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Joint Standing Committee on Electoral Matters - 03/07/2012 - Australian Electoral Commission analysis of the Fair Work Australia report into the Health Services Union

O'NEILL, Ms Bernadette, General Manager, Fair Work Australia

Committee met at 14:00

CHAIR ( Mr Melham ): I declare open this public hearing of the Joint Standing Committee on Electoral Matters, inquiring into the Australian Electoral Commission's analysis of the Fair Work Australia report on the Health Services Union national office. I will take a moment to outline the background to this inquiry. After a lengthy investigation, the FWA completed its report in March 2012. The FWA report examined the administration and expenditure of the HSU national office. It also made adverse findings about Mr Craig Thomson MP, who was the national secretary of the HSU before being elected to the federal parliament in 2007. The Special Minister of State sought the advice of the AEC on whether there had been any failures to comply with the provisions of the Commonwealth Electoral Act, as disclosed by the information in the FWA report.

On 16 May, the AEC responded to the Special Minister of State with a 22-page document that contains the AEC's consideration of the FWA report. The AEC stated: 'In summary, the document concludes that most of the expenditure described in the FWA report has been disclosed by relevant entities under the Electoral Act, with queries surrounding four payments totalling $17,014.88.' The AEC's response to the Special Minister of State also included a list of matters for considerations to address limitations in the Electoral Act. The AEC's submission to this inquiry contains an addendum to its analysis which addressed the four payments. The AEC noted that, while some components of the payments were not disclosed, the HSU had made reasonable attempts to disclose electoral expenditure that it was able to identify from incomplete records at the time. The AEC concluded that, given the difficulties with availability and accuracy of records, it has been unable to identify any public interest that could result in action being now initiated against the HSU national secretary, Ms Kathy Jackson, in relation to the apparent failure to fully disclose three items of expenditure.

Witnesses and members are reminded that this hearing is not intended to be a forum to rehash all the allegations contained in the FWA report. The matters contained in the FWA report and pertaining to Mr Thomson have been and continue to be investigated in different forums. The committee and witnesses' time will be best spent on the facts and investigations undertaken that are relevant to the committee's terms of reference. If a question of relevancy arises, it will be determined by the committee. The evidence given today will be recorded by Hansard and will be covered by parliamentary privilege. I remind members of the media who may be present at this hearing of the need to fairly and accurately report the proceedings of the committee.

I welcome our first witness. I advise that these hearings are legal proceedings of the parliament and therefore have the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. Thank you for appearing today to assist the committee with its inquiry. Do you wish to make any opening remarks?

Ms O'Neill : No, Chair.

CHAIR: We have been asked by the Special Minister of State to look at the issues concerning the operation of the Electoral Act in light of the advice from the Electoral Commissioner, which might be considered for possible remedy. I suppose my interest, Ms O'Neill, is in whether there are any remedies that we should be looking at in relation to the act that you oversight and that could also assist in relation to the principles that we are looking at in terms of electoral disclosure and timely reporting. If you are unable to provide any advice in relation to that and need to take that on notice, please feel free to do so. But it seems to me that there might be other acts that we should be looking at in conjunction with the Electoral Act.

Ms O'Neill : I will take it on notice. It is not something that I have turned my mind to prior to appearing this afternoon. You may be aware that there are amendments to the Fair Work (Registered Organisations) Act 2009 which have just passed through the parliament. They go to some of the issues with the registered organisations act, particularly those relating to disclosure. That will have some impact, and—

CHAIR: Are you able to say what those are, just for the record for this inquiry?

Ms O'Neill : In very broad terms, there are two which are probably of most relevance to this committee. One is to provide me as general manager with the capacity to disclose information obtained through the conduct of inquiries and investigations into the registered organisations act to other bodies, such as police, where it would assist with the enforcement of or compliance with a law of the Commonwealth, a state or a territory. So that is a significant change.

The amendments also increase the obligations in relation to disclosure. What I mean by that is that rules of registered organisations will need to make provision for greater disclosure about matters, including remuneration of certain officers but also in respect of transactions where there is some personal interest or related party transactions. So those amendments are welcome, and I think that they will enhance disclosure under the registered organisations act.

Senator RYAN: I am more familiar with the Electoral Act than I am with the Fair Work Act. Ms O'Neill, could you take me through what records you have access to of the HSU with respect to your investigation of what we are interested in, which is basically chapter 7 of the report? What records did you have access to? I know there were comments about incomplete records and what records you could not locate or get access to.

Ms O'Neill : I need to be clear from the outset that the investigation was conducted by my delegate, so I am not going to be in a position today to itemise or particularise particular information and the basis upon what was obtained and what was not. What I can say is that the powers of the delegate through the powers conferred on the general manager provide, in the conduct of an inquiry and then an investigation under the registered organisations act, information to be obtained from officials and employees and former officials and employees of a registered organisation under compulsion following the service of a notice. In very broad terms, I can say that to a large extent the evidence obtained during the course of the investigation into the national office of the Health Services Union was obtained by voluntary means rather than by the use of the available coercive powers under the registered organisations act. I am not sure if that assists, but—

Senator RYAN: It does; thank you. Are those notices served by the delegate?

Ms O'Neill : They are.

Senator RYAN: And there are obviously various legislative procedures that must be met in order for a delegate to serve—

Ms O'Neill : The particulars of the notice need to be complied with, yes.

Senator RYAN: I might put some further questions on notice. I am conscious that it was your delegate. One of the concerns around further regulation of political parties is that many officials are volunteers. Parties are also highly decentralised organisations, at least in the Liberal Party's case. So the ability of an official to know exactly what is going on in a branch in a particular suburb of one of our cities, particularly when you go through divisions and then to the national headquarters, is limited, unless they undertake an investigation. When you are acting as the registrar of a registered organisation, is there what you would call a very good record of compliance—everything from filing returns to all the boxes being ticked by the organisations you oversee, for lack of a better word?

Ms O'Neill : The way the scheme works under the registered organisations act is that, if you take a union or an employer association, the legal entity is the organisation. The obligations to prepare and lodge various reports, such as financial reports, fall on what are called reporting units. The best way to describe that is to say that in most cases, if you take a union, each branch of the union would be a reporting unit for the purposes of compliance with the reporting obligations. So each branch has a responsibility in its own right to prepare and lodge its financial returns.

