State of secrecy over University of Queensland job loss

They fired a whistleblower but bribed him to stay silent about his job loss.  Big Bikkies, no doubt!  Taxpayer bikkies

THE University of Queensland will have us believe that Phil Procopis, the whistleblower in the uni's nepotism scandal, was made redundant simply because his department was restructured.

Procopis was the director of a unit known on campus as ARMS, an acronym for Assurance and Risk Management Services. ARMS no longer exists.

Procopis's position was abolished and he signed a confidentially agreement to receive his payout. Restructures happen. So does nepotism. So does secrecy.

Vice-chancellor Professor Paul Greenfield and his deputy Michael Keniger left the university after The Courier-Mail revealed a "close family member" [his daughter] of Greenfield had gained entry to the medical faculty without the proper entry requirements.

Greenfield denied any wrongdoing, saying the relative was admitted to the medical school as the result of a misunderstanding.

Procopis is central to the story because The Courier-Mail recently revealed he was the mysterious whistleblower who raised concerns about the improper admission with Chancellor John Story.

The scandal got a head of steam, I believe, because it shattered our perceptions that post-Fitzgerald Queensland was relatively free of cronyism and that our society had at last become a (cliche alert) "level playing field".  In a broader sense, it also challenged national ideals of egalitarianism and the fair go.

Until the university scandal, most of us naively believed Queenslanders were rewarded on merit. The truth was a little different. Now we know it will not harm your prospects to have friends or relatives in high places.

Nepotism exists in Queensland across business, the arts, law, medicine and even the media.  Premier Campbell Newman admitted it existed in government and shrugged his shoulders when asked what he was going to do about it.

The university controversy also got a head of steam because the venerable institution at first issued misleading press releases about Greenfield and Keniger leaving. Greenfield was forced out after the university commissioned an investigation by Tim Carmody, SC. Carmody's report remains secret and we don't even know for sure the name of the student at the heart of the affair.

The university made a mockery of the the new regulatory body, the Tertiary Education Quality and Standards Agency, by refusing to hand over the Carmody report.

TEQSA chief commissioner Dr Carol Nicoll told a Senate estimates hearing the uni would not release the document, claiming confidentiality and privilege.

Tertiary Education Minister Senator Chris Evans was cryptic, telling the hearing it was a "complex case", and not as "straightforward" as some suggest.  Was he suggesting universities are beyond the reach of Federal Cabinet?

Greenfield walked away with a payout of $952,000, reports tabled in Parliament revealed. His deputy, Keniger, a key figure in the imbroglio, also quit. He got $695,000.

The Crime and Misconduct Commission has completed its investigations into the scandal and its brief of evidence is in the hands of the Director of Public Prosecutions.

Meanwhile, the university has not released all the details surrounding the exit of Procopis. It should.

The academic committee set up to evaluate ARMS was chaired by Dr Len Gainsford from Victoria. It praised Procopis's unit and gave it seven "commendations".

"ARMS is widely respected by managers across UQ," it reported. "The unit consists of a committed and dedicated team." It said ARMS "responded well to governance initiatives" and its audits were "well regarded".

It added: "The introduction of a risk-management framework and development of commitment towards its progress has been effective."  Despite the glowing report card ARMS was abolished.

Vice-Chancellor Deborah Terry says the restructuring was the result of a "routine, cyclical" review initiated before the admissions scandal.

Terry says "it would be inaccurate and wrong" to link the role of Procopis in unearthing the scandal to his redundancy.

Procopis's redundancy and the disbanding of his department happened despite Terry announcing on May 17 that Procopis would have a central role in misconduct matters under a package of governance reforms.

Terry told The Courier-Mail recently that at the time of her May announcement, "the proposed reorganisation ... had not been finalised".

In a letter to staff she added: "The review and the re-organisation were unrelated to the fact that Mr Procopis communicated to the Chancellor information he had received (about the scandal). It was entirely appropriate for Mr Procopis to do this, as UQ policy identified his position as a receiver for disclosures of this nature."

As the only ARMS employee made redundant, Procopis must be feeling unlucky. An insider tells me Procopis never wanted to be a whistleblower. He was just doing his duty.

Until recently he was also chair of the Crime and Misconduct Commission's audit committee.

Who tipped him off remains a mystery. "The university will not disclose their identity," says Terry.

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Canada spy case rocks Australian spooks

AN ALLEGED Canadian spy has compromised Australian intelligence information in an international espionage case that has sent shock waves through Western security agencies.

Jeffrey Paul Delisle, a naval officer, is alleged to have disclosed a vast trove of classified information to Russian agents on a scale comparable to the alleged handover to WikiLeaks of United States military and diplomatic reports by US Army private Bradley Manning.

Sub-Lieutenant Delisle's activities have been the subject of high-level consultation between the Australian and Canadian governments and were discussed at a secret international conference in New Zealand earlier this year.

