Paul Whyte used money for affordable housing to pay off Mosman Park mansion, CCC hears


Western Australia’s corruption watchdog has exposed the alleged complex money trail through which disgraced senior public servant Paul Whyte obtained cash for a deposit on a $2.9 million luxury riverside home in Perth.

A Corruption and Crime Commission (CCC) hearing was told Whyte allegedly offered Department of Housing work on a project in South Hedland to a friend’s company.

Part of the payment that company received was then transferred to Whyte’s personal account to help pay for the deposit on his Mosman Park house.

Counsel assisting the CCC Nadia Pantano told the hearing the company in question, steel fabricator CR Steel, never actually carried out any of the work but none of the money was ever repaid to the department.

Whyte’s friend was the former director of CR Steel, Matthew Hunt, who denied acting improperly.

Whyte has already pleaded guilty to stealing more than $22 million of taxpayers’ money when he was a former senior executive in the Department of Housing and is in jail awaiting sentencing.

The CCC is now investigating possible separate serious misconduct within the department.

It is exploring allegations Whyte siphoned several million dollars from an affordable housing project in South Hedland to pay for the Mosman Park house in 2012-13.

Public money paid for work never completed

The inquiry heard yesterday his de facto partner Christine Seiver paid for the $250,000 deposit with three separate cheques, including the last one for $150,000 on September 18, 2012.

It is that sum the CCC alleges Mr Hunt took out of the business account of CR Steel on the same day.

Matthew Hunt denied any wrongdoing during his testimony to a CCC inquiry into disgraced public servant Paul Whyte.(ABC News: Nicolas Perpitch)

“What was paid was two cheques drawn by you to Mr Whyte from the business’s bank account for a deposit for his house,” Ms Pantano said.

Mr Hunt said he and Whyte had been friends for about 40 years and were also involved in a horse racing syndicate together, which only ended when Whyte was arrested by police in November 2019.

Mr Hunt explained that in mid-2011 Whyte loaned CR Steel $120,000 to help cover shortfalls in the company’s payroll for its roughly 50 employees.

He said he thought Whyte had obtained the money from “a big win” on the horses. “I’m assuming it was from a large bet,” Mr Hunt said.

But Ms Pantano told the hearing the funds had actually been deposited in CR Steel’s account in increments, and had originally come from the Department of Housing via various other accounts.

A Google Street View picture of a big house.
The CCC is exploring allegations Whyte siphoned money from a government housing project to pay for his Mosman Park home.(Supplied: Google Street View)

Then in mid-July 2012, Mr Hunt said Whyte contacted him to say he might have some work for CR Steel on the temporary accommodation camp for workers building the Department of Housing’s South Hedland affordable housing project, named the Hamilton Precinct.

He said they were awarded the contract in September and, unusually, it included a stipulation that 40 per cent of the contract would be paid to CR Steel “on procurement”.

On September 11, 2012 Mr Hunt emailed Whyte two invoices worth $374,470 for the 40 per cent, which Whyte approved the same day.

The money was deposited by the department into CR Steel’s account three days later.

But the hearing heard CR Steel never did the work and never repaid the money.

Mr Hunt told the hearing the company never received the specifications for the steel work from Whyte and he told them there had been “delays”.

He agreed CR Steel had not carried out any work on the project and kept the money.

CR Steel went into administration in 2015.

AFL coach John Worsfold linked to proceedings

Its two other directors were David Lines and former West Coast Eagles and Essendon coach John Worsfold, who Mr Hunt said was not as involved in the company’s operations as he and Mr Lines.

Ms Pantano asked Mr Hunt if he had discussions with the other directors about repaying the money.

He replied “not really” and only once had a brief discussion with Mr Lines about it.

“What value for money did the department get for the 40 per cent they paid CR steel, if nothing was done?,” Ms Pantano asked.

“What complicates this is no work was done for the $374,000.

“You were the director of a company that accepted money for work that was never done.

“Did you make any attempt at any point to repay the money?”

Mr Hunt replied he did not think they had to.

A stern looking middle aged man stands on an AFL match field
Former West Coast Eagles coach John Worsfold was listed as a director of CR Steel.(AAP: Michael Dodge)

“I didn’t think the job had been cancelled completely and we had to repay it,” he said.

“It was going to happen at some point.”

Ms Pantano then revealed that four days after the $374,470 was deposited by the department into the CR Steel account, $150,000 was withdrawn.

It was around this time, Mr Hunt said, that Whyte had suddenly demanded the repayment of his $120,00 loan to CR Steel.

“Did you discuss he’d transfer the money into CR Steel’s bank account in order for you to be able to provide him with a $150,000 cheque for his deposit?” Ms Pantano asked Mr Hunt.

