Ernst & Young: A vehicle for hiding corruption in Canberra

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.