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Friday, 9 August 1946

Mr HARRISON (Wentworth) . - The purpose of this measure is to grant supply for another two months, which will cover the election period and the time necessary to enable the new Government to take over the affairs of the country. It is. usual, on the occasion of the introduction of a Supply Bill for honorable members to criticize Government administration and various departmental actions. I do not propose to follow that course to-day, for it is recognized that supply must be granted to cover the election period;' but there is ample justification for criticism of the extravagance and unsound financial practices of the Government, and other honorable members may wish to speak on those subjects.

I desire to refer to a matter arising from the tabling of the Conde report on the Salvage Commission for which I asked earlier this week. . From what I can learn from my examination of the document, the terms of reference were given to Mr. Conde last February. The inquiry was ordered following charges which the Leader of the Australian Country party (Mr. Fadden) and I had made regarding the operations of the Salvage Commission and with' regard to the disposal of refrigerators, motor cycles, motor vehicles, army foodstuffs, tools and equipment. The Prime Minister (Mr. Chifley) considered that the charges were sufficiently serious to warrant an investigation. The terms of reference, as I read them, gave to Mr.

Conde the opportunity to make the most exhaustive inquiry into the charges, but I am amazed to discover that he did not so regard them. He treated this inquiry in a most cavalier fashion. He evidently placed on the terms of reference an interpretation that all he had to do was to whitewash the Government and obliterate with a liberal coating of whitewash the charges which we had made. Strange as it may seem, Mr. Conde did not interview the members of the Advisory Board on the Salvage Commission, who had specifically asked for an opportunity to give evidence on oath. My statements in the House, and the correspondence which I read in relation to this matter, he brushed lightly aside. The Minister stated that he would give to the members of the Advisory board an opportunity to state before the investigator the complaints that they had made in writing to me, but Mr. Conde ignored the undertaking. He did not even attempt to ascertain from me what information I had to support my charges. At no time during the inquiry did he establish contact with me and I do not believe that he interviewed the Leader of the Australian Country party.

Mr Fadden - He did not.

Mr HARRISON - Therefore, Mr. Conde could not have been aware of what evidence the Leader of the Australian Country party and I had to support our charges, and what evidence could be obtained from members of the Advisory Board. Yet he reported to the Government that, after having examined the files of the department, he could not see any reason why he should proceed with the inquiry. I propose further to support my chargesand place before the House documents which I have in my possession, including statutory declarations, letters from responsible firms in Sydney, and charges made by officers of the commission itself. This is evidence which Mr. Conde should have obtained from me. All the papers were available to him, but he was not desirous of having an inquiry into the matter. His aim was to confirm what he believed was the direction of the Government in this regard, and he effectively carried out the duty that he assigned te himself. On page 2 of the report, he states -

Departmental records and documentary evidence tendered enabled me to examine closely the allegations which are the subject of the foregoing terms of reference. On the other hand, however, the statements made by the right honorable A. W. Fadden, M.P., and the honorable E. J. Harrison, M.P., were not specific in detail, and because of their generalization the task of verification or otherwise is ex-' tremely difficult, ifr. Conde was appointed to inquire into charges which were made in general terms in this House. Obviously, when honorable members make certain allegations here, they do not desire to reveal the source of their information. However, we were prepared to give the necessary evidence on oath before Mr. Conde, so that the persons whom we held responsible should have an opportunity also to testify on oath in an attempt to refute those charges. Mr. Conde complained that we did not give specific details, and that because of our generalizations, the task of verification was extremely difficult. He could have verified every one of the charges which we had made in the Houseif he had complied with his terms of reference and taken evidence on oath from the Leader of the Australian Country' party and myself. As a matter of fact, Mr. Conde did not call any witnesses. It is. true that he visited certain firms which I had mentioned, and I had to give instructions to. the employers to insist that, if Mr. Conde decided to ask questions of them they should claim the right to be sworn.

Mr Dedman - How could the honorable member " instruct " the members of firms?

Mr HARRISON - Perhaps I should have said that I advised the employers that , in my opinion, they should not answer any questions by Mr. Conde unless he was prepared to take evidence from them on oath. Surely a witness has the right to be sworn, and to insist that other witnesses shall also be sworn. Mr. Conde had authority to verify every statement which we made in this House, but he failed miserably to exercise his powers under the terms of reference. He reported - (a.) Hot water system. - I can find no con clusive evidence that an offer of£1 50was made for the hot water system, notwithstand ing that the person who alleges he made the verbal offer has since confirmed in writing that he did make such an offer. The Ministry of Munitions has no record of the offer, and, in a written statement, the particular officer concerned states that he cannot recall any such offer being made to him.