Much of the information allegedly sold to the Russians was more highly classified than the disclosures attributed to private Manning, and included signals intelligence collected by the "Five Eyes" intelligence community of the United States, United Kingdom, Canada, Australia and New Zealand.

Australian security sources have privately acknowledged that the security breach compromised intelligence information and capabilities across Western intelligence agencies, especially in the US and Canada but also including Australia's top secret Defence Signals Directorate and the Defence Intelligence Organisation.

Australia's High Commissioner to Canada, Louise Hand, was briefed by the Canadian government on the case shortly after Delisle's arrest on January 14.

Information released under Australian freedom of information laws shows Ms Hand discussed the case with Stephen Rigby, National Security Adviser to Canadian Prime Minister Stephen Harper. But her cabled report, classified "secret - sensitive" and sent to Canberra on January 30, has been withheld in full on national security grounds.

The Australian Security Intelligence Organisation was also briefed on the Delisle case through liaison with its counterpart, the Canadian Security Intelligence Service, which also discussed the matter at a security conference attended by ASIO in NZ in February.

Another Australian diplomatic cable dated February 1 that refers to the case has also been withheld in its entirety.

Delisle worked at the Royal Canadian Navy's Trinity intelligence and communications centre at Halifax, Nova Scotia. He previously worked at defence intelligence headquarters in Ottawa. He was arrested after the Canadian Security Intelligence Service concluded he was passing classified information to Russian operatives.

Although Canada has for diplomatic reasons avoided publicly identifying Russia as the foreign power involved in the case, several Russian diplomats in Canada were recalled to Moscow before completing their postings.

Delisle is accused of communicating classified information to an unnamed foreign entity between July 2007 and January 2012. He faces possible life imprisonment.

His information access reportedly covered signals intelligence produced by the US National Security Agency, the UK's Government Communications Headquarters, Canada's Communications Security Establishment, Australia's Defence Signals and NZ's Communications Security Bureau.

An Australian security source told The Age that Delisle's access was "apparently very wide" and that "Australian reporting was inevitably compromised".

"The signals intelligence community is very close, we share our intelligence overwhelmingly with the US, UK and Canada," one former Defence Signals Directorate officer said.

A former Australian Defence Intelligence Organisation officer and now adjunct professor at Macquarie University, Clive Williams, said: "Close intelligence relations inevitably result in some overlap in espionage cases, because of the very extensive sharing of information."

An Australian Defence Department spokesperson said that "consistent with long-standing practices, the Australian government does not comment on intelligence matters".

Delisle will appear before the Nova Scotia Supreme Court for a preliminary hearing in October.

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Members furious over union spending

UNION members have reacted with fury to revelations that millions of dollars of their money found its way into the coffers of the union boss Michael Williamson and his family.

The Temby report, an internal investigation into allegations of corruption within the union leaked to the Herald, revealed that companies controlled by Mr Williamson and his family received $5 million from the union over the past four years.

The report revealed that Canme, the company of Mr Williamson's wife, was paid $385,000 from 2005 to 2009, but that amount could be as much as double, as the Herald understands Canme was being paid up to $15,000 every two months from about 2000. Mr Temby raised questions as to whether the work was actually performed.

While the average salary of Health Services Union members is between $50,000 and $60,000, Mr Williamson was collecting more than six times that amount. His union salary was revealed to be $395,000; on top of that he received another $150,000 from union-related board positions.

Mr Williamson received a 25 per cent pay rise last year. He achieved only a 2.5 per cent rise in wages for his members.

It is understood that the union's administrator has cut off Mr Williamson's salary and payments, including the $1000 a day he was charging the union for legal costs while dealing with ongoing police matters, including the legal dispute over the contents of Mr Williamson's bag which was seized during a police raid on union headquarters.

Law enforcement sources have indicated that the prosecution of any HSU official could prove difficult as there were no corporate governance regulations in place within the HSU East branch and trade unions are "registered associations" under the Fair Work (Registered Organisations) Act.

"If he was director of a company it would be a completely different matter," a police source said.

"The use of company funds to buy personal benefits by a director is prohibited," said James Lonie, a partner at Henry Davis York. "Time and time again, courts have held that personally benefiting through the misappropriation of company funds is simply wrong." For breaching their director's duties, company directors face fines of up to $200,000, and if the director has been reckless or intentionally dishonest, imprisonment for up to five years, he said.

The opposition spokesman on workplace relations, Eric Abetz, yesterday criticised the government for not instituting tougher penalties against unions. "We moved an amendment in the Parliament to ensure the same penalty applies to union bosses as apply to company directors [five years imprisonment and a $200,000 fine] if members' funds were misappropriated. Labor, the Greens and Craig Thomson voted it down. You've got to ask: if this is a one-off, why won't they increase the penalties?"

Senator Abetz said that Labor's penalty of a $6600 fine was insufficient. "How is a small fine an effective deterrent from a multimillion-dollar rip-off?"

