09 | 26
2011

Ernst & Young: A vehicle for hiding corruption in Canberra

Categories: ACT Government, Australian Defence Force, Australian Federal Police, Commonwealth Government, Commonwealth Ombudsman, Corporate profit, Corporate responsibility, Corruption, Discrimination/Racism, Ernst & Young, Former Commissioner, Government, Human Rights, Law Enforcement, Refugee Policy, Refugees, Respect, Rule of Law

by: Bakchos
Leave feedback | 23 Comments »

There is no question about racism being a profound form of ignorance, but when it becomes something that informs employment decisions by one of the world’s biggest accounting firms, Ernst & Young, and a Australian Government Department ACT Treasury, then it becomes something more than simply abhorrent – it becomes a point of view which can be openly expressed in boardrooms and in official government correspondence. It’s at this point that ignorance becomes dangerous and damaging; it in fact becomes nothing less than corruption.

The true extent of corruption in Canberra

Last year according to the Sydney Morning Herald, almost 1800 misconduct cases were handled inside just 5 per cent of the agencies that make up the Federal government. In the past six years, more than 3200 investigations have been conducted inside the Department of Defence alone. Almost one-fifth of Australian Customs and Border Protection’s workforce have been investigated since 2007 for offences including bribery and ”prohibited imports”.

The Australian Federal Police (“AFP”), which concentrates on drug trafficking and counter-terrorism, is reluctant to deal with Commonwealth fraud matters. In the past six years, no fewer than 919 fraud investigations into Commonwealth public servants were prematurely terminated because they resigned.

While the AFP have demonstrated a reluctance to investigate senior Canberra bureaucrats for fraud, they have shown an open willingness to investigate and to prosecute those whistle blowing bureaucrats who have been willing to stand up and say enough is enough. Is it any wonder then that corruption is so rife in Canberra and its detection so minimal?

Corruption and terrorism

In this age of heightened concerns about terrorism and organized crime it seems almost unbelievable that a senior Department of Immigration bureaucrat can grant Australian citizenship to 110 Chinese citizens whose applications for Australian citizenship should never have been approved. This is precisely what senior Canberra based Department of Immigration employee David Moon did and nobody in the Immigration Department blew the whistle on him. Why? The answer is simple; the AFP are more concerned about protecting their political masters and the bureaucratic elite in Canberra than they are with upholding the ‘rule of law’ and protecting those who have the courage to speak out about public sector corruption.

According to the Sydney Morning Herald , at the end of 1999, a team of immigration analysts whenasked to compile statistics on where new migrants were living identified a serious problem. When comparing original forms to later data as part of the data matching process for their statistical analysis they found that a number of original forms were missing. When they went looking for the original documents at the Immigration Department’s old Cumberland Street offices in Sydney, they found that a large number of files had gone missing.

During the same period and in an unrelated incident, another official arranging a citizenship ceremony found a child’s name missing from a key certificate. As with the aforementioned analysists, he went searching for a hard copy original to check the name but he came across the same problem. The file had disappeared.

However, there was something or more precisely someone who formed a link between all of the missing documents and files from the Immigration Department’s Cumberland Street offices. They had all been managed by the same senior officer – David Moon. The missing documents were later found secreted inside his office. Moon had been taking thousands of dollars in kickbacks and luxury overseas holidays to illegally fast-track certain people through the system. In 2008, the 69-year-old was jailed.

Last year, in 10 Canberra based agencies, there were 21 cases of alleged corruption, 65 conflicts of interest, and 247 cases of fraud reported.

We the Australian taxpaying public have  not herd about any of these, with many, being handled discreetly to avoid public embarrassment. Indeed, there were only 11 referrals to the AFP by the entire Commonwealth government last in 2010. A serious issue of concern here is that a number of these referrals in the past have been to investigate the whistleblower who tried to expose the fraud, rather than the parties involved in the actual fraud.

The corruption I am referring to ranges from outright theft and the taking of bribes to poorly-managed procurements worth many millions of dollars, shoddy information security measures such as passwords which are never expunged and a culture of rorting travel benefits, salary entitlements or department credit cards.

In 2007, Griffith University published the data it had compiled from a survey of 8000 public servants on fraud and misconduct within their departments

The Commonwealth and it’s Canberra agencies scored as as poorly, as NSW, Queensland and Western Australia, all of which have agencies whoes sole responsibility is to investigate corruption, Canberra does not have such an agency. A total of 22 per cent of respondents had direct evidence of the rorting of entitlements, 31 per cent had seen a cover-up of poor performance and 10 per cent had seen someone use their status to obtain personal favours.