“No, absolutely not,” he replied. “It was two different matters. One was a project. We were simply paying his money back.

“The first I heard about him putting an offer on his house, was when he said needed the money back.”

The hearing continues.



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CCC hears corrupt bureaucrat Paul Whyte used Hamilton Fly Camp funds to buy lavish home


Former senior bureaucrat Paul Whyte allegedly used Housing Department funds to buy a $2.9 million home as part of “one of the largest cases of public sector fraud in Australia’s history”, WA’s Corruption and Crime Commission has been told.

The CCC is exploring the possibility millions of dollars of were misappropriated by Paul Whyte for personal gain in 2012 and 2013.

Counsel assisting the commission Nadia Pantano told a public hearing the funds should have been used for temporary accommodation for workers in the state’s Pilbara, known as Hamilton Fly Camp.

“The commission has information to indicate that funds intended for the construction of the fly camp were misappropriated by Mr Whyte,” Ms Pantano said.

“Instead of funding going to support the housing shortage in the state’s north west, it paid for a $2.9 million dollar house … a house occupied until recently by Mr Whyte.”

Ms Pantano told the commission payments made their way from the department to a contractor to an intermediary, before ultimately paying for Whyte’s home.

Paul Whyte’s house was allegedly purchased with $2.9 million of public funds.(ABC News: Rick Harvey)

She said the Housing Department had agreed to buy 100 worker accommodation units in a 440-dwelling development near South Hedland, to be administered by BHP.

The project was allocated $41 million via the Royalties for Regions housing for workers program in June 2012.

Hamilton Fly Camp, a temporary accommodation project for workers, was to be the first to be set up.

Whyte admitted $20 million fraud

The commission is holding public hearings into Whyte’s activities with the Department of Housing in 2012-2013.

Whyte, a former Department of Communities executive, pleaded guilty in June to 530 corruption charges related to separate matters.

A man in a blue shirt talks into a microphone.
Whyte was behind “one of the largest cases of public sector fraud in Australia’s history”, the hearing was told.(ABC News: Hugh Sando)

The massive fraud, totalling more than $20 million, involved false invoicing from shelf companies over several years.

Ms Pantano said Whyte came to the attention of the CCC two years ago, via a referral from the Australian Transaction Reports and Analysis Centre, AUSTRAC.

“The referral was seemingly innocuous,” she said.

Wife in the dark on finances

Whyte’s partner Christine Seiver told the hearing she had little knowledge of his financial dealings, which he did not discuss with her.

“I wasn’t given a lot of information,” she said.

She was not working at the time, while Whyte had his government job and was also involved in horse breeding, she said.

An artist's impression of proposed housing on a residential street.
Hamilton Fly Camp was meant to house workers in Port Hedland, but part of the funding was allegedly used to purchase Whyte’s home.(Supplied: Town of Port Hedland)

Ms Seiver said it was not on her “radar” to buy a house at the time the $2.9 million home was purchased.

“[I] don’t recall specifics,” she said.

Initially the plan was to sell their existing home before buying the new one, but that changed, with Whyte telling his partner they would rent out the first one instead, and he would get a personal loan.

Ms Pantano asked her why the first property was not put on the market.

“You’ll have to ask Paul that,” she responded.

A tight head and shoulders shot of a woman with blonde hair and dark sunglasses shielding her face while walking on the street.
Christine Seiver says she “wasn’t given a lot of information” about Mr Whyte’s financial dealings.(ABC News: Nicolas Perpitch)

“The whole episode is extremely confusing.”

The Department of Housing became part of the multi-agency Department of Communities in 2017.

The hearing is continuing.



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CCC clears Premier’s former chief-of-staff


Queensland’s corruption watchdog has cleared Premier Annastacia Palaszczuk’s former right hand man of improper use of his position to gain a government grant for a business venture.

The Crime and Corruption Commission publicly released on Wednesday its report into former chief-of-staff David Barbagallo over whether he misused his position to obtain $267,500 in taxpayer funding for a company he was a director and shareholder of to develop an app.

The CruiseTraka app was designed to allow passengers to share their cruise experience with family and friends via social media and email.

The investigation did not find any evidence Mr Barbagallo misused his position to obtain funding from the Advance Queensland Business Development (AQBD) Fund, but he failed to “fully and accurately” declare his non-pecuniary interests, the CCC stated.

“The CCC considers Mr Barbagallo’s failure to declare his interests to the Premier breached certain legislative and policy requirements of his former position, which would have provided grounds for consideration of disciplinary action if he had not resigned from his position.”