Vandy Kang, a former HSU-east member and a drug and alcohol counsellor in Surry Hills, quit the union in disgust just before Christmas last year.

"It makes me angry and very upset. We are lower-paid workers and have paid the union for years and years, so to hear of the misuse of union fees is very hurtful to me," he said. "This is a democratic country. How can you let this group of people abuse members' fees for so many years?"

Meanwhile, a union organiser, Bob Hull, yesterday launched his election campaign to run the union when a ballot takes place later this year. "Of all the other tickets running in this election, the Bob Hull and the Members First Team is the only one not of self-interest, we aren't running for the ALP or Kathy Jackson. We are running for the members," Mr Hull's press release said.

Ms Jackson was in the Federal Court seeking to overturn last month's decision to appoint the retired judge Michael Moore as the administrator of the union.

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Time for more competition in the taxi industry

DOES changing the government make much difference? Both sides of politics always assure us it will. But judging by the infrequency with which we do change, we seem doubtful.

At the state level the national swing from Labor to the Coalition is almost complete, providing a good opportunity to test the question. And a good test is the regulation of industry.

Despite both sides' protestations of undying concern for the welfare of ordinary voters, it gets harder to avoid the suspicion that governments regulate industries for the benefit of the businesses rather than their customers.

Take the case of taxis. We've been dissatisfied with the service provided by taxis for many a moon. They're expensive, but often don't offer good service: they're too hard to find at certain times, they don't turn up or take far too long to arrive. Too many drivers don't know where to go, or are unfriendly.

But the outgoing Labor government did far too little to improve the position. It got so bad in Victoria the Baillieu government promised action and appointed Professor Allan Fels, former chairman of the Australian Competition and Consumer Commission, to conduct an inquiry. The government is now considering his final report.

The taxi industry is highly regulated. What's the goal of this regulation? It's supposed to be to ensure we're provided with a safe and reliable taxi service at a reasonable price. In practice, the goal has evolved into the protection of a highly lucrative financial investment, the taxi licence plate.

Since about the time of the Depression, governments have sought to control the number of taxis by issuing a limited quantity of licence plates. Initially, and for many years, these licences were issued free to people wanting to drive taxis.

Because the supply of licences was limited relative to the demand for them, licence plates became valuable in their own right. They exist in perpetuity, and people who'd been given one by the government were able to sell it to someone else.

That someone may be a person who wants to drive a taxi, but doesn't have to be. And ownership of taxi plates doesn't imply ownership of the car to which those licence plates are screwed. You can ''assign'' (rent) the plates to a taxi operator for a fee, who buys the car and puts it on the road. Operators may drive the car themselves, or they may get others to do the driving.

Thus did the taxi licence plate transform into a valuable financial investment, with an active market in their purchase and sale. According to Fels' interim report, the value of plates has been rising for years and Melbourne plates now change hands for up to $490,000 a pop.

Licences are assigned to operators for a fee of about $35,000 a year, thus yielding a direct return to their owners of about 7 per cent. Allow for capital gain and the overall return rises to about 16 per cent a year.

Not a bad investment. Now get this: according to the Fels report, in 1985 only about 4 per cent of Victorian taxi licences had been assigned to others. By 1998, about 45 per cent of metropolitan licences had been assigned. And by December last year it was up to about 70 per cent.

Because assignment fees are so high, not enough income is left for taxi operators and even less for drivers. Taxi fares are controlled by the government and the need to pay drivers more - they get an average of about $13 an hour, according to Fels - is often used to justify fare increases. But every time fares increase so do the assignment fees charged by the licence owners, justifying a further rise in value of licences.

Fundamentally, however, what causes the rising value of licences is their growing scarcity relative to demand. Who is it that limits the number of licences on issue? The government. Who does this benefit? The owners of licence plates. The industry is being regulated largely for the benefit of absentee landlords, so to speak.

Taxi drivers get a terrible deal. They generally get 50 per cent of their take, but they're not employees and have to bear many costs themselves. They get no workers compensation cover, no holidays or superannuation and have to pay the goods and services tax.

Is it any wonder the quality of drivers is often poor, turnover is high and it's hard to get recruits? And yet most of our complaints about taxis relate to the performance of drivers.

Fels' key proposal is for the government to issue new taxi licences to any qualified person for a fee of $20,000 a year. New licences would not be transferable and issued only to owner-drivers. This would make it easier for drivers to become owners. It would force the existing licence plate owners' assignment fee down to $20,000 a year, still leaving them a reasonable return, but lowering the capital value of their plates to about $250,000.

Taxi operators would benefit from the lower assignment fees and this would allow the drivers' share of their take to be raised to 60 per cent. This, in turn, would justify making greater demands on drivers, including requiring them to pass a more stringent street and location knowledge test.

Now you see why licence-plate owners are opposing these reforms so vigorously. We'll see if Ted Baillieu stands up to them with any more fortitude than his Labor predecessors.

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