More importantly Canberra based agencies were more likely than their state counterparts to have seen money stolen, resources improperly used for personal gain or pornography downloaded to a work computer than their state counterparts andcrucially, only marginally fewer Commonwealth employees (2.4 per cent) had direct evidence of the payment of bribes than those in NSW (2.9 per cent).

What percentage of Canberra based public sector fraud was reported by the agencies concerned to the AFP for investigation? Less than 1% based on the aforementioned figures. The former Commonwealth Ombudsman Professor John McMillan says of these figures that:

”They do not want to expose a weakness in their own procedures or have the public questioning the integrity of their process. By and large the interest of an agency is to avoid any publicity questioning … its efficiency or integrity.”

Of 500 internal fraud cases recorded in the Department of Immigration in the past two years, only six were referred to the AFP. This leaves a serious question outstanding; how many well healed illiegal immigrants are entering Australia fraduanetly each year via this process at a time when racist and xenaphobic politicians and beaurocrates in Canberra seem obsessed by those genuine refugees arriving on a leaky boat?.

Last year, Centrelink investigated 337 of its employees for misconduct including conflicts of interest, fraud and abuse of office. In 2008, the Department of Families, Housing, Community Services and Indigenous Affairs investigated 138 allegations that staff obtained a benefit by deception, and 475 misconduct cases between July 2007 and December 2009. How many cases were referred to the AFP by each agency in the past two years? One!

The reluctance of departments to bring ignominy upon themselves is one reason for the low rate of referrals – if someone has defrauded the agency it is because financial controls allowed them to do so. But there is another important reason. Internal investigators might find an invoice is missing, but they are unlikely to uncover one that was forged.

The ACT Department of Treasury and fraud

Between 2002 and 2004 the former Commissioner for ACT Revenue (“Commissioner”) attempted to bring to the attention of his superiors in ACT Treasury a number of serious cases of fraud that were brought to his attention. One involved a tenderer forging a loan offer from the ANZ Bank; another involved the theft of a large amount of money, about $130,000,000.00 from the ACT Home Loan Portfolio over a number of years. Another involved allegations made by a quantity surveyor, Mr. Alan Wylucki, that a named officer within ACT Treasury was receiving kickbacks from certain property owners in Canberra for altering valuation notices or for ‘adjusting’ other documents. Finally, the Commissioner attempted to expose systemic and entrenched racism within ACT Treasury. He blew the whistle on the whole lot. What happened? He was sacked, fitted-up and prosecuted by the AFP. Where are the people who were the subject of his attempts at whistleblowing? Still in their same jobs, totally unaccountable to anyone for the crimes that they have committed and probably continue to commit.

What is more concerning about the ACT Treasury fraud is that certain evidence that was crucial to exposing the true extent of corruption within ACT Treasury disappeared from the Department. Even evidence that Mr. Chris Roberts of the Commonwealth Ombudsman’s Office identified as being present in 2005 had disappeared by 2006 when it was subpoenaed. Further evidence that was seized from the Commissioner’s house by the AFP which could have exonerated him and potentially jailed a number of senior ACT Treasury bureaucrats for fraud disappeared while in AFP custody. What did the legal system do about this? Nothing! Why? Because the whole sytem in Canberra is corrupt to the core, “just-us” in Canberra is just that. Those with influence and membership of the Commonwealth Club or who have a special relationship with sporting ACT are immune from the laws that govern the rest of us.

The role of Ernst and Young in the ACT Department of Treasury Fraud

Because of the continued harassment and pressure the Commissioner was under because of his attempts to expose the true nature and extent of the corruption within ACT Treasury, he had his lawyers write to the then Chief Executive of ACT Treasury, Mr. Mike Harris, advising him that the Commissioner proposed to commence an action for defamation. The officer the Commissioner identified as the ‘ring-leader’ of the racists then contacted two of the Commissioner’s previous employers, the ANZ Bank and Ernst & Young. While the ANZ Bank raised questions about the legality of this request and referred the matter back to the Commissioner who in turn, referred it as a grievance to his superior Mrs Tu Pham, Ernst & Young in the person of Tanya Taylor, invited the writer in and in admissions made by the writer to the ACT Magistrates Court, discussed all aspects of the Commissioner’s employment with Ernst & Young with him, including bringing out documents from the Commissioner’s personnel file.

Following the writer’s meeting with Tanya Taylor he formally wrote to Ernst & Young requesting documents from the former Commissioner’s personnel file. Incomprehensibly Ernst & Young provided the writer with the documents requested.

