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.

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Carol Altmann – The Terrier

Holy moly, I step away from Warrnambool for three weeks and return to find the place is on fire, with whistleblowers dropping an A-bomb right onto the Warrnambool City Council.

A string of red-hot allegations has been sent to Ratepayers Victoria after its president, Dean Hurlston, urged council staff to “whistle loudly” if they knew anything about the misuse of public money following the WCC credit card scandal.

Mr Hurlston has listed the allegations in a letter sent yesterday to WCC Mayor Tony Herbert and CEO Peter Schneider, and paints a damning picture of what was allegedly going on behind closed doors.

The allegations include cover-ups, mismanagement, fraudulent behaviour and a lack of action in response to staff concerns that stretched to the very top.

We even, allegedly, paid for private parties dressed up as “events”.

Here is the list:

Attempts over time to raise significant concerns of fraudulent spending and cover up of same;

Systematic abuse of internal controls of authorisation of spending by management;

Coercion and direction by senior management to subvert said controls and “help hide” spending;

Direction to suppliers to “alter” the contents of invoices to hide the true nature of expenditure;

The use of WCC resources for personal or family benefit;

The use of WCC assets for personal gain;

Inadequate reporting of expenditure (thousands of dollars’ worth of transactions reported as “supplies”);

“Parties” and “events” openly abusing the use of council funds (ratepayers’ monies); and

WCC not investigating or attempting to recover falsely procured items.

 

You might want to read that list twice, as I did, to digest it.

It sums up all of the issues that have been swirling around the WCC “credit card scandal” which, as I have said so many times, is just the tip of the iceberg.

Mr Hurlston has urged the whistleblowers to contact IBAC and the Local Government Inspectorate immediately and seek confidential and protected disclosure. (I am going to add to that and say they should also contact the Victorian Ombudsman straight away, where an inquiry is already underway. The number is 9613 6222.)

He has also urged the council to appoint an external investigator so all staff with any information about misconduct are able to speak freely and openly.

To be clear, at this stage these are allegations only, but the fact the whistleblowers have gone to RV in the first place speaks volumes.

Whistleblowers take an enormous risk and nobody throws themselves into that line of fire without weighing up the potential cost of being exposed and punished.

It comes as no surprise to me that RV says in its letter that some staff claim they have been intimidated and bullied “for trying to expose the truth”.

Yep, I know all about those tactics, and I can only imagine how dis-spiriting and terrifying it must be for those who depend on the council for their livelihood.

The WCC is still doing all it can to shut people up, including me, but it won’t work.

Why?

Because too many people want the truth.

You want the truth. The whistleblowers want the truth. Ratepayers Victoria want the truth. I want the truth.

So the council may continue to spend hours of energy trying to shut this all down, to limit the damage, to flush out the leakers, and to punish or discredit those who speak up, but it won’t work.

And our sole newspaper may prefer to write stories about desperate people stealing twiggy sticks or passion pop, but uncovering corporate crime and mismanagement is a slow, complicated and often boring process. Twiggy sticks get more clicks.

Yet the truth always rises to the top.

I call it a slow burn.

Even when a bombshell drops like today, it can take months or even years to peg out all the facts, but it will happen and it will be well worth it because that, dear terriers, is what accountability is all about.

It’s good to be back.

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Carol Altmann – The Terrier

For weeks now, I have been asked one question about the Warrnambool City Council credit card scandal: is there more?

The answer is yes.

Yes, there is.

From the very beginning, this investigation into credit card use at the Warrnambool City Council has never been about individuals. It is not personal.

This whole investigation has been about exposing an attitude of entitlement and ways of behaving that have operated within certain sections of the council for years, particularly around the office of the executive.

It has been about again exposing a lack of accountability and transparency, coupled with doses of intimidation, that allowed this culture to develop.

So tonight I can tell you that, yes, the issue of credit card spending and the use of public money goes beyond one individual.

It goes beyond the council’s former head of tourism, Mr David McMahon, who as we know resigned as a result of this investigation.

But because of recent threats that have been made against me privately, and against members of my extended family which worries me more, I am not going to name names.

I can tell you, however, that it goes beyond one individual, because I have receipts.

I am now calling upon the Warrnambool City Council to tell ratepayers and residents the whole truth.

It cannot just keep covering up a cover up.

What ratepayers and residents deserve to know is what the council has done since this whole credit card scandal was first uncovered late last year, how much credit card spending has been scrutinised since, what has been found and what is being done about it?

Remember, this is our money – public money.

In light of the recent report by the Victorian Auditor General into fraud and corruption control, the Local Government Minister has called on all 79 councils to review their policies and procedures and report to him by September 1.

There is no more hiding behind closed doors.