In terms of the extent of compliance with the obligations under the registered organisations act, our experience is that compliance is generally very high. We are, perhaps unsurprisingly, undertaking major reviews of a number of our own processes and approaches, but our very strong view is that compliance is very high across registered organisations, including those with that decentralised model of reporting units.

Senator RYAN: As part of that program you are not surprisingly undertaking—your words, not mine—a look into the completeness of records of registered organisations? It was an issue in this particular investigation that not all records were available for use and for examination. Is that one of the things in particular you are looking at?

Ms O'Neill : I think the issue there is that the scheme of the act basically imposes obligations on the reporting units to prepare and lodge certain documents. Documents are, in the main, filed and lodged in accordance with the act and they are then scrutinised against the obligations under the legislation. Where documents are not prepared, filed and lodged with Fair Work Australia as required, it then becomes an enforcement issue.

Senator RYAN: If documents are prepared and lodged to the requirements of the Fair Work Act and meet your requirements, Fair Work Australia does not lift the veil. For your purposes in enforcing that law, the completeness of records held by, for example, the HSU or any other organisation that might otherwise be investigated by the AEC is not an issue of your concern. Is that right?

Ms O'Neill : If documents are lodged with us, they are scrutinised to ensure that they comply with the obligations. But if they are not lodged or they do not comply then in broad terms that is likely to be a contravention of the registered organisations act and it would be open to us to—

Senator RYAN: If they supply the documentation that is required by Fair Work Australia and comply with that requirement, you do not look at the documents that underpin that, whether it be receipts, bills or invoices? You do not take the next step and look at those unless there is a non-compliance issue?

Ms O'Neill : And that is because essentially the mechanism to ensure the quality, if you like, or the accuracy of the documents rests on the obligations for the records to be audited in accordance with the Australian accounting and auditing standards and required to be signed off by the auditor. There are relevant obligations on the auditors regarding those issues under the registered organisations act.

Senator RYAN: There was some debate, and you have alluded to it, regarding the amendments currently before the parliament, which I do not think were passed last week with the range of guillotines we had in the Senate. That was about Fair Work Australia's ability to share information with other agencies. At the moment, is it your view that you cannot share information you gain in an investigation with another agency—for example, Victoria Police or the Australian Electoral Commission?

Ms O'Neill : In broad terms, that is right.

Senator RYAN: I do not ask for a copy, but did you have legal advice which you relied upon? I know it has been debated and I know that there was at least some legal advice published that that was not the case.

Ms O'Neill : I released publicly the legal advice that I obtained, and it was obtained by Mr Robert Orr, Chief General Counsel of the Australian Government Solicitor. That is available through our website.

Senator RYAN: Is it your view, if you are able to comment, that the amendments before parliament attend to that?

Ms O'Neill : Yes. To paraphrase the advice that I obtained, given that the act makes express provision for referral of a matter to the Commonwealth Director of Public Prosecutions at the conclusion of an investigation, that was the mechanism that parliament intended to apply. So, given that mechanism is only available at the conclusion of an investigation, there is a significant advantage in a broader power or discretion to authorise disclosure of information obtained at an earlier stage, rather than having to wait for the conclusion of an investigation.

Senator RYAN: In your view, does the bill before the Senate do that?

Ms O'Neill : That is my understanding.

Senator RYAN: Does Fair Work Australia have the capacity to issue what would commonly be referred to as on-the-spot fines or administrative penalties for noncompliance? Or must it take legal action under the current laws for, for example, a union that does not comply with the requirements of the act?

Ms O'Neill : There is no such power.

Senator RYAN: You would have to take legal action?

Ms O'Neill : Yes.

Senator RYAN: In the Federal Court?

Ms O'Neill : Yes.

Senator RYAN: Chair, I will hand over to a colleague to ask questions.

CHAIR: We will pause while Mrs Bishop prepares.

Ms O'Neill : May I expand on an answer that I provided earlier, when you asked about a summary of the provisions of the bill before the parliament. The one that I did not mention that may be of particular interest is the power that is held to compel the production of documents or to require a person to attend for an interview and answer questions. I mentioned that that is currently in respect of employees and officers of registered organisations and former officers and employees. As I understand it, one of the other amendments expands those powers to third parties.

CHAIR: In return for that compelling, does that mean that the evidence that they might give to you cannot be used against them?

Ms O'Neill : In broad terms, and this is not in respect of the amendments but under the current registered organisations act, if information is obtained through the exercise of the compulsory powers, that material cannot be used in evidence against the individual who was compelled to provide it.

CHAIR: If they come along voluntarily and provide you with evidence, that can then be used against them?

Ms O'Neill : Or if information is obtained in respect of another person, the privilege.

CHAIR: That should be on the record.

Mrs BRONWYN BISHOP: Just to clarify that point, did anybody give evidence under compulsive powers?

Ms O'Neill : I mentioned a moment ago that I have some difficulties today in the sense that, as you know, the investigation was conducted by my delegate rather than by me, so I may not be able to answer in great detail as to the investigative processes and procedures that were followed. I have indicated that most of the evidence that the report is based on was obtained through voluntary means and not the exercise of compulsion, but some of the evidence was gathered through the exercise of compulsive powers.

CHAIR: Could you come back to us with a supplementary submission answering some of these questions?

Mrs BRONWYN BISHOP: I do not quite believe you feel pressure on this. I am somewhat amazed that Mr Nassios is not here today. Could you tell me why he is not here today?

Ms O'Neill : Mr Nassios is on leave until early next year. That leave was sought and approved in August last year.

Mrs BRONWYN BISHOP: Didn't we go through this process with the estimates committee? Wasn't he on leave and didn't they find out after they had stopped having that session of estimates that he could have come because he is here anyway?

Ms O'Neill : No invitation was extended by the committee to Mr Nassios to attend at the last estimates hearings. That was the point that I made.

Mrs BRONWYN BISHOP: Did we not ask Mr Nassios to come today?

Ms O'Neill : Not that I am aware of.

Mrs BRONWYN BISHOP: Was there any particular reason we did not ask Mr Nassios? Did we just assume he would be here?

Ms O'Neill : I do not think I can answer that.

Mrs BRONWYN BISHOP: I ask that question of you, Mr Chairman. Did we assume he would be here?

