The Australian National Audit Office has completed its report into Utegate, clearing Swan and Rudd of any impropriety and fingers Grech as the villain in the piece while also commenting adversely on certain issues in Treasury office procedures not directly connected to Utegate
If you ever wondered how the Federal Government might spend $225,000 (ANAO p.35) you can read the report, magnificently entitled “Representations to the Department of the Treasury in Relation to Motor Dealer Financing Arrangements” here.
Swanning Through The Inquiry
While I agree with ANAO that Grech has abused his position as a public service official by leaking documents to the opposition, the ANAO report does not adequately address the evidence that Swan used his position to advance John Grant’s application to OzCar. This was one of the central allegations of the affair. Swan is a lucky boy.
What Have You Got Against Swan ?
As I detailed in my original post on Utegate, “Not Your Average Constituent” the criticisms that Swan faced over Utegate were over process, not outcomes.
All agree and it is a matter of fact that Grant did not receive any money from Ozcar. Nevertheless a review of events surrounding John Grant’s OzCar application prima facie showed that Swan championed Grant’s file.
A range of commentators from George Megalogenis, regarded as non-partisan (on Insiders 21st June), Bernard Keane of Crikey (of the left), Phillip Coorey of the Sydney Morning Herald (on the right) and others (’Red’ Kerry O’Brien of the ABC; David Crowe, Aust. Fin. Review below) have noted that Swan was mighty economical with the facts in Parliament when he described assistance rendered by Treasury to John Grant as no different to any other person.
The ANAO Investigation
Explosive testimony of Godwin Grech, the Treasury official in charge of OzCar, at a Senate Estimates Committee hearing on July 19th, implied that Kevin Rudd and Wayne Swan had sought to engineer a favourable outcome for a Labor Party donor, John Grant, in regard to his application to OzCar. A major parliamentary debate occurred in which Malcolm Turnbull, leader of the Opposition demanded Rudd resign on the supposed basis that Rudd has misled parliament.
Rudd denied that he had acted improperly and the basis of Grech’s testimony, an email purporting to come from the Office of the Prime Minister, turned out to be forged by Grech himself.
Subsequently, as the ANAO states in the preable to its report:
In two letters dated 19 and 22 June 2009, the Prime Minister requested a
performance audit of a range of matters relating to representations to the
Treasury regarding automotive finance arrangements for car dealers. In
response to these requests, the Auditor‐General decided that ANAO would
undertake a performance audit under section 18 of the Auditor‐General Act 1997
(Auditor‐General Act). The audit objective, based on the matters raised in the
Prime Minister’s correspondence and in the Parliament, was to examine and
• any representations to the Treasury since October 2008 from all sources
regarding automotive finance arrangements for car dealers, including
any made in relation to John Grant Motors;
• the nature of these representations;
• the manner in which the representations were responded to by officials,
having regard to any relevant standards and procedures; and
• any related administrative matters that came to attention.
ANAO on Treasurer’s Office Interactions With Grant
When questioned in Parliament on June 4, Swan said of his interactions with Grant:
It is the case that Mr Grant made representations to my office, and he was referred on to the SPV, just like everybody else.
Swan’s contacts with Grant were definitely NOT like ‘everybody else’.
Grant was the ONLY OzCar applicant to have received a phone call from Swan.
Swan said that the only reason he called Grant was because Bernie Ripoll, the MP for Oxley had asked him to phone Grant (ANAO p.42) and that if any other MP had approached Swan and asked them to call the dealer then he would have. This defence has the advantage for Swan of being untestable. We just have to take his word for it, and ANAO does.
Ripoll was the MP that Grant had contacted in regard to OzCar. Although Ripoll was not Grant’s MP (Rudd is), Grant had worked in a motor dealership in Oxley for many years and knew Ripoll.
After speaking to Grant, Swan asked his Departmental Liason Officer, Andrew Thomas to contact Treasury (i.e Grech). Thomas contacted Grech who called Grant. Grech then contacted Thomas who then also called Grant personally.
Thomas then called Grech and conveyed the fact that Grant knew Rudd to Grech.
ANAO did not mention that of all applicants ONLY Grant received phone calls from the Treasurer himself, his personal staff AND Godwin Grech, the operator of the OzCar facility, nor did it mention that all of these calls were received by Grant on the same day.
Later that same evening Thomas emailed Swan on the progress of Grant’s application including details of what Grech planned to do for Grant, then contacted Grech to inform him that such an update had been sent to Swan. After un update on Grant’s file from Grech a week later, Thomas informed Grech that the updates were being forwarded to Swan at his home address.
Grech testified to ANAO that when he rang Grant, Grant seemed very familiar with the Prime Minister and Treasurer referring to them by their first names, Kevin and Wayne. Grech also commented that Grant projected a total expectation that Grech would fix his problem.
All of the above gave Grech the clear picture that Grant was a person of special interest to Swan and possibly Rudd and that therefore Grech should take a special interest in advancing Grant’s file.
I find myself in agreement with Grech.
If I were Grant I would have felt very assured by such rolls-royce attention especially since several other dealers who made OzCar inquiries via their MPs received absolutely no phone calls or assistance whatever.
