investigation?

And does the council even still have 81 corporate credit cards in action?

 

I am putting all of this to Mr Schneider for a response which I will run in full.

I have set up a Foxy Fighting Fund. If you would like to be make a small contribution, you can do so below.

The Foxy Fighting Fund

 

Carol Altmann – The Terrier

I very rarely do this in writing, but it’s time to drop the f-bomb.

Fraud.

It is not a word to be used lightly, but there is no doubt it is circling over the credit card scandal engulfing the Warrnambool City Council.

This is how the Victoria Police define fraud: “any deceitful or intentionally dishonest conduct, involving acts or omissions or the making of false statements, orally or in writing, with the objective of obtaining money or other benefit from a person/organisation for him/herself or another”.

Hmm, sounds like we might have a match.

The public response to this scandal is clear: ratepayers don’t want another review that goes nowhere, they want to know if there was fraud and, if so, what is being done about it?

In other words, it’s time to bring in the big guns.

This saga goes well beyond tourism chief David McMahon resigning and moving on, despite the council chiefs working hard to try and contain the fallout.

The CEO and councillors have known about this issue for months, but are now apparently gagged from speaking for legal reasons, which is no doubt a huge relief to those councillors who have not said a word.

I get nervous about speaking up too, but when it comes to backing the public, I would rather drown in a sea of truth than cling to a system designed to keep ratepayers in the dark.

We are still being kept in the dark, because none of what we have been told so far makes any sense.

Things got off to a bad start when CEO Peter Schneider, in telling council staff that Mr McMahon had quit, praised Mr McMahon’s many achievements and wished him well, as you do.

He then explained that the credit card repayments Mr McMahon and former CEO Bruce Anson nutted out over a table last November were work related.

Work related?

Why on earth would Mr McMahon be asked to repay more than $4000 from his own pocket – and possibly up to to $6000 according to my sources – if it was all work related?

And why would Mr McMahon agree?

I don’t know of anyone who would willingly hand over more than $4000 to their boss for work-related expenses.

And why, if everything was just a huge misunderstanding, did Mr McMahon give up his $100,000-plus a year job?

One of those expenses repaid was $736.50 for a “room hire” at the Lady Bay Resort just last September for a “conference” that the council, so far, can’t explain.

Did Mr McMahon accidentally hire a conference room at the Lady Bay? I had a look (see above) and unless you are booking a wedding, the Lady Bay Resort doesn’t have room hire that costs $736.50. The most expensive is $300.

It appears Mr McMahon also inadvertently spent several hundred dollars on drinks at the Cape Schanck resort and more on dinner at the Pickled Pig and also at the Warrnambool Hotel, and mistakenly bought a gift voucher for a full car detail, and gift vouchers for massages at the Logan’s Beach spa resort.

Mr Schneider now says all of this was “work related”, but at the same time, Mr McMahon repaid the cost and has since left his job.

Nothing makes sense and it never does when you’re only getting half the story.

 

Mayor Tony Herbert’s contribution so far is to tell the paper he is “very disappointed” and he could “understand” ratepayers’ “views”.

Views!  Ratepayers are bloody furious, and rightly so.

Because Cr Herbert, who promised to cut costs wherever he could, was there, along with Cr Owen, at the Cape Schanck conference when Mr McMahon shouted hundreds of dollars worth of drinks at the bar.

And Cr Herbert and Cr Owen were both there when Mr McMahon paid for every single VEAC breakfast and brunch.

Cr Herbert, you need to be so, so much more than “disappointed”.

And then we have the ratepayers’ money that hasn’t been repaid, but should have been.

There are at least seven occasions where Mr McMahon claimed food bills for VEAC meetings that were not official VEAC meetings, including the $172.50 “smoking gun” dinner at Bojangles on 31 May last year.

City Growth Manager Andrew Paton was Mr McMahon’s boss and a member of VEAC.

Mr Paton was also, ultimately, responsible for authorising Mr McMahon’s credit card spending.

Did Mr Paton not notice the bills for at least seven VEAC meetings that were not actually VEAC meetings? And if not, why not?

And to really hammer home the point, Mr McMahon – at Bojangles on 31 May last year – knowingly used ratepayers’ money to pay $172.50 for food and drinks that had nothing to do with council business.

And he lied on the council records.  And he organised for a receipt to replace the original.

F-word anyone?

We paid for all this.

This is why when it comes to public money, there are mandatory reporting laws and the CEO has to notify at least the anti-corruption bureau (IBAC) of potential wrongdoing.

I would have thought a report to the police would also be mandatory.

Mr Schneider says the council is “fully aware of its reporting obligations”, so I would imagine the council has reported this issue to IBAC and perhaps the police.

We can only hope so, and that a full, independent investigation follows into Mr McMahon’s spending and the spending on all 81 of the council’s corporate credit cards.

 

This whole credit card scandal happened because of, at the very least, a lack of scrutiny and transparency.

How far it goes, how deep it goes, and who else is caught in the net remains to be seen and – again – will only be settled by a full and frank investigation.

As the saying goes, those with nothing to hide have nothing to fear.

Having been ripped off for months before anybody noticed, WCC ratepayers deserve nothing less.

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