CHAIR: No. There was no assumption made that he was here. An invitation, as you know, was extended to Fair Work Australia. They indicated that they had nothing relevant to provide to the inquiry. They were then further contacted and advised that we thought they could be of some assistance. I was never under the understanding that it was to be anyone other than Ms Bernadette O'Neill. No-one on the committee requested me to require or ask Mr Nassios to come. Let's be clear: no-one asked for that so it was not pursued. Ms O'Neill was the relevant officer that we sought. If people need or require Mr Nassios, that is a matter we can look at later on.

Mrs BRONWYN BISHOP: I would like to place on the record that I expected him to be here today.

CHAIR: I also place on the record that I had said to members of the committee, 'If there is anyone you want, let me know and we will ask them to come.' No-one approached me telling me they wanted him as a witness.

Mrs BRONWYN BISHOP: Okay. I am letting you know now that I want to hear Mr Nassios—

CHAIR: As I know now, we will look at it later on. Let us continue.

Mrs BRONWYN BISHOP: I do want to hear from him because, quite clearly, I think we are going to get into difficulties with questions Ms O'Neill simply cannot answer. Anyway, let us begin. What date did Fair Work's inquiry into the HSU affair begin? And, while you are looking that up, could you tell me the date it was completed as well, just so we have the correct parameters.

Ms O'Neill : The inquiry commenced on 6 April 2009 under section 330 of what was then schedule 1 to the Workplace Relations Act. A formal investigation commenced on 27 March 2010 and the investigation concluded on 28—

Mrs BRONWYN BISHOP: You say that it began on 6 April 2009 and then you say that it did not actually start until a year later. Is that right?

Ms O'Neill : The inquiry commenced on 6 April 2009. The formal investigation, which is a separate process under the registered organisations act, commenced on 27 March 2010 and concluded on 28 March 2012.

Mrs BRONWYN BISHOP: What do you say made it take so long?

Ms O'Neill : I do not say anything. You may be aware that I have commissioned an independent review of the investigation to look at how long it took, the reasons for any delay and the reasonableness of the process. I am awaiting the outcome of that review.

Mrs BRONWYN BISHOP: How many people worked on the inquiry? Were they all full-time or how many were full-time and how many were part-time?

CHAIR: If you do not know, take it on notice.

Ms O'Neill : The delegate, Mr Nassios, had carriage of the inquiry and the subsequent investigation at all times. He was the principal officer. He worked full-time; however, he had other—

Mrs BRONWYN BISHOP: I know about him. How many other people?

Ms O'Neill : I have provided this information in response to questions on notice and information for the estimates process.

Mrs BRONWYN BISHOP: Then you must have it ready at hand.

CHAIR: We are not going to have a memory test, here. Ask your questions. If Ms O'Neill cannot give you the answer immediately we will take them on notice. This is not going to be a contest where we do anything other than extract evidence. Ask your relevant questions. If the answers are on Senate estimates, then you refer to that, Ms O'Neill, and you can provide them in a supplementary submission.

Mrs BRONWYN BISHOP: This is a separate committee.

CHAIR: I know it is a separate committee. I am not trying to stop you, but we are not going to have this sort of banter that you are starting.

Ms O'Neill : The other officer who was principally involved was another senior employee of Fair Work Australia, who worked on the inquiry and investigation for its entirety and was assisted by solicitors—a particular solicitor in the main, but with assistance from the Australian Government Solicitor.

Mrs BRONWYN BISHOP: Three people worked on it.

Ms O'Neill : With some additional assistance from time to time, but they were the principal—

Mrs BRONWYN BISHOP: How many were those? If you could take it on notice and let me know exactly how many people worked on it and what they did, who was full time, who was part time, what period they worked and what their job was. On what date did Fair Work Australia first contact Craig Thomson?

Ms O'Neill : I do not have that information.

Mrs BRONWYN BISHOP: So you will take that on notice as well?

Ms O'Neill : Just to clarify, is your question contact of any kind? Is that the question?

Mrs BRONWYN BISHOP: Interview him for the inquiry.

Ms O'Neill : I will take that on notice.

Mrs BRONWYN BISHOP: Just so we understand what Fair Work Australia is, you are actually the General Manager of the national workplace relations tribunal, aren't you? It goes under the euphemistic title of Fair Work Australia, but you are actually the national workplace relations tribunal that we are dealing with.

Ms O'Neill : I am the General Manager of Fair Work Australia.

Mrs BRONWYN BISHOP: Which is known as the national workplace relations tribunal.

Ms O'Neill : Yes.

Mrs BRONWYN BISHOP: And it has powers to deal with disputes resolution. That is the power you are operating under?

Ms O'Neill : No, that is not the case.

Mrs BRONWYN BISHOP: What power are you operating under?

Ms O'Neill : The powers under the Fair Work (Registered Organisations) Act 2009.

Mrs BRONWYN BISHOP: What powers do they give you?

Ms O'Neill : There are a range of powers. In relation to the investigation, there are powers to conduct an inquiry in certain circumstances and a power to conduct an investigation in prescribed circumstances and then to take—

Mrs BRONWYN BISHOP: Describe prescribed circumstances.

Ms O'Neill : An investigation can be commenced once reasonable grounds to commence an investigation are satisfied. They concern compliance with the obligations, generally best described as financial reporting obligations, under the registered organisations act.

Mrs BRONWYN BISHOP: So it is financial reporting obligations that you are going under.

Ms O'Neill : In broad terms, yes.

Mrs BRONWYN BISHOP: Let us take an example in a different jurisdiction. Rear Admiral Smith in New South Wales was made head of Sydney Ferries. Rear Admiral Smith used his company credit card to pay school fees, for personal expenditure and a whole range of things. It is a bit like how Fair Work Australia found that Mr Thomson used his HSU credit card. Rear Admiral Smith ended up before ICAC and indeed he will be criminally charged. The police investigated the matter. Is there anything that would have prevented the police being called in to investigate what could amount to theft or fraud in the use of the HSU credit card?

Ms O'Neill : There is nothing, as I understand it, to prevent police conducting an investigation into criminal conduct of any type. I am not quite sure I understand your question.

Mrs BRONWYN BISHOP: How was the question put to you to inquire into this matter? Who brought it to your attention first?

Ms O'Neill : I will correct this if I am wrong, but I believe it was on the basis of anonymous information left at a counter of an FWA office.

Mrs BRONWYN BISHOP: Why wouldn't you have called in the police?

