Note that most of this took place under the former Liberal government...
Health authorities siphoned hundreds of thousands in cash and gifts, CCC probe finds
Key points:
- Three senior health bureaucrats and almost a dozen contractors caught in corruption probe
- Report says contractors offered gifts, cash and travel in exchange for work
- CCC fears the behaviour may extend beyond the North Metropolitan Health Service
One senior bureaucrat allowed contractors to fraudulently bill the North Metropolitan Health Service (NMHS) for $170,000 in renovations carried out on his private home, while he and another accepted benefits that included overseas travel, restaurant meals, entertainment, cash bribes and alcohol in exchange for the awarding of government contracts.
The Corruption and Crime Commission began investigating after a tip-off from a junior whistleblower within the department in 2014.
Its report recommends charges be considered against three former senior health bureaucrats and nearly a dozen contractors, for what was described as sustained efforts to engage in and cover up bribery.
The report named former NMHS executive directors John Fullerton and David Mulligan, as well as former facilities development manager Shaun Ensor, as the bureaucrats involved in the corrupt conduct.
Photo: John Fullerton (centre) awarded departmental work to contractors who paid him thousands of dollars worth of travel, cash and meals. (Facebook: Luke Fullerton)
Culture of corruption
"This report details more than a decade of corrupt conduct reaching into senior levels within WA Health," the CCC report stated.
"It exposes a culture of contractors freely giving gifts and benefits to public officers, with the expectation of thereby winning work and recovering the costs of the gifts through fraud.
"The brazenness of the conduct, the number of contractors involved and the apparent indifference by all concerned … raises concerns about whether this behaviour is confined to NMHS."
The report uncovered extensive efforts by contractors to shower Mr Fullerton with gifts and other benefits in exchange for government work.
Examples of corruption found by the CCC:
- Lavish lunches at restaurants including Nobu, Rockpool and Coco's totalling more than $50,000
- A three-week business-class trip to the UK for Mr Fullerton and his wife, Jacqui
- A business-class trip for the Fullertons to Canada to attend their son's wedding
- A three-week US holiday for Mr and Mrs Fullerton
- Annual trips to Melbourne for Mr and Mrs Fullerton
- Trips to Canada, Bali, Hong Kong, China and Dubai for Mr Fullerton and his wife
- An all-expenses paid trip to the UK for Mr Mulligan
- A night at the Galaxy nightclub including paid hostesses
- Melbourne Cup lunches and AFL grand final tickets
- Gifts of cologne, shoes, business suits and shirts worth thousands of dollars
- Cash payments of more than $25,000
Over about a decade, Mr Fullerton received thousands of dollars in cash and $150,000 in gifts including flights, meals, perfume and clothes paid for by contractors, according to the report.
"In return, those contractors obtained regular work at NMHS," the report stated.
"For the majority of contractors, this was the price of doing business with Mr Fullerton."
Expensive lunches recouped in invoices
One contractor recouped the costs of expensive lunches with Mr Fullerton by inflating monthly invoices to NMHS, something the report found was the bureaucrat's idea.
Photo: Contractors regularly took the Health Department executives out for lavish lunches. (Pixabay: mstevencox)
As well as the regular lunches and being paid a $10,000 bribe, Mr Mulligan also had a contractor pay for AFL grand final tickets and recovered money for interstate and overseas trips from NMHS.
The other former bureaucrat, Mr Ensor, is alleged to have had lavish lunches paid for by one contractor who was bidding for Government work over which he had control.
The CCC report revealed WA Health investigated procurement practices in the NMHS between 2014 and 2015 but did not identify the misconduct of the senior executives, with that probe not examining the conduct of any particular staff member.
"NMHS had proper policies and procedures in place. These were ineffective to prevent what happened," the report found.
"Corrupt relationships became firmly established. Warning signs were left unexplored."
The CCC said prosecution should be considered for 10 contractors involved in the corruption, as well as the three senior bureaucrats.
"On occasion, money added to NMHS invoices [was] purely for greed rather than to recoup money spent on 'gifts'," the report stated.
CCC commissioner John McKechnie said covert surveillance discovered some of those involved discussing plans to destroy evidence and create falsified records to cover up their wrongdoing.
"It's staggering, the extent of this in North Metro Health and the fact it has continued for so long," Mr McKechnie said.
"We think serious consideration should be given to prosecuting not only the public officers but some of the contractors."
Behaviour 'abhorrent': Health Department
In a statement, the Health Department said it accepted the "shocking" findings of the report into the "deplorable and abhorrent" actions of its staff.
"I am deeply disturbed by the deliberate steps these senior NMHS public officers took to covertly deviate from rigorous procurement policies and procedures to manipulate processes for personal gain," director general David Russell-Weisz said.
He said the department had updated its policies relating to the acceptance of gifts and hospitality, but it was "challenging to prevent" the type of deceptive behaviour outlined in the report.
Photo: The corruption took place within senior levels of the Health Department, the report found. (ABC News: Jacob Kagi)
A significant portion of the misconduct occurred while Dr Russell-Weisz was directly in charge of the NMHS in a former role, but he rejected suggestions he should have known about what was occurring.
"I think it would have been difficult to know because if they are covertly getting away from a policy and procedure that was in place, it would have been very difficult … to have known that," he said.
Dave R.
