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Maddocks sent the council an invoice, but it was withdrawn and never paid.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And, if so, who decided that the invoice would be withdrawn and why?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.

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Carol Altmann – The Terrier

The Local Government Inspectorate has launched an official investigation into the sacking of former Warrnambool City Council chief executive officer Peter Schneider.

Acting Chief Municipal Inspector Dr John Lynch confirmed the investigation this afternoon in response to questions from The Terrier.

“The Local Government Inspectorate is investigating matters relating to the recent termination of a CEO contract at Warrnambool City Council,” he said.

The LGI is Victoria’s top, independent watchdog over local government and has powers to investigate, audit and prosecute breaches of the Local Government Act.

Dr Lynch said he was unable to provide any detail on the scope of the investigation while it is underway.

“The Inspectorate deals with complaints or requests for investigation in strict confidence and does not provide information that may compromise current investigations.

(It) will be able to provide further comment when the investigation is completed,” he said.

While the depth and breadth of the LGI’s investigation is confidential, there has been mounting speculation and public unrest around the circumstances that led to the sudden dumping of Mr Schneider on 13 July.

Mr Schneider, who had relocated from Perth to take up the position in February 2019, was sacked after just 18 months in the job.

The dismissal happened behind closed doors, with four councillors – Crs Michael Neoh, Kylie Gaston, David Owen and Sue Cassidy – voting as one and using a “no reason” clause in Mr Schneider’s contract to dump him.

The council’s Community Development Manager Vikki King was then immediately appointed acting CEO for up to 12 months. Ms King now holds both positions.

Confirmation of the investigation comes as Cr Sue Cassidy today announced she would run again in the October election.

Former mayors Crs Neoh and Gaston have already declared they will run again.

Cr Owen is yet to make an announcement.

Mayor Tony Herbert, Cr Robert Anderson and Cr Peter Sycopoulis all voted against Mr Schneider’s sacking and have remained vocal in their support for the former CEO.

While it’s still not known why Mr Schneider was sacked, it is known is that rumblings of discontent among the four councillors behind the coup started as early as February.

Despite this, Mr Schneider went on to pass his performance review and received a pay rise as a result.

The discontent reignited in June, with Cr Neoh demanding the release of key findings of the latest WCC staff survey results – something he had never done in his previous 16 years on council – telling the Standard on 28 June he held “grave concerns” about the results.

That same month, on 22 June, the annual community satisfaction survey showed the WCC had hit an all time low.

Mr Schneider was sacked just three weeks later. He is now pursuing his own legal action against the four councillors involved.

The four councillors have refused to disclose how much the coup will cost ratepayers, but it’s expected to run into hundreds of thousands of dollars.

The LGI investigation is the second major investigation into the council as it limps toward the October election, with the Victorian Ombudsman still to release her report into the misuse of council credit cards.

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Carol Altmann – The Terrier

Well, well, well…. it turns out former Warrnambool Racing Club chief Peter Downs resigned from the Lyndoch board months ago, but, oddly, officials weren’t told until the very day after The Terrier post on Facebook.

Mr Downs resigned on 18 December 2019 and the Australian Securities and Investment Commission (ASIC) is supposed to be told of such changes within 28 days.

Despite this, and despite Lyndoch having held at least one board meeting since then, ASIC wasn’t formally notified until 17 February – the day after the Facebook post on The Terrier.

Mr Downs’ profile was also suddenly whipped down from the Lyndoch website.

Funny, that.

As it stands, there has been no public statement by Lyndoch about Mr Downs’ departure after three years on the board, and just three months after he was re-elected for a second term.

While I am sure we’re all happy to help Lyndoch to keep up with its governance free of charge (!), the bigger picture here is cause for concern.

Who replaces Mr Downs?

As we now know, while Mr Downs’ seat at the table sat empty, the Lyndoch board was rejecting membership applications left, right and centre.

You have to be a member of Lyndoch to become a board member.

No new members = nobody can nominate for the board.

Memberships were discarded instantly because the applicants happened to know me, however closely or distantly, or have ‘liked’ a post from The Terrier.

Wow, to think that passes as acceptable.

Board vacancies no longer have to be advertised, as they were under the old rules of Lyndoch that were changed without any of us noticing.

Now, when a vacancy arises, the board members and CEO just hunt around for their preferred applicants.

If any other public body worked this way – imagine the WCC councillors and CEO deciding who could be on the council – there would be rioting in the streets.

For the wider community to have no chance to nominate for the Lyndoch board is an outrage.

In any other world, this would be called branch stacking, or insider trading, or a closed shop, or a cabal, yet we are supposed to accept it as normal.

I keep saying it, Lyndoch is owned by the community and run by the board on our behalf.

That board will hold its monthly meeting on Tuesday.

There it will decide who will replace Mr Downs. The names are in.

It will also decide which membership applications, including that of Vicki Jellie AM, will be accepted or tossed in the bin.

It’s going to be a very interesting test.

There are troubles at Lyndoch. I am going to keep saying it, despite the attempts to silence those who say the Emperor is naked.