CHAIR: Can I just stop questioning there and remind members of the committee of the terms of reference and in particular the resolution of the Privileges Committee of 25 September 1988 in the following terms:

(9) A chairman of a committee shall take care to ensure that all questions put to witnesses are relevant to the committee’s inquiry and that the information sought by those questions is necessary for the purpose of that inquiry.

We are going down a line of questioning that I have allowed to date but I am not going to allow much more of it unless I can be convinced it is within the terms of reference.

Mrs BRONWYN BISHOP: My concern is that disclosure requires donations and gifts to be disclosed, that there is some contention in the report from the AEC of an analysis of the Fair Work Australia report—it is not an inquiry because it says it has no power to do any such thing and it was all done in four days—and that certain payments had been disclosed by either the HSU or the ALP but they seem to have nowhere covered the fact that, if the money was stolen, neither the ALP nor the HSU can disclose lawfully those things as donations or as gifts because, in fact, they were theft.

In your inquiry Mr Nassios made some pretty damning findings of Mr Thomson. He found that he did not have the authority to authorise payments and in a way it is no different from Rear Admiral Smith putting personal expenditure on his company credit card in the same way that Mr Thomson did but in this case for the purposes of getting elected. In looking at your report as I go on to other questions I am going to divide it between before and after 13 April 2007 because as at that date whether or not Mr Thomson was an office holder of the HSU is really irrelevant for the purposes of his being a candidate. Once he was a candidate a whole lot of other things came into play. If he was authorising payments for himself, for his own benefit, and misusing a credit card for that purpose then it was theft. My concern is this: if we are talking about properly documented gifts and donations, which is part of our inquiry, we have to be able to discern which are gifts, which are donations and which is theft. Where in that process did Fair Work Australia, or you as the tribunal, look into those aspects?

Ms O'Neill : To be clear, I am not here in relation to the tribunal. I am here in terms of my responsibilities as General Manager of Fair Work Australia under the registered organisations act, and that is perhaps best described as the administrative side of Fair Work Australia and is entirely separate to the operations of the tribunal. In terms of the question of whether criminal offences have or have not been committed, that is a matter for others. It is my view, having received extensive advice, that I am not empowered under the registered organisations act to conduct an investigation into whether criminal offences have or have not been committed. That is not a question that was examined.

Mrs BRONWYN BISHOP: Why wouldn't you have referred it to the police?

Ms O'Neill : Because my advice is that I was not permitted to do so.

Mrs BRONWYN BISHOP: Who gave you that advice?

Ms O'Neill : The Australian Government Solicitor.

CHAIR: Ms Bishop, that evidence was given before you were here. At the end of the investigation it would be passed on to the DPP, as I understand the process.

Ms O'Neill : The amendments that are before the parliament do introduce a power for me to disclose information obtained during the course of an investigation to another Commonwealth or state or territory authority. So that would enable matters to be disclosed to the police in future, if appropriate.

Mrs BRONWYN BISHOP: That may be the case, and we will not debate it here now, but I find it incredible that a government agency would not cooperate with police. But that is for another day. I want to go to the importance of the BDO Kendalls report, which seems to have been a very important report. Fair Work Australia seems to have relied on that report to a degree. Would you agree with that?

Ms O'Neill : That is a matter, really, for the delegate and not for me to comment on. It is clear from the text of the report that was provided by the delegate to me, and the report speaks for itself in that respect.

Mrs BRONWYN BISHOP: So it was an important part of the proceedings?

Ms O'Neill : I cannot really add to what the report provides.

Mrs BRONWYN BISHOP: Is there any reason why this committee has not been given a copy of the BDO Kendalls report? It is supposed to be an annexure to your report; we do not have it.

CHAIR: Has it been publicly released?

Ms O'Neill : As I understand it it—and this is my understanding from the proceedings at the estimates committee in May—you may be aware that I provided a copy of the report of the delegate, including all of the annexures and associated documents, to the committee. The committee made the decision to make available the report. I do not believe—but it is not a matter for me—that they have not decided to—

Mrs BRONWYN BISHOP: But I am asking you, as someone appearing before this inquiry, which we have been asked to look into by the minister, if you will provide us with that report please.

Ms O'Neill : I will take that on notice, if I may.

Mrs BRONWYN BISHOP: Who are you going to ask? You are the general manager, are not you?

CHAIR: She might take advice. She will take it on notice. The Senate committee chose not to release it. That sends to me some cautionary notes. Ms O'Neill said she will look at it. She will look at it and take whatever advice she needs to take. We will move on.

Mrs BRONWYN BISHOP: I want to go back to your first points of contact with Mr Thomson, and you do not know when that is but you are going to find out. How many interviews did Fair Work Australia conduct with Mr Thomson?

Ms O'Neill : That information, as I understand it, is set out in the report itself. I cannot, off the top of my head, refer you to a particular paragraph, but all of the communication with Mr Thomson or any other person involved in the conduct of the investigation is set out in that report.

Mrs BRONWYN BISHOP: Are the transcripts of these interviews available?

Ms O'Neill : As I understand it, the transcripts of the interviews of all persons concerned were provided to the Senate committee on employment, education and workplace relations. If you asking me to provide this committee with a copy of them, I will take that on notice in a similar way.

Mrs BRONWYN BISHOP: Let me get this right: the Senate committee asked for those things and you gave them to it; this committee of the House of Representatives, with a reference from the minister, is asking for the same things and you are not agreeing to it; you will take it on notice. Is that where we are?

CHAIR: I think the difference, if I can be fair to the witness, is that our terms of reference are a bit more limited than those of the Senate committee. Indeed, we are supposed to be here dealing with electoral implications. I have allowed a series of questions, out of respect for you, which I am not going to allow much longer. We will come back to the terms of reference. She will take it on notice. Let us also be clear: I advised Ms O'Neill that if she needed to take matters on notice she could take them on notice. Let us be clear that she is availing herself of what I offered her.

Ms O'Neill : I do not anticipate any difficulty, but you may be aware that I do not consider it appropriate or available to me to make these documents publicly available. I provided them the Senate committee on request, having received advice that it was available to me to do so. Given that this is a different context—

Mrs BRONWYN BISHOP: It is a committee.

Ms O'Neill : It is a different context, and I just want, as a matter of caution, to confirm the position before committing to doing something.

