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Auditor-General called to investigate third Rudd staffer.

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Senator the Hon Michael Ronaldson Shadow Special Minister of State and Shadow Cabinet Secretary

The revelation that Maxine McKew's ministerial advisor, Kathleen Forrester, was an owner of Allen Consulting Group whilst her department awarded hundreds of thousands of dollars worth of contracts to her company should be investigated by the Auditor General.

"In Parliament today, Prime Minister Rudd announced that Maxine McKew's office will be investigated by the Government Staffing Committee about the probity of the contract," said Senator Ronaldson, Shadow Special Minister of State.

"The Government Staffing Committee is comprised of the Deputy Prime Minister, Julia Gillard, the Cabinet Secretary Senator John Faulkner and the Prime Minister's incoming Chief of Staff, Mr Alister Jordan.

"This serious issue requires more independent scrutiny.

"I have written today to the Auditor General requesting the Australian National Audit Office to investigate the probity of a contractual arrangement between the Department of Employment, Education and Workplace Relations and Allen Consulting Group.

"Specifically, I am concerned about contracts CN70857, CN118028 and CN128751 which were all awarded to Allen Consulting Group.

"When Ms Forrester commenced employment with Ms McKew she was still an equity owner in Allen Consulting Group and remained so until around a fortnight ago according to her own statement.

"Ms McKew's statement on 15 October 2008 was also prescient in what it omitted to say. In the statement Ms McKew claimed that Ms Forrester only advised the Deputy Secretary of the Department "of her previous employment" with Allen Consulting Group. In other words Ms Forrester clearly did not declare her equity interest.

"Following the revelations on 7 National News on 15 October 2008, Ms Forrester reportedly admitted in a statement that she held shares in Allen Consulting Group when contract CN118028 was awarded to the company she held shares in.

"Contract CN118028 is the most alarming of all these contracts because it was awarded by direct source and was for the purpose of "Developing the Structure for the National Early Years Workforce Strategy" - an issue that relates directly to Ms McKew's portfolio as Parliamentary Secretary for Early Childhood Education and Child Care.

"It is no coincidence that Ms Forrester who specialised in early childhood education issues at Allen Consulting Group, now advises Ms McKew on early childhood education issues.

"It beggars belief that Ms McKew's advisor on early education was not involved in the decision making process about the awarding of a consultancy contract on early education.

"This issue appears to be as much of a breach of basic probity standards and the Ministerial Staff Code of Conduct as was the awarding of the CMAX contract which is currently being investigated by the Auditor General," said Senator Ronaldson, Shadow Special Minister of State.