Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Link to this | Hansard source

In 2003 and 2004, Ms Sonja Scherer worked for the Sydney area consultative committee known as GROW. In May 2003, her chief executive officer, Mr Paul Goodwin, asked Sonja Scherer to get $30,000 for her budget for corporate social responsibility work through arrangements with the marketing manager and to remove money from several different line items in such a way that the Department of Transport and Regional Services would not detect it. She refused to do so. Mr Goodwin told her to forget it and that he would deal with it.

On 18 July 2003, Sonja Scherer and Paul Goodwin met with Will Jones from the Marine Discovery Centre in Bondi, Sydney. Mr Goodwin instructed Ms Scherer to assist Mr Jones to obtain $500,000 in funding for this project. On 23 July, Sonja Scherer discussed the project with Mr Jones further. Mr Jones produced a contract between himself and the Marine Discovery Centre which worried Ms Scherer because it said that income, including grants, to the Marine Discovery Centre could be used to repay outstanding consultancy fees to Mr Jones personally. Ms Scherer formed the view that the contract was retrospective and involved repaying a debt to Mr Jones which the Marine Discovery Centre was accumulating. She believed the Department of Transport and Regional Services would not fund the project, as it was repaying a debt and this was not allowed under the criteria.

On 28 July, she told her CEO, Paul Goodwin, about the contract. Mr Goodwin said, ‘Well, you don’t have to mention the contract.’ Ms Scherer said: ‘Yes, I do. I have to inform the department of anything I know.’ Mr Goodwin asked, ‘Have you informed them?’ He later said: ‘Leave it with me, but don’t say anything to anyone. This is an important project for the region for Peter King, and he supports the project so we should make sure it gets the funding.’ At the time, Peter King was the Liberal member for Wentworth. This conversation is evidence of Mr Goodwin’s willingness to withhold information from and deceive the Department of Transport and Regional Services, and for an apparently political motive.

Later that day Mr Goodwin told Ms Scherer to develop a business plan for the corporate social responsibility side of her job, and said, ‘I’ll look after Marine Discovery for you in the meantime.’ He gave her one week to complete the task then did not read the plan after she handed it in. In September 2003 Sonja Scherer informed Paul Goodwin that she had had several meetings with a Mr Larcombe from Liverpool council and was working with him on a hub for the area. Mr Goodwin listened and then said, ‘Good, good—but just leave that for a moment and concentrate on Macarthur.’ This smells of political bias by Mr Goodwin in favour of Liberal-held electorates. Liverpool council is not Liberal, but Macarthur is.

On 18 September Mr Goodwin and Ms Scherer discussed projects for the Macarthur area. Paul Goodwin said: ‘The projects need some work to make them fit the criteria and I am sure you’ll be able to do that—just do it so that the project fits the criteria. This is a good project and important for Macarthur. Pat Farmer supports the idea and we need to support this project.’ Paul Goodwin suggested that Ms Scherer just put down a figure in terms of council support for the project, without supporting information.

On 1 October Paul Goodwin asked Sonja Scherer how the Macarthur projects were coming along. Sonja said she was waiting for a marketing and business plan for the Cedar Creek apple orchard project. Paul Goodwin said: ‘Can’t you do it? Can’t you write the marketing and business plan?’ Sonja said she could not; she would not know what their plans were. Later, on 27 October, they visited the apple orchard, where Paul Goodwin told the Cedar Creek people that Sonja would make sure that the project got through—that is, get Regional Partnerships funding. Afterwards, Sonja reproached him for promising she would get the project funded, as she did not think it was a viable project. Paul Goodwin said, ‘Just put down the information needed to get it through.’

Early in November Ms Scherer visited the member for Macarthur and expressed concern about the viability of some of the applications for Regional Partnerships funding coming from Macarthur. Either the member for Macarthur or his electorate staffer Gavin Melvin advised Mr Goodwin of this visit. Paul Goodwin then summoned Sonja Scherer on 18 November, attacked her for visiting the member for Macarthur and ordered her not to do so in future.