Mrs BRONWYN BISHOP: Turning to the question of the wages and employment of Ms Criselee Stevens and Mr Matthew Burke. In the AEC's brief analysis of your substantial report, it says, basically, that these things would have been disclosed by either the HSU or the ALP. But, in fact, from the time of Mr Thomson's endorsement as the candidate for Dobell his character changes entirely, and the work done by Ms Stevens for him would have been for him as a candidate and therefore would be disclosable, presumably, by him. In the case of Mr Burke, he ceased to work for Mr Thomson on 6 April and then commenced working with Senator Hutchins, who was the duty senator on the Central Coast for the seat of the Dobell. Mr Burke continued to use his HSU credit card for expenses in and around the Central Coast which could well have been pertinent to that election. What amount of evidence did you draw about the expenditure and use of the credit card of Mr Burke after 13 April or did Fair Work Australia not make any distinction between the status of Mr Thomson before 13 April as a person seeking to raise his profile but not being an endorsed candidates and his position after 13 April as being an endorsed candidate and therefore subject to a whole lot of different rules?

Ms O'Neill : The material to support the findings in the report is all set out in the body of the report. I cannot really add to that.

Mrs BRONWYN BISHOP: That is not true. There is a list of things in the report that say how much money was spent over that period, but there is no distinction in your report between his character pre his endorsement as a candidate and post-endorsement

Therefore, the behaviour of Mr Burke, in particular, with regard to that is quite relevant after the 13th, although he was no longer working for Mr Thomson. You find that the work that they were doing was not specific to the HSU; I guess we can therefore conclude that he was working for Mr Thomson. The question is: was Mr Thomson authorised to employ those two people? Is there anything that I have missed in the report and that tells me about that?

Ms O'Neill : The question that was being considered in the course of the investigation was whether expenditure was properly authorised in accordance with the rules of the HSUA and the obligations under the registered organisations act, so it would be unlikely that there would be any distinction drawn as to the character of any individual at any point in time. In terms of more detail on that, I cannot expand on what is in the report.

Mrs BRONWYN BISHOP: You do not know.

Ms O'Neill : The findings and the basis for them are set out in the report.

Mrs BRONWYN BISHOP: As you were not the person doing the work, it is difficult for you to give me a meaningful answer to the question I asked you: how useful was the BDO Kendalls report to Mr Nassios in his investigation? You really cannot answer that question, can you?

CHAIR: You will have an opportunity to ask Mr Nassios sometime in the future in relation to that. We have canvassed that, and no-one is going to stop that from being asked. But I think that the important thing for Ms O'Neill and why she is here was in terms of the terms of reference methods of investigation that relate to electoral disclosure and scrutiny of particular unions. I think it would be helpful if we concentrated on that, given that Mr Nassios will be asked to appear.

Mrs BRONWYN BISHOP: Okay. We will go back to Mr Thomson and the use of his credit card. He remained secretary, in name, of the HSU up until, I think, December after the election. I think that was the case. Most of the press reports have concentrated on exotica, shall we say—escorts and prostitutes and all that sort of stuff—but the stuff that is particularly interesting to me today is the use of his credit card on electoral expenses relating to his own election campaign in Dobell.

On page 633 of your report on Ms Nassios's report, $71,300.23 is the total amount of expenditure on HSU credit cards for Craig Thomson's campaign in Dobell. Then it sets out precisely what they were for: everything from the establishment of the Long Jetty campaign—which was prior to his becoming a candidate—$3,500 to the Labor Party's Dobell FEC, though we do not know where if at all that was disclosed, to a campaign bus and letterbox material paid for to LBH Promotions—

Ms O'Neill : Can you refer me to the page?

Mrs BRONWYN BISHOP: It is page 633.

Ms O'Neill : Do you have a paragraph number?

Mrs BRONWYN BISHOP: No. It is page 633.

Ms O'Neill : It may be pagination issue, Ms Bishop, but—

CHAIR: It is paragraph 196. Try that.

Ms O'Neill : Of chapter 7?

CHAIR: Yes—I think.

Ms O'Neill : I have a heading of: 'Summary of expenses relating to the Dobell campaign'. Is that—

Mrs BRONWYN BISHOP: What I want to know is: what evidence did you take and what conclusions did you make—or your understanding of them; that is a better way of putting it—about this expenditure? Was it approved by the HSU executive as opposed to being approved just by Craig Thomson himself?

Ms O'Neill : The basis for those findings and the detail of each of those items of expenditure are set out in the preceding pages in the report with references to the relevant underpinning documents. I cannot really add to that.

CHAIR: In fairness, the Electoral Commission has made a submission to us dated 21 June 2012. At page 44 of that submission there is a table 1, which relates to paragraph 196 of the FWA report. It details all of those amounts and gives the AEC's assessment in relation to the number of which were disclosed—

Mrs BRONWYN BISHOP: But it does not make the distinction between before and after 30 April; that is the problem with that.

CHAIR: All right.

Mrs BRONWYN BISHOP: The answer is no; you cannot. I want to go on and quote a finding of Fair Work Australia relating to the employment of Criselee Stevens and Matthew Burke.

Ms O'Neill : I am sorry; I am really not trying to be difficult but I just need to be clear: it is not a finding of Fair Work Australia. It is a finding of the delegate of the general manager under—

Mrs BRONWYN BISHOP: Which is exactly why we are in a difficult position today. I just want to quote what is said in the report:

Whether the employment by the National Secretary of other persons on behalf of the National Office would also meet these requirements involves finer judgements of fact and degree. While, on the one hand, it seems reasonable that the National Secretary could employ an administrative assistant/finance officer, the employment of Mr Burke and Ms Stevens, on the other hand, is far removed (on the available evidence) from what could be considered to be part of, or incidental to, the general administration of the Union. As set out in chapter 7, Mr Burke and Ms Stevens were engaged on the Central Coast of NSW working in the seat of Dobell to which Mr Thomson was ultimately elected. There is no connection of the employment of these two individuals with the ‘general administration of the Union’.

