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.

While Mr McMahon ended up wandering down a crooked path, he was also – we must remember – spending thousands of dollars of ratepayers’ hard earned money on food, booze and takeaway coffees with the full approval of those in charge.

He was not the only one.

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.

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 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.

And I am waiting to see if South Coast MP Roma Britnell’s call today for an independent investigation is heeded by the Local Government Minister.

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.

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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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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?

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?

 

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

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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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