I have the names of the persons concerned. I have mentioned some of the names in this House. Mr. Conde could have called before him responsible officers of the department and other persons, and taken evidence from them on oath. He would then have been able to determine whether or not the statements were accurate. But he was too eager to side-step a legitimate inquiry, and to give the Government what it wanted. He succeeded in closing the inquiry as quickly as possible. That is what he has said in his report -

This resolves itself into a matter of one man's word against another. Whilst there is a possibility that an offer of £150 could have been made, the question as to whether it was, or was not made, is not in my opinion a matter of importance.

Surely he was in duty bound to satisfy himself as to which man's word was correct !

Mr Menzies - Did he hear both men?

Mr HARRISON - He did not call any witnesses. He merely moved round, had a look at the various files, and satisfied himself that they were correct. He made no attempt to learn, whether the Leader of the Australian Country party and I could place before him sufficient evidence to warrant his full attention. He did not approach either the Leader of the Australian Country party or myself at any stage of his inquiry. On the subject of work benches, he has reported -

A representative of the Consolidated Metals' Company, Auburn, claims that he wrote out an offer at the Ministry of Munitions Office, Sydney, which it is alleged the Chief Disposals Officer rejected on the grounds that the company was not engaged on defence work. Notwithstanding an exhaustive search, no trace or record of the original written offer can be found.

I have before me certain information which it may be well that I should read to the House; it relates to the letters referred to by Mr. Conde in his report. The first letter refers to the sum of £150; which., it will be remembered, was mentioned in connexion with a hot water system. It was sent to me by Mr. Kerry, who was the disposals officer in the Department of Munitions, in a letter dated the 28th September, 1945, in these terms -

With reference to your charges in connexion with the Disposals Commission, reported in Daily Telegraph of 20th September, 1945.

I wish to advise thatI was the disposals officer concerned, and I did receive an offer of £150 for the hot water heater and £10 each for the work benches.

The same day as your charges were reported in the press, a departmental inquiry was commenced to ascertain if they were true.

I was " put on the mat ", practically accused of being the " traitor in the camp " who had informed you.

This I denied, as I have never met you and. had disclosed no information to anyone outside the department, though at the time it was common talk in our section.

Although Mr. Conde has reported, " This resolves itself into a matter of one man's word against another ", and the officer concerned said that he did not make an offer, this letter from Mr. Kerry states that he received an offer of £150. That he did so is proved by this letter, signed by Mr. J. Treacy-

With reference to various articles inspected by me on the 15th March last at Villawood, amongst which was a 900-gallon copper hot water system, together with stand, hot and cold water taps. I wish to confirm the fact that I made an offer of £150 for the heater to Mr. Kerry, who introduced me to Mr. Cohen at the time of the offer.

Mr. Kerrymentioned the fact that he would have to tell Mr. Cohen, and as Mr. Cohen was there he introduced me and submitted the offer.

Mr. Coheninferred that the price was too low, as they could get more at an auction sale, thereby rejecting the offer. In view of the offer being turned down verbally I did not proceed further to confirm the matter in writing.

That places beyond all reasonable doubt, first, that Mr. Treacy made the offer ; and secondly, that Mr. Kerry received it. Yet Mr. Conde has said in his report -

I can find no conclusive evidence that an offer of £150 was made for the hot-water system, notwithstanding that the person who alleges he made the verbal offer has since confirmed in writing that he did make such an offer. The Ministry of Munitions has no record of the offer, and, in a written statement, the particular officer concerned states that he cannot recall any such offer being made to him.

The offer was made verbally. Even the disposals officer was not called before Mr. Conde to give evidence, although in a letter to me he has said that he was the responsible officer who received the offer.

A similar position exists in connexion with work benches. It is made perfectly clear, in a letter from Consolidated Metals Proprietary Limited, that it made an offer. The letter reads -

With reference to my offer of 11th April last concerning six work benches at £5. each located at No. 2 Store, Villawood, and which, offer was rejected as being too low.