That is a pretty clear statement that Fair Work Australia believed that there was no power for Mr Thomson to employ those people for the purposes for which they were employed. Therefore, it is a very serious question and again we come back to that if there is no way that he had the power to appoint them, because it was not for a union purpose, then it has to be an offence of some sort. We will leave that aside for the moment, but at the end of the day it is then impossible to say that the reporting responsibility would lie with the HSU. When we come to the filing of those returns by the HSU, the AEC sets out the annual returns in its grid titled 'Expenditure'. Let us look at one:

Salary Ms Stevens

Required to be disclosed? In part

Disclosure by? HSU

Was it disclosed: Yes—HSU Political Expenditure Return

When you think that is impossible if Mr Thomson was not empowered to make those appointments—and that is what your delegate's report says—there is no connection of the employment of these two individuals with the general administration of the union. So the AEC is largely saying that it was all covered by the HSU's belatedly putting in three amended returns, three years late, the last one coming in in February this year. To say that they have been simply covered by that return cannot be the case. I would like to know, with regard to the evidence that was taken by your delegate, whether or not there are other pieces of evidence which we have not seen which clearly make that case out.

CHAIR: It seems to me that that is a question more properly asked of Mr Nassios. I am not convinced it is properly asked of this witness. I am not trying to be obstructive, I just think that he as the investigator is best placed—unless you can answer it, Ms O'Neill? If you can, please feel free.

Ms O'Neill : Firstly, I make the point that in relation to each of the findings, including the ones you have referred to, the basis and the evidence for each of those findings is set out in the report and the associated documents. Further, these are all matters that will be before the courts as these matters progress and are litigated, and will be determined in that forum. Even if Mr Nassios was here, I do not know that he could advance these types of questions any further because the findings speak for themselves. This report, in its entirety, has been the basis of my decisions as to what action to take and I have announced my decisions in relation to that, and those matters will all be tested in the court on the basis of the report.

Mrs BRONWYN BISHOP: Mr Nassios directly interviewed both Mr Burke and Ms Stevens, so there must be transcripts available of these interviews. I would ask for those transcripts.

Ms O'Neill : I will take that on notice in the same way as I have in respect of the other matters.

Mrs BRONWYN BISHOP: I want to come to the question of the curious expression by Mr Thomson of Ms Stevens' employment being an 'experimental' role—that is on page 170 of the Fair Work Australia report . This is what Mr Thomson said because it is in the report:

I kind of saw her - and this, you know, may be subject to some criticism, but I kind of saw her position as not being the same as other employees in that it was for a fixed period while she did the [ACTU] course. It was relatively cheap, I think it’s you know, something like $35,000 a year, it wasn’t a lot of money that was there.

…   …   …

The rate of pay and the terms for Crissie were set by the ACTU. There was no real role for the union. Unless they wanted to pay more, I wasn’t going to argue that we should be paying more for that position, which was, you know, experimental in a lot of senses.

Given that Mr Thomson classified that role as 'experimental', 'cheap', non-ongoing, do you find it unusual from the practices that you are finding in Fair Work Australia that Ms Stevens was given a Diners Club card for her work expenses? Do you generally see people in such low-paid jobs which are not significant, non-ongoing and experimental getting a credit card?

Ms O'Neill : I do not know that I can usefully provide any comment or observation—

CHAIR: I do not know that it is necessarily relevant to our inquiry, with the greatest respect.

Mrs BRONWYN BISHOP: It is because of the purpose that the credit card was used for during the reporting period. The total amount of expenditure on Ms Stevens' credit card was $39,314.24.

Ms O'Neill : My personal experience would not be of any assistance to this committee and it is not a matter where information would necessarily routinely be required to be provided as part of lodgement of returns with Fair Work Australia. So I would not have any information as to the prevalence or level of employees within organisations that are issued credit cards.

Mrs BRONWYN BISHOP: What returns do they file with you?

Ms O'Neill : There is a series of reports required under the registered organisations act. They include a general purpose financial statement; a statement of loans, grants and donations; and various other reports.

CHAIR: So they can be particular forms that are annexures that—

Mrs BRONWYN BISHOP: Can we have a copy of a set of those forms that they fill in for you?

Ms O'Neill : They are not forms; they are reports that are required under the registered organisations act. The content of those forms is set out within the legislation.

Mrs BRONWYN BISHOP: You would have written to people and said, 'This is what we expect to receive from you.' You would want some common format.

Ms O'Neill : I do not think that is the case. There are also financial reporting guidelines that are issued that provide some further information. I will take that on notice but, again, I would not see any issue in providing the committee with a copy of those guidelines.

Mrs BRONWYN BISHOP: You are taking on notice that you will provide us with the guidelines?

Ms O'Neill : Yes.

Mrs BRONWYN BISHOP: There are things that appear on her Diners Club statement, such as a transaction for $1,497. She apparently said she did wonder whether it could have been for the purchase of a flatbed photocopier. There is another $1,587 for office works and all those sorts of things that would have been used in an office. Fair Work Australia did say that a reasonable person would have kept proper records, which it clearly did not. But at the end of the day, as far as the AEC is concerned, it is not the nature of the record-keeping; it is whether or not the gifts or donations were made during the reporting period and whether or not they had been reported. Once again, I make the point that, when the AEC lightly says that the HSU has reported those salaries in its returns and that is the end of the matter—the same with Mr Burke—that if there is no authority for Mr Thomson to have properly exercised his function, then it is not for the HSU to disclose. It is a question of theft of this amount of money. Yet there does not seem to be anything I can find—and there is a lot of stuff to go through—that shows that Fair Work Australia paid particular attention to the question of the validity of the exercise of power. Surely, you would be concerned in all those reports you are getting every year whether people are acting honestly or dishonestly.

CHAIR: As I understand it, the evidence before the committee is that this report has been forwarded on to the appropriate authorities and it is a matter before the courts. With the greatest of respect—

Mrs BRONWYN BISHOP: That is not true. The DPP said that this was not a brief of evidence and sent it back to Fair Work Australia.

CHAIR: I am not talking about the DPP here; my understanding from Ms O'Neill—maybe I misunderstood it, but my understanding is that this matter is being prosecuted in another forum, is it not?

Ms O'Neill : In respect of the findings of the contraventions of the registered organisations act and the rules, documentation is being prepared for lodgement in the Federal Court. In relation to the criminal matters, as I understand it there are current investigations by both the Victorian Police and the New South Wales Police and they have both been provided with a copy of all of the documentation that was provided to the Commonwealth DPP.

Mrs BRONWYN BISHOP: But has somebody actually prepared a brief of evidence for the DPP of criminal matters?

Ms O'Neill : Not at Fair Work Australia.

CHAIR: That is something that the police will be looking at and, if a brief is to be prepared for the DPP, is it your understanding—

Ms O'Neill : No.