Later in November there was a staff meeting which considered, among other projects, an application from Christine Gibbs-Stewart, who was a board member of GROW and an employee of the New South Wales business lobby group Australian Business Ltd, put forward on behalf of Australian Business Lawyers. One GROW employee, Claudine Moutou, suggested that the application represented a conflict of interest. Sonja Scherer said she thought the project represented an attempt by ABL to get money for work it was supposed to do already with its membership subscriptions.

After the meeting Paul Goodwin again attacked her, saying that ABL were good people helping other people and telling Sonja, ‘Do what I say or there is no future for you here.’ On 2 December 2003, Paul Goodwin said he was rearranging her job, taking her out of Macarthur and downgrading her job and her salary. Sonja was made redundant on 14 August 2004, but her position was readvertised weeks afterwards.

Given that what I have just outlined indicates that Paul Goodwin is unfit to hold the position of CEO of GROW, it would hardly be surprising if he were to deny much of what I have just said. As it happens, however, I have sighted a series of emails from within GROW which reinforce my concerns. First, there is a list of members of the various GROW teams, and it shows that a majority of the Regional Partnerships projects recommended for funding by the Sydney area consultative committee—known as GROW Employment Council—involved projects put forward by GROW board members and their associates.

This problem of insider trading was exacerbated by the farcical handling of conflict of interest issues within GROW, as my second set of emails shows. The GROW Project Prioritisation Board Subcommittee meeting of 18 November 2003 had just three members present. Mr Griff Lewis told the committee that the first application to be considered was from the GROW team of which he was a member. The committee resolved that there was no conflict of interest and recommended the project.

Christine Gibbs-Stewart said that the second application was from her organisation, Australian Business Ltd. It was agreed she should leave the meeting when it was being considered. That recommendation was deferred for a month. Christine again left the room and the project was recommended by the other three members. An earlier email from Christine Gibbs-Stewart to Paul Goodwin of 16 October proposing the project said:

Hi Paul, I am taking off my Board member hat and putting on my ABL hat—We have an idea for a project for GROW funding.

She outlines the project and then says:

Now I am putting on my Board member hat.

Other emails I have show that other staff members also had concerns. We now know how Regional Partnerships, sired by the member for Gwydir out of a desire to ward off Pauline Hanson and One Nation, degenerated in Queensland into a National Party slush fund and is now known as ‘regional rorts’.

But in Sydney it has been no better. It has been riddled with conflicts of interest and insider trading. There was no action taken by the minister, the department or the area consultative committees to promote or publicise Regional Partnerships to ensure that funding applications were not limited to those in the know. The Department of Transport and Regional Services made no independent check of applications recommended by area consultative committees to satisfy itself that conflict of interest issues had been properly resolved.

And poor Sonja Scherer, whose biggest mistake was to take seriously what she heard at a departmental training session in July 2003 about probity and due process in handling grant applications, ended up with the sack. She would not fabricate information on projects as her CEO demanded. To add insult to injury, she lodged an unfair dismissal claim in the New South Wales Industrial Relations Commission and it was defended for GROW by none other than ABL. I note that their managing director, Mark Bethwaite, has now become the federal treasurer of the Liberal Party.

What needs to be done to right this sorry state of affairs? Firstly, we need better whistleblower protection—or, as it is now better known, public interest disclosure legislation. The experience has been devastating for Sonja Scherer, who has not worked since. It is not easy when you cannot produce a reference from your previous boss. Secondly, this case needs to be added to the Auditor-General’s investigation of Regional Partnerships. It is now important that the Auditor-General examines the projects to which I have referred. Thirdly, there is a need for a proper resolution of conflicts of interest. The kind of situation where three board members sit down and approve each other’s projects does not cut it, whether or not people leave the room while their particular project is being discussed.

The government failed woefully to deal with these issues. It appointed the area consultative committee chairs and left them to make all of the other appointments. It would have done better to exclude board members from being applicants for Regional Partnerships money. There would have been fewer regional rorts if it had. The government needs to clean up the whole program or abolish it. There has been use of secret guidelines, political interference, waste of taxpayers’ money and ignoring of area consultative committee process. Australians deserve better. (Time expired)