Citizen Journalism

More on the Reith Telecard affair

In From the Archives, Margo Kingston, Telecard Affair on January 8, 2013 at 6:49 AM

By Margo Kingston
Source: Webdiary SMH
Date: October 30, 2000

Main players in the Telecard Affair.

On Friday, October 20, the pollies perks minister Senator Chris Ellison awoke to the Herald’s publication of an explosive document which raised yet more questions about his administration during the Reith Telecard blowout.

We obtained the document on Thursday, and on the same day, I wrote to him as follows:

Senator Chris Ellison,

Special Minister of State,

Canberra

Dear Sir,

RE: PETER REITH’S TELECARD.

I request answers to the following questions by close of business today.

(1) When did you first become aware that present or former staff of Mr Reith had been using Mr Reith’s Telecard?
(2) What action did your take upon learning of this unauthorised use of Mr Reith’s Telecard?
(3) On what date were your first informed that the Australian Federal Police would be called in to investigate?
(4) On what date did you inform Mr Reith that police could be called in?
(5) On what date did you inform the Prime Minister that police could be called in?

Yours sincerely,

MARGO KINGSTON

Chief of Staff, Sydney Morning Herald Canberra bureau

That night, Senator Ellison replied through his media adviser that he would not answer any of the questions because federal police investigations had been reopened that the matters raised in my questions were “operational matters”.

Oh Really. The AFP are not investigating Senator Ellison’s behaviour, unless he is suggesting that he, too, could have been guilty of a criminal offence. Indeed, no-one is investigating government management of this scandal up until the day the Canberra Times blew the lid off the coverup.

The confidential memo shows that the Finance Department advised Ellison in September that a massive fraud had taken place, and that the AFP would investigate.

Are we to seriously believe that he advised neither John Howard’s office or Peter Reith of this nightmare? John Howard sacked David Jull from the ministry during the travel rorts affair because he had failed to advise him of a major discrepancy in Transport Minister John Sharp’s travel claims (a mere $8,000).

Yet Howard says he knew only in May (although he has not ruled out, yet, anyone in his office knowing earlier) and Reith says he knew of the fraud in April this year.
Reith says it was he who advised the PM, who then referred the matter to police.

So why the seven month delay before the police were called in, given that the September memo shows Fiance had got the basic information, including the fact that one user (Mr Y) had made 2,176 calls worth $13,949, that 700 calls were from overseas, and that two users were “former staff of Mr Reith”. Ellison won’t say, and when we asked Ellison for all Finance documents on the Reith Telecard he says to wait until our freedom of information application is processed.

The law states that Telecards must be used by the MP personally, and the memo reinforces this by revealing that Telecards and pins are delivered to each MP personally “sealed in a double envelope to prevent anyone but the senator or member seeing the number”.

So what did Ellison do when advised of this breach by Reith in giving his pin to former staff members? He won’t say.

When the memo story broke on October 20, lots of journos asked Ellison’s office lots of questions. Ellison – who’s cowardice has seen him hide behind his media adviser throughout this scandal – waited until after 7pm to reply, when just about everyone had gone home. He also locked his office door so noone could query the press release one of his minions distributed to the press gallery. Again, he answered none of the questions asked.

This is his statement:

The Department of Finance and Administration’s brief to me, dated 8 September 2000 (MARGO: It was September 1999) stated that there was an internal audit already under way, followed by a possible reference to the Australian Federal Police.

As you can see from the wording of the brief itself:

“It is proposed that the AFP will be provided with this information when it has been gathered with a view to ascertaining whether it will investigate this matter”. (MARGO: He underlined “when it has been gathered”.)
The Departmental brief did not recommend immediate reference to the police.
As is entirely appropriate, the Department rigorously conducted this investigation (MARGO: which Ellison rigorously refuses to publish) under the established procedures. It did so with my full support.
The very documentation that has been circulated by the Herald on its website gives lie to the allegations of a cover up.”

Wow!. How mindless. Let’s hope its not effective. This press release, by the way, has still not found its way onto Ellison’s Web site’s press release archive.