CHAIR: I am just trying to clarify. I am not trying to play games here. My understanding is that it is the New South Wales and Victorian police who are looking at whether there are criminal matters to be pursued. You have forwarded your material to them and they are the ones who would forward it to the DPP. Is that right or wrong?

Ms O'Neill : The sequence is this. The action that I took was in accordance with the advice that I obtained and the action available to me at the conclusion of an investigation was to refer the entire report and associated material to the Commonwealth DPP. In turn, the Commonwealth DPP provided the full material to both the Victorian and New South Wales Police to assist in their investigations into whether criminal offences had been committed.

Mrs BRONWYN BISHOP: You missed out the fact that the DPP's initial response was to say: 'This is not a brief of evidence; it is not a matter for us.' That was their first response, wasn't it?

Ms O'Neill : Yes, it was.

Mrs BRONWYN BISHOP: Then, at what stage had the police wanted to have the cooperation of Fair Work Australia? When was the first time that they asked you any questions about this matter?

Ms O'Neill : I do not have the precise dates in front of me, but the New South Wales Police made contact sometime ago and the Victorian Police towards the end of last year. That was when information was first sought.

Mrs BRONWYN BISHOP: So that was before the completion of the report?

Ms O'Neill : It was.

Mrs BRONWYN BISHOP: Did you cooperate with them?

Ms O'Neill : The information was not provided on the basis of advice that was obtained that that was not an avenue available to me or my predecessor, and that is one of the issues that has been addressed in the amendments that are before parliament.

Mrs BRONWYN BISHOP: I am aware of the amendments, but what I want to get clear is that you are saying that the Government Solicitor gave you formal written advice that you were not to cooperate with either the New South Wales or the Victorian police. Is that right?

Ms O'Neill : That the appropriate course was to—

Mrs BRONWYN BISHOP: No; did they tell you that you were not to cooperate with the police?

Ms O'Neill : The advice that I am referring to I have provided and made available publicly, and that is available on our website.

CHAIR: Senior counsel—

Mrs BRONWYN BISHOP: And it says?

Ms O'Neill : It is a very comprehensive advice. It speaks for itself. In short, it says that the appropriate course is to rely on the express provision available to me to refer the matter to the Commonwealth DPP at the conclusion of an investigation.

CHAIR: I now ask you to get to the relevant issues in relation to this inquiry. I have tried not to cut you off.

Mrs BRONWYN BISHOP: I am—to the AEC's report.

CHAIR: I do not know that it is, but this line is certainly not relevant to this inquiry. It is also a matter of record.

Mrs BRONWYN BISHOP: What is relevant to this inquiry is whether or not—

CHAIR: You have a letter from Gary Gray and 17 recommendations, and you can ask Ms O'Neill in relation to those 17 recommendations whether there are methods of investigation or improvement that can be recommended in relation to the acts that she administers that would lead to better disclosure and better understanding by officials of their responsibilities in relation to donations and a whole series of things. That was my understanding of what we agreed to in relation to calling Fair Work Australia.

Mrs BRONWYN BISHOP: Just let me have a copy of the letter; I thought I had it here at the front. It says here:

On 16 May the special Minister of State, Gary Gray, referred the AEC analysis of the Fair Work Australia report and the list of matters to the committee for its consideration.

So it is both their analysis and the list, and I am very interested in their analysis.

CHAIR: Yes, and he says in his letter of 16 May:

At the time, I also sought advice from the Electoral Commissioner on any issues concerning the operation of the Electoral Act which could be considered for possible remedy.

I refer the Electoral Commissioner's analysis and the list of matters to the Joint Standing Committee on Electoral Matters for its consideration.

There are 17 matters. I am not trying to stop you if you are relevant, but—

Mrs BRONWYN BISHOP: I refer to the analysis and the list. I am interested in the analysis.

CHAIR: It is analysis in relation to electoral matters, Bronwyn. You know that, and so do I.

Mrs BRONWYN BISHOP: The electoral matters are: have these amounts been properly disclosed?

CHAIR: Yes, and the electoral commissioner has come to a conclusion in relation to those.

Mrs BRONWYN BISHOP: Which the Fair Work Australia findings do not agree with; that is my contention. I am specifically talking about—

CHAIR: I am happy for you to pursue that.

Mrs BRONWYN BISHOP: Thank you very much. I am particularly talking about the salaries and expenses on credit cards utilised by Ms Stevens and Mr Burke.

CHAIR: My reading of what Fair Work Australia and the Electoral Commission said is that Fair Work Australia's report was categorised by the Electoral Commission and that it made particular points in relation to when Mr Thomson had been endorsed for preselection—pre and post—and what things fell into. There were four little areas that amounted to $17,000 that they required further information on. I am happy for you to continue along those categorisations. But you have gone beyond that, and I think that the time has come to be relevant.

Mrs BRONWYN BISHOP: I want to strongly make the point—

CHAIR: Please do.

Mrs BRONWYN BISHOP: that, as of 13 April 2007 when Mr Thomson became the candidate, his position of secretary is not the one that is relevant to disclosure. His position of candidate is the one that is relevant.

CHAIR: I do not dispute that.

Mrs BRONWYN BISHOP: The fact of the matter is, Ms Criselee Stevens was a gift of services—either properly authorised by the HSU or not. In the event that it was not a properly authorised exercise of his function—which Fair Work Australia says it was not—then it cannot be disclosed by the HSU, as the AEC says it has been. Therefore the obligation about reporting is still there and whether or not you can report theft, money which is thieved, as a gift is a very interesting question.

CHAIR: I would make the point to you that you can still have the HSU employing people post the endorsement but it has to be declared if it goes above the threshold. That is the real question here. It is not whether the HSU can continue to employ people post his endorsement. If they are working on his campaign it becomes a disclosable amount, if it exceeds the threshold.

Mrs BRONWYN BISHOP: Not if he has acted ultra vires and there is no appointment of those people to those jobs by the HSU. In other words, he has purported to do something which he has no power to do.

CHAIR: That is a matter for the other authority, is it not?

Mrs BRONWYN BISHOP: It is a very important point. The AEC cannot just leap over it and say, 'Oh, it's all hunky dory.' They cannot do that.

CHAIR: That is where you are better off going after the AEC, rather than Fair Work Australia.

Mrs BRONWYN BISHOP: Believe me, I will.