We want to know the full story about the 81 credit cards that have been in circulation at the WCC.

What are the spending limits? Who holds them? Have they been used to purchase big dinners, alcohol, lunches, coffees, gift vouchers? For what reason?

I am calling upon the council to tell you what is going on and what has gone on – fully and frankly.

And if it doesn’t, then I am calling upon the good citizens of Warrnambool who may be in a position to whistleblow, to do so loudly.

In pursuing this issue, I have not had a personal axe to grind or any hidden agenda. I am simply doing what journalists do, in trying to get to the truth.

Between us, will get there and – eventually – we will have that truth.

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Carol Altmann – The Terrier

Here’s something I have been wanting to tell you for a while.

Warrnambool Mayor Tony Herbert was alerted to the big spending by former council tourism manager David McMahon months before he says he was – not in November, but August last year.

How do I know? Because I told him. And he did nothing.

Here’s how things unfolded:

This time almost a year ago – on 22 August 2018 – I asked to meet with Cr Herbert to talk about two very serious things.

The first was an alleged spend-up on a lunch by Mr McMahon using his corporate credit card, and the second was allegations of bullying behaviour by this same person.

The reason I remember this meeting so clearly is that Cr Herbert confirmed he had heard “something about” the big spend up and that it “had been repaid, or was going to be repaid”.

This, to a journalist, is a chunk of gold.

I realised I was on to an important story and so my digging began and it would last almost a year.

Why am I raising this now?

Because the now Mayor Herbert recently made a formal, public statement that he first heard about the credit card mis-use in November as part of mayoral briefing with former CEO Bruce Anson.

The briefing, he said, followed Mr McMahon’s unauthorised spending being picked up by the council in September.

I was somewhat stunned by this version of events and have been waiting to see if Cr Herbert moved to correct the record, maybe even at last Monday’s council meeting, but that hasn’t happened.

Instead, Cr Herbert says he has no recollection of this part of our conversation.

 

(By the way, I will cover the bullying allegations in a later story, because that deserves an entire piece on its own.)

I now consider the 22 August meeting a critical part of the puzzle as to who knew what, when, and most importantly, what was done about it.

Cr Herbert’s version of events is that he called the meeting with me, not the other way around, so we could talk about my writing “more positive stories”. (You can read his response in full at the end of this piece).

The crux of the issue is that last August I raised a serious concern about Mr McMahon’s spending and Cr Herbert – it appears – did nothing about it.

He didn’t raise it with the CEO. He didn’t alert other councillors or the council’s Audit and Risk Committee.

For whatever reason, Cr Herbert didn’t consider this big, red alarm bell worth following up.

 

Mr McMahon’s unauthorised spending was apparently uncovered internally by the council a few weeks later, just by sheer chance.

This whole thing reeks.

And it reeks even more when you consider that once Cr Herbert was told in November – officially – about the credit card misuse, he was dead against my investigating it further.

Readers may remember Cr Herbert’s long Facebook post on Valentine’s Day, February 14, berating me for wasting council’s time and resources:

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

No, Cr Herbert, I was doing what you were supposed to be doing as an elected official of the people of Warrnambool.

A fortnight ago I notified the other six councillors of my August conversation with Cr Herbert.

There has been not one word in response. Nobody seems to care that Cr Herbert’s public statement is wrong.

A few weeks ago I dropped the f-bomb here: fraud.

Tonight I am going to use the c word: cover up.

Because from go to woah, this whole credit card mess reeks of a cover up.

 

It is now up to the powers-that-be to decide what happens next, because I have done all that I can to open up this particular box of bullshite around Mr McMahon’s credit card use.

Today I submitted a report to the Warrnambool Police. I have already submitted a report to the anti-corruption body, IBAC.

Who knows where those two reports will go?

But the wider credit card scandal doesn’t finish here, because I believe there is more to be exposed, beyond Mr McMahon, even though –  I have to stress – the majority of council staff work hard at saving ratepayers’ money.

What needs to be exposed is the excessive or unjustifiable spending that was signed off by those in charge.

The new CEO Peter Schneider says he is looking at this. The Terrier is too.

It will be a slow burn, but it’s the only way to well and truly clean out the trough.

---

Mayor Herbert’s response to my questions about our 22 August 2018 meeting:

Dear Carol,

Thanks for your email.

I remember the meeting too, which I arranged. 

I had hoped during our meeting to plant the seed/notion, as it were, that “positive leaders can create a positive community and positive communities can accomplish anything”.  I was hoping to encourage you to be that leader.  That was my single aim of the meeting.    

I recall suggesting that people in Warrnambool would prefer more positive stories and those of a community-building nature.  I discussed the relatively negative prior decade on Council and that I was now trying to be part of a team building a more positive council.   