I wish to confirm that approximately one week laterI submitted in writing to Mr. Kerry a fresh offer of ten pounds (£10) each.

Subsequently, I was informed two days later by phone by Mr. Kerry that this offer was rejected by Mr. Cohen, on the grounds that we were not engaged on defence work and that the benches were to be sold at auction at Villawood.

Thereupon I dropped the matter, asI could not afford the time to compete against dealers.

Yet Mr., Conde has reported that, notwithstanding an exhaustive search, no. trace of the original written offer could be found. Of course, no trace could be found, becausethe offer was made verbally. But it was subsequently, confirmed by letter. Mr. Conde could have satisfied himself as to whether this firm or Mr. Kerry was telling the truth, by the simple expedient of calling them before him and taking evidence from them on oath. He did neither.

Another matter is referred to in No. 5 of the terms of reference. In regard to the alleged victimization of Mr. Geoffrey Eudra Marni Kerry, Mr. Conde said -

After a very careful perusal of the files, which includes a signed statement, made by Geoffrey Eudra Marni Kerry, I am of the definite opinion that there is no foundation whatsoever in the allegation that there was improper dismissal or victimization of Mr. Kerry.

I have here a copy of a statutory declaration made by Mr. Kerry, and I understand that certain penalties are incurred by any one who makes a false declaration of that kind. I ask leave to have the declaration incorporated in Hansard.

Leave granted.

Mr HARRISON - The declaration is as follows: -

I, Marine Kerry, of North Sydney, salesman, do solemnly and sincerely declare:

1.   On the 20th September, 1945, areport of Mr. Harrison's speech in Parliament dealing with munitions disposals was drawn to my notice and I noticed that several of the articles mentioned were ones I had handled, particularly work benches and hot water heater.

2.   Later that morning, a Mr. 8. 6. Cohen, Chief Disposals Officer, called me into his office and showed me the cutting. He then referred to the disclosure of information from within the department and drew my attention to the penalties, producing at the same time a copy of the National Security Regulations.

He then said, " Did you disclose this information to Mr. Harrison1 " I replied, " I most certainly did not," He then said, " Its very queer that Mr. Harrison has all the figures correct and he could only have obtained them from someone very closely associated with the deal". I again replied, "I did not inform Mr. Harrison. ".

3.   Later that morning, the Liquidation Officer, a Mr. Hannelly, called me to his office. Present were Mr. Cohen, Mr. Curran (in charge of Auction Sales), and myself. Mr. Hannelly cross-examined me about the report and finally asked me if I had been to Mr. Harrison. Again I replied, "Emphatically No'." I then drew Mr. Hannelly's attention to the fact that I had brought the Sydney Morning Herald advertisement offering the heater at £250 to him, purely on academic interest. Mr. Hannelly said, " That was so". Mr. Hannelly then requested me to make a report on the heater and benches and submit it to him, which I did on the 21 st September last.

4.   Mr. Cohen,did' say to certain people at the top of his voice, " I have- a traitor in my section and I know who he is, "-. As a result, X was given the cold shoulder in certain quarters.

5.   On Tuesday night the 25th September, on Or about 5 p.m., the administrative officer informed me that Mr. Sharpe, the Staff Inspector, wished to see me at once. Mr. Sharpe then informed me that my services would be terminated from 12th October, 1945. I then asked him whether this action was because T was accused of being an informer and traitor and he replied, "No", but that as private treaty has now been completed, a tut m lief of others would be getting their dismiss!) 1 notices. fi. On ' Friday, the 28th September, I was instructed to report to Mr. Hannelly's office at about 10.45 a.m., and Mr. Hannelly handed me my .dismissal notice expiring on the 12th October. While T was discussing it Mr. Byrne came into the office and I got up and left.

About fifteen minutes later. I was again instructed to go to Mr. Hannelly's office and Mr. Byrne was still present. Mr. Byrne asked me to" sit down and then said Mr. Hannelly -had been telling him of the trouble and asked me to tell the whole story. I detailed the facts leading up to. the offers and the rejections by Mr. Cohen. I then informed Mr. Byrne that a communication had been sent to Mr. Harrison askins for a letter clearing my name. Mr. Byrne replied. " I wish von had not done that as the department .may become involved." I replied that such action had been forced on me bv the high-handed action of his senior officers and I felt I was- being" made a political scape- }at. I then told him I had intended to resign in any case during October and I objected to leaving the department under a cloud. Mr Byrne then said, " I am going to ask you a question which I want you to reply to on your word of honour. Did you inform Mr. Harrison of the matter referred to in the press ? " 1 replied, ' I did not and have never met the man, either directly or indirectly in my life."