For example, Victorian car dealer Graeme Nelson contacted his local MP, Sharman Stone on March 31 who then contacted Mr. Swan. Absolutely nothing has happened for Graeme Nelson since.
For many other examples, see David Crowe, Chief Political Correspondent for The Australian Financial Review on 24-Jun-2009 in his article, ‘Some Dealers Are More Equal Than Others’ which patently shows that not every enquiry from a car dealer about Ozcar was treated the same.
Thomas admitted he told Grech that Grant knew Rudd and Swan, but said he mentioned it in an offhand way, as mere trivia. ANAO appears to have accepted this uncritically (ANAO, p.86).
ANAO did ask Thomas why Grant’s application was the ONLY time he specifically indicated to Grech that updates on an application were going to Swan’s home computer or, since it was apparently a standard work practice, why he specifically indicated this at all..
Thomas replied that he had meant to indicate to Grech that it was not necessary to bother Swan with further updates on Grant’s file, realised his email was not clear on this and intended to, but did not, telephone Grech to clarify.
I found Thomas’ explanation on this plausible as, by Feb. 27 Swan had been fully appraised that Grech was expending the maximum possible effort on Grant. There was nothing further Grech could do, having personally passed Grant’s contact details to a financier, except escort Grant personally to the doors of the Royal Australian Mint and load up a Ute full of gold bars.
But OTOH, it is perfectly understandable that Grech interpereted Thomas’s remarks to mean ‘keep Swan informed because he’s really interested in this one’. This is the most natural meaning of Thomas’ remarks given his highly assiduous attention to Grant’s file.
As to Swan’s concern over Grant’s application, ANAO accepted Swan and Thomas’s testimony that Swan was purely motivated by a desire to get the crucial OzCar financing verhicle up and running as a means of protecting Australian jobs given the economic downturn. (ANAO p.15).
I would say ANAO is being willingly naive.
The clustering of attention given to Grant, such attention given to no other dealer, and the emphasis on personal contacts in the interactions between those involved indicate, as Grech said, that Mr. Grant is ‘not your average constituent’.
This becomes clearer when examing the next phase of Grant’s application which is the discussion of Grant’s case in Grech’s meetings with Ford Credit.
ANAO and Ford Credit
ANAO chastises Grech for his actions in raising Grant’s file in his meeting on Feb. 23 with Ford Credit. Ford Credit wanted access to the OzCar SPV, a financing facility comprising more than half a billion dollars of government money. At that meeting the case of Grant was ‘substantially discussed’ with Ford Credit and Grant’s mobile phone number provided to Ford Credit.
ANAO, chastising Grech said:
as the commercial arrangements with Ford Credit and
other financiers that were expected to participate in the SPV had not been
settled, it was inadvisable for Treasury to do more than either referring dealers
to potential financiers known to be active in the market, or asking the
contracted Program Manager to provide assistance.
ANAO feels that Grech’s interactions with Ford Credit may consitute a Public Service Code of Conduct violation:
ANAO’s examination of the implementation phase of the policy also
raised serious questions as to whether the Code of Conduct has been breached
by Mr Grech. Specifically, ANAO’s audit work included examination of
evidence that indicated:
• confidentiality about dealings with Ministers and their staff was not
maintained in relation to important elements of the development and
implementation of the SPV, and the handling of some representations
referred to Treasury by Ministers or their Offices;
• some of the email communications and interactions with third parties
ANAO does not mention that Andrew Thomas of Swan’s personal staff had been personally appraised by Grech that he intended to raise Grant’s file with Ford Credit, nor does ANAO mention, in this context of chatisement, that Thomas specifically informed Swan that Grech intended to do this. Nor does ANAO comment that Thomas in fact enthusiastically commended Grech for his assiduous care of Grant’s application, including this improper raising of Grant’s file in the Ford Credit meeting.
One can only learn this by reading Grech’s testimony in the Appendix of the report.
ANAO is correct to chastise Grech for raising Grant’s file with Ford Credit. But Grech informed Thomas, who informed Swan, of his intended actions. No objection was forthcoming; rather praise!
Grech was right to comment:
It was really at this stage that I formed the view that Mr Grant was not your average constituent.
Grech knew he was doing wrong and was getting praise for it from Swan’s office.
Here is the text of Charlton’s enthusiastic Feb. 27 email to Grech in which Thomas should be aware Grech has violated the Public Service Code of Conduct:
‘Godwin, we really appreciate this. Just so you are aware these emails are going through to the Treasurer’s home number’.
Here is Charlton’s Feb 20 email to Swan alerting Swan to the alacrity of Charlton and Grech’s response to Grech:
“‘Treasurer, both Godwin Grech and I have spoken to John Grant this evening.”
ANAO, Grech and Dealer 7
It seems that ANAO is quite happy for Grech to take ALL the blame for Treasury irregularities in the OzCar affair as far as Grant’s application goes. It is very willing, too willing in my view, to completely exonerate Swan and Thomas.