We chatted about what was good, what was coming up with some major projects – since announced in the Reid Oval and the library/learning hub at TAFE. 

As we talked it became clear you were not interested in considering my feedback. 

As the meeting concluded, we laughed and you said that the type of writing I was referring to was best left to The Standard and others and that you had a niche market writing in your particular style and to a particular audience.

Then you left.  

On the matter of the council officer, I don’t recall this being part of our discussions. At that time I would not have had any information about money that had been paid or was to be repaid. Even though I attended the VTIC seminar, I did not know any information on officer spending, councillor spending or spending by others.  I believe that the council credit card statements for August would have come through in September.   You and I met on August 22. 

For your further information, I have checked with the Finance Department today: Councillors/Mayors have never had credit cards at WCC.    

I was unaware of the said officer either having a credit card or not having a credit card at the VTIC seminar.  As Councillors, we have not been presented with a list of all credit cards in the organisation. 

I trust this answers your questions and I look forward to you moving onto more positive stories for our community.

Regards,

Tony Herbert

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Carol Altmann – The Terrier

Isn’t it astonishing that our elected councillors, while pushing for a rate hike, knew nothing about the thousands of dollars being racked up on Warrnambool City Council corporate credit cards for meals, alcohol, travel, accommodation and coffees?

They apparently had no idea. None.

I don’t think our councillors even knew that the council has 81 corporate credit cards floating around – one for every four, full-time equivalent staffers.

And worse, when it was discovered that at least one of these cards was being used to buy excessive amounts of booze, and car washes, and unauthorised dinners, they didn’t know about that either.

No idea. None. Nobody told them.

(I am still waiting for a formal statement on behalf of all councillors from Mayor Tony Herbert on the simple question of who was told what and when. Hopefully I can run it in full tomorrow.)

We now know that more than one card was being used in this way, thanks to my asking questions, sources who have a strong moral compass, and documents released through Freedom of Information that I lodged on 30 October last year.

And yet the very councillors who agreed to jack up our rates by 4.5% for the next two years didn’t know a thing about it, and nobody bothered to ask.

Even the Audit and Risk Committee, which includes Cr Sue Cassidy and Cr Michael Neoh, didn’t know.

According to a statement from Crs Neoh and Cassidy, the committee only gets notified if there is suspicion of fraud. Well, guess what…..

If this is what passes for scrutiny of ratepayers’ money at a time when every dollar counts, we are being ripped off and no wonder – no wonder – the big party going on behind the scenes in some quarters of council went unreported for so long.

 

Which brings me to a new feature in The Terrier – the Big Barry Boolshite detector.

Big Barry is a Bull Terrier and he can sniff out Boolshite at 100 paces, so tonight I am unleashing him for the first time and I am sure it will not be the last.

I gave Big Barry a sniff of the council’s claim that it, miraculously, discovered Mr McMahon’s over-the-top credit card spending in September, just a few weeks before I lodged my FOI on 30 October.

Big Barry’s meter went into the red zone! Bool-shite detected!

Because I have since sifted through my emails to council, and I discovered that I first asked about their credit cards on, wait for it, 20 September last year!

Why did I ask them? Because journalists in South Australia and Tasmania were exposing credit card rorts within councils.

 

Such was the flurry of excitement within council about my questions, it put a whole response on its website, buried where nobody would find it, a week later on 27 September last year.

And then on 30 October I lodged my FOI on Mr McMahon’s spending, having received a tip off about a big booze up that went onto the corporate card and was paid for by you, me and Barry via his exorbitant dog rego fee.

And coincidentally, a few days later in early November, former CEO Bruce Anson sits down with Mr McMahon and sorts out how much Mr McMahon needs to repay.

(Barry, Barry, calm down…it’s okay, we all know its Boolshite).

A big slab of what Mr McMahon had to repay – $1600 worth – was for a big knees up at the Cape Schanck resort in July where Cr Tony Herbert and Cr David Owen were among the council representatives.

Despite being there, at Cape Schanck, Crs Herbert and Owen apparently saw nothing untoward that made them think, “hang on, who is paying for all this?”

And this is why we have lost faith and heart and trust in the very systems and people that should be protecting us from being exploited.

The new CEO Peter Schneider is holding his internal review, all of the 81 credit cards are now being checked – at long last – but, sorry, for those of us now paying higher rates and fees, it is all too little, too late.

Our local MP Roma Britnell is the only one in authority who, so far, has had the spine to take this straight to the top. Straight to the Local Government Minister, Adem Somyurek, who has been swift to act on the rubbish going on down in Gippsland at South Gippsland Shire.

The Minister put administrators in to clean out the joint.

I agree with Roma’s call for a full independent inquiry and so does Barry and I bet you do too.

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