Mr.Byrne then said, " Have you got your- termination notice, with you? I believe you. Please let me have it." I handed it to him, h* read it through and then said, " I would be glad if you would disregard this notice and 1 promise you 1 will look into the whole matter very thoroughly. Now you have told mc, you had intended to resign, in any case, can you give me any idea when you are likely to be leaving us." 1 replied, " the 19th October ". and he said, " Will you please let me have « memorandum to that effect."

7.   About 3.45 p.m. .the same day, I wa.again summoned to Mr. Byrne's office', present Byrne, Pattison, Sharpe, Hannelly and myself. Mr. Byrne said he had. been looking over the papers in connexion with my case and . had come to the conclusion that, although I had confirmed my previous statements, he wa> ' satisfied that offers had been made as I had said, but the fact remained that offers could not have been accepted because the firms were outside the munitions block. He also said he felt sure no good would come from any further inquiry as he knew ill-feeling existed between Cohen and myself and did no.t think any direct accusation could be proved against Cohen.

8.   On or about 4.45 p.m. the same day, I was again summoned to Mr. Byrne's office, when Mr. Hannelly was also present. Mr. Byrne then said, after my five years service, he hoped I would not- leave with any hard feelings towards, the department. I .then said that, while he and Mr. Hannelly knew of Mr. Harrison's letter, the floor did not know of it, and still had doubts and looked askance at me. 1 think I said that Mr. Cohen should apologize publicly and clear- my name. Mr. Byrne then said, " I agree with you and if he is not man enough to do it, I will do it for him." He also instructed Mr. Han nelly to be present. I left about 5.10 p.m. and Mr. Cohen went in.

9.   On Tuesday, the 2nd October, I showed Mr. Hannelly the letter from Mr. Harrison, and said I was going down to show it to Mr. Byrne.

10.   On Wednesday night, the 3rd October at 4.50 p.m., Mr. Cohen and Mr. Hannelly came into the section, called the staff together, when Mr.' Cohen apologized for his part in the matter and Mr. Hannelly supported him on behalf of the department. Earlier, Mr. Cohen wanted to apologize privately in his office, and accepted in reply their apology, and said that I hoped certain officers would be more careful in future before they decided an innocent man was guilty of an offence, without giving him- a chance to prove his innocence.

1   1. The next day, the 4th October, ' Mr. Harrison's further statement in the House appeared in the evening newspapers.

12.   The next morning, Mr. Byrne sent for me and produced a teleprinter of the speech. He said he had todraft a reply immediately and could I assist him which of Mr. Harrison's statements were correct. I replied that, except for certain minor details, in the main it was all correct. It was rushed on me, and I had not time , to consider whether or not I had informed Mr. Harrison of all the details as stated, but on reading a printed copy of the speech later, except as stated for a few minute details, such as reference to the staff superintendent, instead of senior officer, the main facts were correct.

13.   Later, when speaking to Mr. Byrne, I. referred to the apology on the Wednesday. Mr. Byrne then denied that any apology had been made and called Mr. Hannelly down. Mr. Hannelly said, " What have I got to apologize to you for." Both then adopted an aggressive attitude. . t

14.   At the time of the said offers, private treaty was definitely in force which was on or about March of this year.

15.   The disposal section was formed with the object of obtaining buyers, whether under defence or not, and lots of assets have been sold on the same basis as I obtained these offers for the benches and hot-water heater. The whole staff of the section is employed on a similar basis.

16.   No other officer received a similar notice or has been queried or suspected to my knowledge of giving the information to Mr. Harrison, and it was only because of my knowledge as to making of the offers that I was suspected. I know nothing of the grinding machine and only what I heard lately about the bogie wheels.

M.   Kerry.

Mr. Kerryhadbeen , given notice, but the notice was torn up when he told Mr. Byrne that he had never seen me before. However, he was so severely victimized subsequently that he had to leave the section.