The most powerful indication of this is ANAO’s finding of improper comduct against Grech in its description of the case of “Dealer 7” whom ANAO alleges Grech gave favouritism to on the basis that Dealer 7 is a Liberal party supporter and donor. (ANAO p.42)
What ANAO does not mention is that Dealer 7 was ringing Grech three or four times per day on the progress of his application and threatening to commit suicide should his application for financing fail. In addition members of Dealer 7’s family were ringing Grech also to beg him to grant the application. Grech claimed he raised Dealer 7’s political affiliation with his contact at Credit Suisse, also a Liberal Party supporter in an effort to stop a suicide from happening. (ANAO, p. 93)
Grech had raised the issue of Dealer 7’s suicidal state with about half-a-dozen superiors and colleagues but they gave him no advice on how to deal with the matter.
Once again, one is left to Grech’s testimony to find any record of these facts.
Grech Deserves His Punishment
Grech forged an email and has improperly tried to engineer the downfall of Rudd, abusing his trust and position, so he deserves serious punishment. But it appears to me ANAO is being a little too willing to load Grech with blame to the exclusion of others and that it is actually ignored information germane to his defence.
It is almost certain that Grech has been a Liberal Party mole within the public service. Rudd no doubt wishes to punish him for this. ANAO cannot be unaware of Rudd’s intentions. I think, based on the omission of evidence favourable to Grech in regard to Dealer 7, that ANAO is wishing to serve the political interests of Rudd by providing him with ‘impartial’ evidence of Grech bias towards and service of the Liberal Party.
This undeserved, or at least unnuanced, allegation of bias in the case of Dealer 7 has the additional effect of drawing attention away from Swan’s championing of the Grant file.
As a personal reality check I decided to email/research the five media identities I had read who had indicated a belief that Swan had championed Grant’s file and see if they still held that opinion. Of those five I found that one, Bernard Keane of Crikey had indeed been moved by ANAO to the ‘Swan-is-clean’ camp
and that John Warhurst of ANU and George Megalogenis of The Australian felt as I did, that ANAO did not clear Swan.
Bernard Keane’s change of opinion is here, ‘Rudd and Swan Totally Exonerated By Auditor-General Report’
George Megalogenis’ opinion on ANAO/Swan can be read in his Blog Post comments at Liberal Mole Now Strife Of The Party, replying to me aka Reverse Bungee
John Warhurst was kind enough to respond to a personal email inquiry. He said despite ANAO,
I haven’t changed my mind basically. I still think there was some differential treatment of Grant and there is probably still more to come out. We may never know the full story. I don’t regard the Auditor-General’s report as the last word. I agree with a lot of what you have to say.
Here’s how I deduce Swan championed Grant’s file:
Let’s say you or I contacted an MP and said we wanted the Treasurer, in the midst of the flamin’ GFC, to give us a personal phone call. What would the likely answer be ? For crying out loud that’s Grech’s job, not Swan’s.
What makes Grant think that Swan (known as ‘Wayne’ to Grant) will
call him back ?
Why did Swan call Grant and no other dealer if not because of their personal relationship based on Grant’s donations/fundraising for Labor?
Why did Andrew Thomas call Grant and no other dealer ?
Why is Thomas so active in contacting Grant and Grech (several times) and reporting back to Swan all in the same day (in fact most of this activity occurs in just a few hours) ? In one day Grant gets calls from the Treasurer, his personal assistant and Grech (Mr. OzCar).
Grech cooks up a scheme to help Grant involving improper approaches to Ford Credit and worthy of formal Public Service censure according to ANAO and runs it by Thomas. Thomas praises him for it!
Isn’t Grech absolutely correct at this stage, given all the above
in deducing that Grant is not your average constituent ?
After giving Grant’s mobile phone number to Ford Credit, Grech reports back to Thomas again. Thomas is not concerned about the obvious impropriety and emails Grech saying ‘Godwin, we really appreciate this.’ Who is the ‘we’ that greatly appreciates improper conduct involving Ford Credit: Thomas and… ?
Utegate hits the fan. Swan disappears from view. Why?
Swan gives one interview in Utegate week and refuses to answer pertinent questions about his relationship with Grant. Why ?
Swan will not say how many dealers other than Grant that he personally called. Why ?
Where Dat Swan ?
Swan went to ground, as did Liberal Senator Eric Abetz, in the week following the Utegate scandal making himself unavailable for media comment, except for one ABC radio interview. For an innocent man he acted very guiltily. At least Swan did one interview whereas Abetz did none. But when Swan was being interviewed he tried his best NOT to answer questions.
Knowing What The Boss Wants
ANAO ingratiates itself its political masters by not asking too many hard questions about Swan’s championing of Grant’s file and accepting uncritically superficial explanations from Thomas and Swan.
ANAO is doing as Swan exasperatedly told ABC Radio to do: ‘ask the right questions’, which are not the ones that examines Swan’s relationship to Grant and the effect that had on his OzCar application. It then went on to load Grech with all the blame for Utegate and delivered his head on a platter to Rudd by reporting a tunnel-visioned version of Grech’s use of Dealer 7 Liberal Party’s links.
ANAO wrote it’s report with its eyes half-closed, but its ears well open. It has acted an an exemplary public service Wise Monkey “See no evil, hear no evil, speak no evil (except whatever the boss wants).”