Does the current board feel happy with how things are being run? Do they agree with this shutting out of the community? Are they monitoring the numbers of staff on sick leave? Are they happy to sit back and watch and then say they knew nothing and did nothing?

There is a lot to be learnt from what is now unfolding at the Warrnambool City Council about speaking up and standing up.

I, for one, am waiting to see who from the Lyndoch board emerges as a Bernadette Northeast – on the front foot – or as a Cr Michael Neoh – far too little, far too late.

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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.

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Carol Altmann – The Terrier

Every now and then something slips out of Warrnambool City Council and we catch a glimpse of what really goes on.

This is when we learn what councillors really think, unplugged and unfiltered – this is one of those times.

The words of one councillor, former mayor Kylie Gaston, recently leaked through the solid wall of control via an email and I must admit that it made my jaw drop.

Cr Gaston didn’t expect these words to escape and she was not happy about it, but the non-confidential email she wrote to her fellow councillors (except Cr Peter Hulin) has crept through a crack and run free.

The email was sent by Cr Gaston the night before the September 2 council meeting at which councillors were still battling the raw flames of the credit card scandal and desperately trying to regain public trust.

As part of rebuilding this trust, Cr Hulin wanted the council to ask the Local Government Minister for a full review into all council spending for the past seven years, provided it wouldn’t cost ratepayers any more money.

Cr Gaston did not like this move at all and she told her fellow councillors as much, while at the same time revealing what she really thought about the whole issue.

Here is her email from 1 September in full:

“Hi everyone,

I am only writing this email to councillors, not including Peter Hulin as he is putting the motion forward.

I will be blunt.

This is a political notice of motion. Who is going to second it? Why second it when it is only going to add to the political fire, no matter what the outcome.

I think we all believe, as Thommo said, this is an iceblock not an iceberg. If the Standard reporters are working this out, why would we fuel the fire?

Let the motion lapse. Let the gallery yell at us. And let’s get on with what we are elected to do without unnecessary cost to ratepayers.

This is a blip. It will pass. We need to focus on our values and keep moving our city forward.

Kylie.

 

Did a word leap off the page for you? A tiny word that says so much: “blip”.

A blip.

We are talking here about the blatant misuse, abuse and unjustifiable spending of ratepayers’ money by senior council staff and a potential cover-up, all of which is now the subject of three inquiries.

I can’t un-see that word, “blip”, despite Cr Gaston’s explanation, which I have also published in full below.

And then there is this zinger: “let the gallery yell at us”, which is exactly what they did, and some paid the price for it.

Cr Gaston expected a rowdy meeting, but now anyone who shouts at meetings in the future could be fined.

In this email we also learn Cr Gaston looked to the Warrnambool Standard to gauge whether credit card abuse was a problem for the council.

If the sole newspaper wasn’t worried, why should councillors be?

Good grief.

And, lastly, it shows Cr Gaston, who is an experienced councillor, trying to line up councillors like ducks in a row, rather than free-thinking individuals.

So this is how it works when we aren’t watching. How fascinating.

I asked Cr Gaston a number of questions about this email and this is her response in full:

Hi Carol,

I will certainly be interested to see how you frame my response.

I believe the NOM (notice of motion) was political rather than useful and wanted to clarify that with my fellow Councillors and not make it personal with Peter Hulin.

This has certainly been a distressing and unfortunate episode at Council. Personally I am disgusted with the inappropriate use of monies and I believe most people are honest.

We need to  learn from it and move on. I did not intend the word blip to imply something small but rather in the history of Council this is an unfortunate episode which we need to deal with responsibly and I believe we had already put appropriate actions in place.

At the time of the Council meeting the Ombudsman was involved  and two weeks prior, Council had called a Special Meeting to appoint an external and independent auditor.  The scope will certainly include a review of our corporate governance and how we arrived at this point.

As it stands, the Minister is waiting the outcome of the Ombudsman report, so in fact the Notice of Motion achieved no more than what is already happening.

There is not much more to it than that.

Kind regards,

Kylie

I ran this response past Barry the Bullshite Detector. He gave it a 9/10, saying it contained more spin than a whirling dervish dance party.

Last Thursday, I asked Cr Gaston a follow-up question on why she was so confident this whole issue was an “iceblock”, after all, the official inquiries had only just begun.

Her answer arrived a few hours ago:

“In my view, the subject of further investigation had been dealt with at the special meeting and the (motion) was not going to add value.

What it was going to achieve was keeping the issue burning (so to speak) in the public domain when we had already dealt with it.

Bringing in the minister was only going to be political and, as it eventuated, the minister did indeed say it was already being investigated.

At this point I’ll wait to see if there is any further information of which we are unaware.

I don’t believe corruption is systemic at WCC and through transparent external investigation we will review our policies to ensure this does not happen again.

There are always some people who will try exploit systems for their own gain, I detest this, however, I believe most people are honest and our staff are hard working and trying to do the right thing.”

 

Nobody has ever suggested corruption is systemic at the WCC, but boy, wouldn’t you want to turn over all the rocks to see what might crawl out?

That is how to restore public confidence, bit by bit, and without a “blip” in sight.

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