There are other questions, some of which I’d previously put to Ellison in writing.

Reith has constantly alleged that Finance told him it would have paid a $1 million bill on his Telecard without question. I asked Ellison and Finance chief Peter Boxall when this no questions asked policy began and on whose directions. Boxall failed to reply, Ellison claimed that this was all due to a Bolkus direction when he was the responsible minister in 1991. This is untrue. Bolkus directed – after pressure from now Liberal minister Bronwyn Bishop – that Finance not get the Telecard accounts, to protect MPs privacy. Instead, Finance got the total bill. The no questions asked mystery remains. The leaked memo increases then importance of this question being answered, as it revealed that Telstra had warned Fiance of the overuse of Reith’s Telecard on July 17 1998, a year before another Telstra office blew the whistle which triggered the investigation. Howard then claimed Finance had checked the account against Reith’s whereabouts and confirmed that Reith was in Western Australia at the time calls from WA were made. So why not saves themselves the hassle and give Reith a call instead?
Then there’s the revelation by John Howard that Finance had asked Peter Reith long ago to pay back the $50,000. They’d told Reith they would issue a debit notice. They didn’t. Why not, Senator Ellison, and why have Reith and Howard consistently claimed that Reith had no obligation to repay, when Finance clearly thought he did?

Finally, and here’s where Ellison’s administration gets seriously insidious, you’ll recall that after Miss X outed herself and made serious allegations of deficiencies in the AP investigation, the PM sent the new material back to the Solicitor-General David Bennett QC for supplementary advice on whether Reith and son had any civil liability to repay.

Bennett had previously opined that he believed Paul Reith, not Miss X. But Miss X revealed that the police had systemically failed to seek corroboration of her evidence. She also alleged that the AFP had failed to report that she had told them a person from the government called her flatemate Mr Y in 1994 telling her to stop using the card.

Bennett, in running a mile from his previous advice by stressing her was not responsible for the quality of the investigation, still came down on Paul Reith’s side, citing a minute from Finance that it had non record of such a call.

But the leaked memo revealed that far from the lack of a record bolstering Paul Reith and harming Miss X’s credibility, the opposite was true. It appeared that Finance may have deliberately misled Bennett, to bolster Paul Reith. I wrote to the Attorney-General, on October 20:

Mr Daryl Williams QC

Attorney-General,

Canberra.

Dear Sir,

Re: Reith Telecard

I refer to the Solicitor-General’s supplementary advice dated October 18. In maintaining his view that Miss X was not a credible witnesses, he relied in part on a minute from the Department of Finance concerning Miss X’s claim that a woman from the government had telephoned her home in 1994 to advise that the Reith Telecard should no longer be used.

That minute stated “no evidence of any such contact by the department was found” in Department records. “We have checked the available departmental files on hand and are unable to locate any evidence of such contact”.

Do you consider it a relevant omission in the Finance minute that Mr Bennett was not advised, as Finance had advised Minister Ellison in a ministerial briefing note on September 8 1999, that:
“We have sought to collect the relevant internal documentation from our files to understand the sequence of events. Due to the length of time that has elapsed since Mr Reith was first issued with a Telecard, some documents may be difficult to source or no longer exist.”

The document can be viewed in its entirety on http://www.smh.com.au. Will you consider drawing this omission to the attention to the Prime Minister with a view to further briefing Mr Bennett?

Yours sincerely,

MARGO KINGSTON

Chief of Staff, Sydney Morning Herald Canberra bureau.

Copy to Mr Bennett.

Williams refused to comment. So did Ellison. So did Finance.

Let’s hope Labor asks Ellison for answers in question time today.

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  1. If I had the gift of Shakespeare and decided to write a play on the Reith telecard affair I would be challenged in deciding who would play the fool, the idiot and the clown from my choices of Daryl Williams, Chris Ellison and Finance.
    All three have demonstrated extraordinary skills to play every single one.

    The part of the fall guy is played, as always, by the public.

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