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The Corruption and Crime
Commission (CCC) has today tabled in State Parliament a comprehensive report
into corrupt activity at the North Metropolitan Health Service (NMHS) that went
undetected for up to a decade.
The Report into bribery
and corruption in maintenance and service contracts within North Metropolitan
Health Service highlights serious misconduct at its most shocking – corrupt
relationships between the private and public sectors resulting in the gross
misuse and fraudulent misappropriation of hundreds of thousands of dollars of
public funds.
The Commission heard
evidence of corruption and serious misconduct involving public officers who:
• accepted
tens of thousands of dollars in gifts of interstate and overseas travel and
accommodation from contractors in return for awarding them work;
• accepted
tens of thousands of dollars in gifts of expensive restaurant meals,
entertainment, alcohol and other gratuities in return for awarding work;
• received
thousands of dollars in cash payments from contractors in return for awarding
them continued work;
• facilitated
contractors to fraudulently invoice NMHS to cover the costs of the corrupt
benefits of travel, accommodation, meals, entertainment and cash they received;
• colluded
with particular contractors in 'bid rigging' activities for the purpose of subverting
the WA Health and NMHS procurement processes; and
• a
senior public officer used contractors to renovate his private residence at a
discount and then facilitated the building contractors to fraudulently invoice
NMHS approximately $170,000 for works carried out on his private residence.
The Report recommends
that prosecuting authorities consider preferring criminal charges against three
former public servants (including a former Executive Director of Facilities
Management at NMHS and a former Executive Director of Perth Children’s Hospital
Service Integration) and no fewer than 10 private sector contractors.
Read the full media
release
Download the Report
Senior WA Health
bureaucrats corruptly reaped hundreds of thousands of dollars in gifts and
travel paid for by contractors in exchange for winning work on Government
projects, an explosive new report has found.
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.
"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 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."……
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.”
BACKGROUND
Public sector corruption
refers to the misuse of public power or position with an expectation of undue
private gain or advantage (for self or others). It may include:
bribery
embezzlement
fraud
extortion
trading
in influence
perverting
the course of justice
exchanging
goods for money or information.
Corrupt conduct can
occur directly through the improper or unlawful actions of public sector
officials, or through the actions of individuals operating in the private
sector who attempt to inappropriately influence the functions of
government.
Organised crime groups
try to corrupt public officials to gain access to public funds, information,
protection and other services to facilitate criminal activities. These
officials are likely to be from law enforcement agencies, border agencies, and
agencies that issue identification documents.
Corruption has a serious
impact on government, industry and national security. It prejudices the rule of
law and distorts markets. It can inhibit foreign investment and international
credit ratings and damages Australia’s reputation as a safe reliable economy in
which to invest and trade. It can also harm cooperation and relations with
foreign governments and law enforcement agencies.
Corruption of public
sector officials has substantial multiplier effects and benefits for organised
crime. There may be significant links between corruption in the public sector
and organised crime groups that, by their very nature, remain hidden. The key
challenge in identifying and investigating corruption is that corrupt conduct
occurs in secret, between consenting parties who are frequently skilled at
deception.