CHAIR: I look forward to it. I do think that is more of an issue. I know where you are wanting to go. In all fairness, that is a matter for the AEC. It is not a categorisation—

Mrs BRONWYN BISHOP: It is an important question to have here because the FWA was the one taking the evidence and it has made these conclusions. Therefore it is very important.

CHAIR: Continue.

Mrs BRONWYN BISHOP: I am prepared to let somebody else have a go at the moment.

CHAIR: Does nobody else have question?

Mr SOMLYAY: When do you expect the results of the audit of the process to become available?

Ms O'Neill : By the end of July. I have indicated that I intend to make the findings of that review publicly available.

Mrs Bronwyn Bishop interjecting

Ms O'Neill : This was a question in relation to the timing of the independent review of the investigations that I commissioned.

Mr SOMLYAY: Did you consider using the Auditor-General for that review?

Ms O'Neill : No, I did not—not for any particular reason.

Mrs BRONWYN BISHOP: Does the Auditor-General have an automatic right to do a performance audit on the FWA?

Ms O'Neill : I am not sure I know the answer to that, off the top of my head.

Mrs BRONWYN BISHOP: That is the provision that was supposed to go to the Auditor-General, on Mr Oakeshott's motion, but the government demanded he withdraw it. The Auditor-General has no authority to go automatically into GBEs but whether or not the FWA is a GBE, I do not know. The AEC analysis said:

... individual amounts of payment involved in this matter were below the applicable $10,500 disclosure threshold ...

This is in relation to the Father's Day breakfast, for which Mr Thomson candidacy in Dobell is patent, given the agreement that was entered into in mid-2007—that is, during the reporting period—and that payments for the 2007 breakfast were made in August 2007. Given the Father's Day is the first Sunday in September and the federal election was held in late November, Mr Thomson's appearance on national television in association with this event just a few months before the election would on any reasonable view have assisted in gaining publicity for his candidacy in Dobell. A reasonable person in Mr Thomson's position would have taken steps to ensure that these payments were approved by the national executive and recorded in the minutes of the national executive. Presumably that statement means that that did not happen—is that the case? That seems to be the implication. I would like to know whether that is in fact what happened.

Ms O'Neill : I do not know that off the top of my head. I would need to refer to the relevant provision in the report of the delegate. The information will be in there.

Mrs BRONWYN BISHOP: I see. As the commission said that this was an amount of money that was under the:

... $10,500 disclosure threshold that applied in the 2007/08 financial year this payment would not have been required to have been particularised in either a donor return or an annual return under the Electoral Act.

I would however ask: if it was an accumulation of money that was characterised as a donation, would it go over that threshold?

CHAIR: An accumulation would go over.

Mrs BRONWYN BISHOP: Yes. I would like to ascertain whether we can simply find if it did.

CHAIR: Can you take that on notice as to whether it was an accumulation?

Ms O'Neill : I am not clear as to what you are actually asking. You are referring to the AEC analysis.

Mrs BRONWYN BISHOP: There were two payments made for $2,500. The HSU national office was invoiced for $5,000 for support for a Father's Day breakfast on 27 June 2007. That is inside the reporting period.

CHAIR: It might not be under because I think the threshold then was $10,900 or $10,500—

Mrs BRONWYN BISHOP: Yes, that is what I am saying.

CHAIR: so it is not disclosable.

Mrs BRONWYN BISHOP: But if it is cumulative—

CHAIR: But cumulative has to be over the 10½ to be reportable. If it is cumulative, it is fine; it is not reportable.

Ms O'Neill : I am assuming you are referring to obligations under the Electoral Act—

CHAIR: Yes.

Ms O'Neill : which I cannot really assist you with.

Mrs BRONWYN BISHOP: What I am saying is: if there was another donation of $7,000 from the HSU in the period then the two together would be over the threshold and would have to be disclosed.

CHAIR: We will get that evidence.

Mrs BRONWYN BISHOP: I would just like to make a note that we should check that ourselves. I will ask the secretary of the committee if we can do that, because there is a statement somewhere in the AEC's report that he has interpreted the act, I think, by saying that not all gifts and not all donations are cumulative, that they can be treated as isolated amounts. I would like to check that particular issue.

CHAIR: That might relate to them not necessarily being donations as such. We will check that.

Mrs BRONWYN BISHOP: It is clearly a donation, but the question is whether it was required to be disclosed by the candidate.

Ms O'Neill : In terms of the obligation to lodge a statement of loans, grants and donations under the registered organisations act, the threshold there is $1,000. The threshold for disclosure of loans, grants and donations under the registered organisations act is $1,000. I am just providing that by way of information.

CHAIR: Is that if it is given to individuals?

Ms O'Neill : No, this is in respect of any loans, grants or donations by a registered organisation, irrespective of to whom.

Mrs BRONWYN BISHOP: I have put a lot of stuff for you to take on notice, for information that, quite frankly, I need to take further. Can you let us have that information as quickly as possible so that perhaps when Mr Nassios comes in we will be able to ask him more questions about his own findings. But my main concern is that if Mr Thomson had been authorising credit card use that was not authorised and within the power to be authorised by the union itself and if he had simply been utilising those cards and people's salaries, then it does amount to theft, which is pretty serious stuff.

CHAIR: Are there any other questions? If not, I thank you for your assistance to the committee and your attendance today. If you can provide that additional material to the secretariat as soon as possible, we will get a transcript to you as soon as we can, which might assist you in that regard.

Mrs BRONWYN BISHOP: Can I ask one brief question?

CHAIR: Yes; you have been very good this afternoon!

Mrs BRONWYN BISHOP: With regard to the returns that the HSU had to put into the Electoral Commission, did FWA concern itself with the fact that it had not done its reporting properly?

Ms O'Neill : I am not sure of the particular provision or obligation you are referring to, but the investigation went to compliance with the financial reporting obligations under the registered organisations act and the duties of officers and employees, so it would not encompass any such obligation. It would not have been within our remit.

Mrs BRONWYN BISHOP: Just for the record, they did put in a nil return stub and three years later it was, I think, $24 million. It was quite a jump.

Resolved (on motion by MrSomlyay):

That this committee authorises publication, including publication on the parliamentary database, of the transcript of the evidence given before it at public hearing this day

CHAIR: I thank everybody for their attendance and cooperation today.

Committee adjourned at 15:22