There are a number of significant issues here. Firstly, Mrs. Tu Pham, the then Deputy Chief Executive of ACT Treasury and former ACT Auditor-General, testified in proceedings in March 2006 that the writer of the letter to Ernst & Young was not authorized to conduct an investigation into his superior or to use ACT Government stationary to gain access to documents to which he would not otherwise have had access. Secondly, Ernst & Young could not have legally provided the documents under NPP 10(d) as this provision is specifically for law enforcement agencies and ACT Treasury is not a law enforcement agency for the purposes of the National Privacy Principles (NPP). Thirdly, the documents provided by Ernst & Young pursuant to the request are not the same documents that the Commissioner provided to Ernst & Young when they approached him and offered him a job.

When the AFP eventually gained access to the Commissioner’s personnel file from Ernst & Young and tendered it into evidence in support of charges they had brought against the Commissioner, what they tendered into evidence were documents that did not contain the Commissioner’s signature or any other biometric data linking those documents to him. There was a signature that purported to be the Commissioner’s, but which matched no other signatures of his on his Ernst & Young or ACT Treasury personnel files.

It is incomprehensible that someone can walk in off the street, ask Ernst & Young for the personnel file of their boss, who was incidentally conducting a fraud investigation into them and gain access to the documents held in that file. What Ernst & Young achieved in providing documentation under the apparent request from ACT Treasury was to end the investigation for fraud being conducted by the Commissioner into a subordinate officer and stop an application being made to HREOC, alleging that the writer of that request and a former Director of Ernst & Young had committed acts of racial hatred against the Commissioner.

ACT Treasury and the Australian Federal Police would like to pretend that this is all made up. However, the former Commissioner for ACT Revenue, because of the extent of the racial vilification and racial hatred he was being subjected to from within ACT Treasury, due to him wanting to hold those in power accountable for their actions, sought help from a Registered Psychologist, Dr Jillian Fleming. Dr Fleming has provided a letter (page 1 & page 2) to the Commissioner’s former lawyers, which clearly states that the Commissioner was discussing the racial hatred and defamation he was being subjected to from within the ACT Government with her for a number of months in the lead up to his dismissal.

What is most telling about this case is that ACT Treasury can make official correspondence disappear and refuse to comply with a subpoena and face no penalty, because the victim is an Aborigine. Likewise, Ernst & Young can just handover documents from a previous employee’s personnel file to a subordinate in another workplace and suffer no penalty. Why? Because the victim is an Aboriginal Australian, which goes to prove that a black man, no matter how hard he works, will never be the equal of a white in the eyes of white society.

The Australian Department of Defence

Blak and Black is also in the process of investigating allegations that the AFP drove a former Canberra based Department of Defence whistleblower to his death by suicide after he was accused by the Defence Department of committing various illegal acts when he tried to expose corruption on the Collins Class Submarine and Seasprite Helicopter projects. Blak and Black will keep readers informed as the investigation into these allegations progresses.

23 Comments

  1. I’m worried now, I have previously giver my CV to Ernst & Young. What ever happened to professionalism? This is disgusting, really very disgusting. What happened to the so called writer? I guess nothing, I assume that he is white and the Commissioner black. So much for justice is this so called free country we live in.

  2. Does anyone what the what breakdown is between whistleblowers and those who have actually been corrupt is in terms of referals to the AFP?

  3. Well it would appear that none of the AFP, ACT Treasury, EY or the Commonwealth Ombudsman are, so yes Bakchos, who is accountable?

  4. While were on the isue of EY has there been any urther development on who Paul is and where he actually works?

  5. What happened to the 110 Chinese, did they get deported or is there one rule for rich migrants and another for boat people?

  6. How great it would be to be on top of the tree…so the public service is just a licence to be corrupt, bugger and I work for the private sector and pay tax, so I’m the one being ripped off!

  7. David that is so very true, I want a tax refund to repay increases due to public sector corruption.

  8. No one is accountable or at least no white person is accountable. Look at Blak and Black’c post Three months for a dollar. White costs us billions and a black woman gets three months for a dollar – Justice? I think not.

  9. The bad thing about all of this is the absolute refusal of either the AFP or ACT Government to act against their own and EY. How can a country say that it is corruption free when it tolerates this kind of behaviour?

  10. Paulo Flores great question. Though the bigger picture is one of open government which clearly we lack in Australia. It think that TI should have a very, very close look at Canberra before it does its next assessment on Australia.