In connexion with reference No, 2, Mr. Conde says -

During the course of my investigations I have examined the Auditor-General's special report, dated 3rd December, 1045, addressed to the Minister of Home Security and Works, the Honorable H. P. Lazzarini, on the accounts and transactions of the Commonwealth Salvage Commission. In view of the Auditor-General's comments in this special report, I feel that, the terms of reference do not call forany further comment on my part.

Now let me read the report of the AuditorGeneral for the year 1944-45 in which he bitterly criticized the administration of the Salvage Commission. Here are his words -

Contract with Firm of Salvage Distributors.- " There are other features in this contract which, in normal circumstances, would be considered far from satisfactory: -

No tenders were apparently 'called.

Dealing was made with a Melbourne syndicate, not yet registered as a firm, in respect of materials lying in Sydney and Brisbane.

The syndicate apparently had no stores under its own control in Brisbane or Sydney. This had caused a number of difficulties with deliveries to apparently " agent " firms.

Terms which appeared unusually easy were made as regards use of commission's stores and delivery of materials at the commission's expense.

The mixing of " clothing " with " rag " in bulk sale.

Mr. Conde,when looking up the report of the committee appointed by the Minister, did not take into account the report of the Auditor-General, who so scathingly criticized the administration of the department. I propose to read extracts of letters sent to me by the Minister's own advisory committee. . I think that this is justified, in view of the fact that these men, who. had indicated their willingness to give evidence on oath, were not called. ' The first letter, from Mr. E. J. Millar, states -

In reference to the inquiry being held into the activities of the Commonwealth Salvage Commission, it is respectfully requested that the writer be given the opportunity of giving evidence.

When I read that letter to the Minister he said that Mr. Millar would be afforded an opportunity to give evidence, but he. was not called, and Mr. Conde does not know of the charges likely to be made by this man. The letter goes on -

Some time in 1945, Mr. Walker, then secretary of the Commonwealth Salvage Commission, entered our store, accompanied by two refugees and made a request that they be shownthe material referred to. According to the conversation between these people, it became obvious that Walker was negotiating a sale. Immediately Walker and his companions left our store, I rang the Sydney office of the Commonwealth Salvage Commission, and offered £112 per ton for a quantity of the material. The following day, Mr. Farthing, who was then Assistant State Controller of Salvage, rang and informed me thatWalker had sold the material to the refugees. At a later date, it was discovered that, despite the fact that my firm offered £112 per ton for certain of this material, Walker sold to the people referred to at £20 per ton.

That is a grave charge which should have called for an immediate inquiry.When the Governmentordered an inquiry this person should have immediately been called to give evidence. However, neither this man nor any other member of the advisory committee was called. Another letter, dated the 17th of April, is as follows: -

A few months ago I interviewed Mr. Walker, secretary of the Commonwealth Salvage Commission in Melbourne, and complained about the unfairness of the commission in selling huge quantities of material to refugees, withoutgiving the legitimate traders an opportunity of quoting for the said materials. Mr. Walker replied, "I called in Baron in an advisory capacity to the commission, with a request that he proceed to Sydney and Brisbane and in-: spect all materials available".

I then asked Walker why this man was called in and pointed out that Mr. K. McLeod Bol ton, of Sydney, had been gazetted honorary adviser to the commission, and also that an advisory panel, of which I, myself, was a member, was in existence. Walker refrained from answering this question, but did admit that, after Baron had inspected the material, he, Baron, submitted the following proposition: - Baron to form a company to be known as Associated Salvage Distributors and that this company purchase all Army textile salvage materials available throughout the Commonwealth.

Walker further stated that the commission accepted this proposition and signed a contract accordingly.

That contract was criticized by the Auditor-General because it was made with a firm that had not then been registered -

Upon my return to Sydney a few days later, I immediately arranged for a meeting of the local waste traders and explained the position to themembers present. It was decided that three members of the, trade interview Mr. Lazzarini in reference to these transactions and, despite the fact that Mr.Lazzarini agreed, to meet these gentlemen, they were informed, upon arrival at his rooms, that he would only interview one member. Mr. Bolton was the gentleman who saw Mr. Lazzarini. and, as a reward for hisefforts in attempting to straighten out matters, was called a liar.

Mr Lazzarini - Did he say that I called Mr. Bolton a liar.?

Mr HARRISON - He said-

Mr. Bultonwas the gentleman who saw Mr. Lazzarini and, as a reward for his efforts in attempting to straighten out matters, was called a liar.

Mr Lazzarini - That is a damned lie!

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