  11. Hello there canberra you really do know how to give Australia a good name. Corruption, corruption and more corruption. Make the cons on the First Fleet seem like saints, well almost, but I guess that some things just don’t change.

  12. Wendy Maggs via Facebook says:

    Corruption everywhere, don’t forget your own Schapelle Corby . THE EXPENDABLE PROJECT: The Allan Kessing Interview
    http://www.expendable.tv

  13. I want my taxes back you thieving bastards from Canberra. How come the thief from ACT treasury is still employed there? Lying, racist bastards.

  14. Interesting, but I thought that there was more evidence? The BHOC tells me that there is an unprocessed ACT Government document relating to this issue with someone elses original hand writing and signature on it dated September 2002. How do the AFP and Treasury explain this?

  15. Anne via Facebook says:

    Nicola, is that one of Bakchos’ docs, or is it something he’s unaware of? Make contact with him, please.

  16. Felicity Keen that is a bloody good question. What did happen to the 110 Chinese who Moon illegially processed, are they still here or have they been deported? Lets compare their treatment to what happens to the boat people who we are continually arguing about.

  17. It sue is, or at least in my experience it is.

  18. Marmot says:

    There is some massive corruption in Canberra, but the departments have set up their own audit teams who instead of investigating cover it up. The Ministers know, but are busy looking the other way. The opposition knows too but isn’t interested.

    • Bakchos says:

      Yes there is massive corruption in Canberra and I agree with you that Government Departments use their internal audit divisions to hide some of this. The ANAO is also involved in the cover up. A friend of the Commissioners former wife who works for the ANAO said that she was aware of the missing money from ACT Treasury. IT’s an open secret in Canberra. The point about Ernst & Young though was more the racism than anything else. Tanya Taylor openly discussed confidential documents with a racist from ACT Treasury which served to further his racially motivated campaign of hate. More concerning, someone from within Ernst & Young fraudulently altered the Commissioners personnel file presumably at the behest of someone in ACT Treasury in order to further a scheme to cover up the theft and the racism within ACT Treasury. If the AFP had done their job properly this scheme would have come to naught. All three of these institutions, ACT Treasury, Ernst & Young and the AFP lack integrity. Unfortunately its people like you and I who are the losers in this round robin of corruption. Cheers Bakchos

      • Vincent says:

        Australian Public Service – risk management & compromised corporate governance.

        – rorting between recruitment companies, contracted personnel and government agencies

        – stifling influence upon the Australian National Audit Office in carrying out reasonable and honest audit of contracted staff recruitment by government agencies, compromised corporate governance

        An example of this was reported in the Canberra Times:

        “Poaching of Staff Alleged

        BY PHILLIP THOMSON
        10 Apr, 2011 12:00 AM

        THE DEPARTMENT of Foreign Affairs and Trade says a specialist for a private Canberra consultancy firm stopped work for DFAT after an investigation was launched into allegations the worker had tried to poach staff from competing companies working in the department.

        The DFAT statement said the specialist worked for Integral Consulting Services and had been investigated twice over claims of trying to poach staff from other private contractors working for the department.

        A spokeswoman said the department still had a business relationship with Integral and there was no suggestion that the alleged poaching took place with the knowledge of the company.

        Integral has been paid $1.57million since 2007 to work inside the department providing IT and administrative services, according to AusTender documents.

        A DFAT statement said the department’s conduct and ethics unit first investigated the Integral specialist in 2008.

        ”In 2008, an Integral Consulting Services specialist was cautioned for seeking to poach the employees of other DFAT contractors,” the statement said.

        ”Although not illegal, DFAT considered this inappropriate behaviour. In 2010, a similar allegation was made and following the commencement of an investigation the specialist ceased providing services to DFAT.”

        A statement from Integral said management and ownership changed in July 2010.

        ”While the individual specialist may have been cautioned, we are not aware of any formal caution provided by DFAT to the company.

        ”The specialist to which the statement refers no longer works for Integral.

        ”Integral is a strong advocate of fully transparent dealings with [information and communications technology] contractors.

        ”It has never been terminated from the DFAT panel.
        ”We have no record of correspondence between DFAT and Integral relating to the past investigations.

        ”Integral would not like to see the alleged actions of an individual who no longer works for the company jeopardise the current and future interests of the other 18 ICT contractors who continue to provide services to DFAT,” the company said.

        The case within DFAT was one of the latest in an increasing number of internal investigations by the department’s conduct and ethics unit.

        During the past two years the department has internally investigated this and more than 40 other serious allegations according to documents obtained under Freedom of Information laws.”

  19. Paul says:

    Bakchos,

    Was E&Y aware that the writer of the letter was not authorized by ACT Treasury to request that information when they provided it to him. To my mind this makes a difference to their cup ability. Regardless of your answer to that question, it does not explain or excuse the actions of Tanya Taylor in just pulling out the Commissioners personnel file and discussing it’s contents with any blow in who happens by. Did she provide the AFP with a statement? Has she confirmed the evidence of the writer. Perhaps he committed perjury and there never was a conversation. Do you know who the Commissioner wrote to at E&Y was it Tanya Taylor or someone else?

    Cheers

    Paul

  20. Sam says:

    Bakchos,

    You have presented a strong, but one sided case. Again you identify a problem with documents and again the dirty fingers seem to be on the hands of the ACT Government not EY. Tanya Taylor was a consultant as far as I know not an employee. Maybe documents were changed, I can’t say. What I can say is that if it occurred it was done by individuals and not the firm. I think that if anyone guessed the trouble that would come from all of this it would not have happened, but it has and needs to be addressed.

    I understand your need to embrace other causes to get your message out, but have you given any consideration to the damage you might be causing Australia’s reputation. As I said before I think that it is to late for your issues to be addressed. You seem to have lost to ALP and/or ACT Government corruption. That is a poor reflection on Australia and the ALP. Also, as I have said before, you’ll never get justice from the ALP. If you insist of continuing the fight you need to target the appropriate people and/or institutions EY is really not one of those.

    Sam

    • Bakchos says:

      Dear Sam,

      Thanks for your insightful comments. You have raised a series of questions/issues regarding Ernst and Young which I will respond to in the order that you raised them.

      1 Tanya Taylor was a consultant as far as I know not an employee

      All correspondence I have seen coming from Tanya Taylor was on Ernst and Young letterhead. To the best of my knowledge and without refreshing my memory by pulling up copies of her correspondence which I hold, she also signed her letters “Tanya Taylor, Ernst & Young”. To any right minded person Tanya Taylor was holding herself out to be an agent of Ernst and Young. At no time, as far as I’m aware, did Ernst and Young direct her to stop using their stationary or signing under their corporate identity. All extaent evidence points to the fact that Tanya Taylor was an agent for Ernst and Young and recruited the Commissioner in her capacity as an agent for Ernst and Young and at the behest of Ernst and Young.

      2 Maybe documents were changed, I can’t say. What I can say is that if it occurred it was done by individuals and not the firm

      Documents were most certainly changed. The Commissioner was approached and recruited by Tanya Taylor on behalf of Ernst and Young. Prior to his recruitment by Tanya Taylor he worked in Sydney in conjunction with his father-in-law using his father-in-laws office space. There was never an application from the Commissioner to Ernst and Young that’s why Ernst and Young can’t produce an original with his signature or other biometric data on it. The documentation produced by Ernst and Young at the Commissioners committal was not original and the authenticity of same has always been contested by the Commissioner. The DPP did not pursue the charges relating to Ernst and Young because of the documentation issue.
      It is interesting to note that in the statement Tanya Taylor gave to Constable Maguire of the AFP she made no mention of a supposed meeting with anyone from ACT Treasury or elsewhere seeking information on the Commissioner! You would think that if a ‘blow-in’ had come off the street seeking this information she would recall the occasion. The AFP made no effort to clarify if the evidence given by the writer of the letter to Gillian Morphett of Ernst and Young and linked to this post was supported by Tanya Taylor. This post was written using the official committal transcript. In fairness to Tanya Taylor it is possible that this is just another example of someone from ACT Treasury being allowed to get away with committing perjury by the ACT Court system and the AFP. If this is correct, it’s even more proof that Aborigines are denied even the most basic of legal protections in Australia.
      What is even more interesting is that when the Commissioner put in a Public Interest Disclosure to ACT Treasury about the letter writer’s misuse of ACT Government stationary and resources to pursue his a personal agenda, in his response to Mr Glen Gaskell of ACT Treasury, as found in subpoenaed material from ACT Treasury, the writer of the letter to Ernst and Young said that Ernst and Young was aware that his request for documentation from the Commissioner’s personal file was personal and not sanctioned by the ACT Government. If this is correct, then Ernst and Young had absolutely no power to release that information under the National Privacy Principles. Interesting!

      3 Also, as I have said before, you’ll never get justice from the ALP

      Maybe I’ll never get justice from the ALP; all that means is that I will be fighting for justice until I drop. I never give up and eventually I’ll have the support I need to bring ALP racism and corruption to the attention of the world community.

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