Barbagallo’s Declaration of Interests forms, which are required to be reviewed by Ms Palaszczuk, were not signed or dated by the Premier.

“Barbagallo maintains that he verbally told the Premier and the Director-General about his role in Fortress Capstone, and about Fortress Capstone’s application for and awarding of co-investment funding from the AQBD Fund,” the report stated.

“The state of the evidence is such that the CCC was unable to determine whether the Premier and the Director-General were aware of this information being provided by Barbagallo or through other means.”

While the decision to award funding to Fortress Capstone was not the result of any improper influence, the investigation highlighted how conflicts of interests, if not properly managed, could create public perceptions of impropriety, the CCC said.

It said Mr Barbagallo held a position of high office and trust as the Premier’s chief adviser, which afforded him considerable influence within the state government and there was an expectation that he behaved in an exemplary manner.

Mr Barbagallo finished up in October last year and had denied any wrongdoing.

Taxpayers were billed $27,235 for Ernst and Young’s review of the $267,500 Advance Queensland Business Development Fund co-investment awarded to Fortress Capstone.



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CCC Commissioner John McKechnie set to be out of a job after re-appointment blocked again


Updated

April 23, 2020 21:33:13

The head of WA’s corruption watchdog has likened his failure to be reappointed to a “decapitation” of the organisation, amid allegations by the state’s Premier a probe of parliamentary expenses is behind the decision.

Key points:

  • A committee made up of MPs rejected the re-appointment
  • But it denies this was due to a probe of parliamentary expenses
  • The Premier says the move is “self-interest” by the Liberal Party

Corruption and Crime Commission (CCC) head John McKechnie’s time in the role appears over, with the parliamentary committee responsible for choosing the organisation’s commissioner again vetoing a State Government attempt to extend his term by five years.

Mr McKechnie’s position will now expire on April 28, ending a five-year term that has seen him lead high-profile investigations — including scrutiny of the Department of Communities, North Metropolitan Health Service, Tokyo trade office and MP expenses.

“I have to say I’ve seen some strange political things in my time, and this is probably up there as a gold medal contender,” Mr McKetchnie told ABC Radio Perth.

“Why anybody would think it’s a good idea to decapitate the corruption commission when it’s in the middle of about seven or eight major investigations, I don’t know.”

In a statement earlier today, the parliamentary committee overseeing the CCC said it was “unable to reach either a bipartisan or a majority decision”, meaning opposition came from at least two members of the four-person body.

In an earlier decision, it said it had only failed to reach bi-partisan agreement.

The committee is made up of Labor MPs Margaret Quirk and Matthew Hughes, Liberal MP Jim Chown and Greens MP Alison Xamon.

Mr McKechnie said he was still unaware of the reasons why the committee failed to agree.

“It seems to me we face a wait of months before a new commissioner can be appointed,” he said.

“And if anybody thought getting rid of me will stop the work, I think they’d be sadly mistaken, because whoever takes over will continue that work.”

Mr McKechnie said he would have liked to have continued in the role.

“I do think I have something to offer the state in terms of wisdom and guidance of these important investigations — others have made the decision that is not going to happen.”

Claims veto linked to Parliament probe

In the statement issued today, committee chairwoman and Labor MP Ms Quirk slapped down commentary from within her own party’s leadership — remarks made by Premier Mark McGowan and Attorney-General John Quigley — alleging improper motives with the vote of Liberal MP Jim Chown, labelling it “unfounded public speculation”.

Mr McGowan and Mr Quigley had alleged Mr Chown vetoed against Mr McKechnie’s re-appointment because of the CCC’s investigations into Upper House Liberals including Phil Edman.

Under committee rules, the votes of individual MPs are kept secret.

“Because of unfounded public speculation about the motives for the committee’s previous deliberations, it has resolved to unequivocally reject any suggestion that the motivation for any members not supporting the appointment recommendation was the Corruption and Crime Commission’s focus on parliamentary electoral allowances,” Ms Quirk’s statement said.

“Discussion on what did or did not occur in the committee, and imputing motives to individuals, does not progress a constructive way forward.

“The nature of those discussions is not detailed because it includes information provided by third parties in confidence.”

Ms Quirk said all three nominees put forward for the role of CCC commissioner were described as “qualified for appointment to the position”, also pointing out that commission appointees had been blocked previously.

Comparisons with Untouchables boss

The Government has remained adamant Mr McKechnie should be re-appointed.

Mr McGowan said Mr McKechnie’s re-appointment being blocked again was “very frustrating and very, very concerning”.

“He has been a corruption fighter unlike any we have ever seen before in Western Australia,” Mr McGowan said.

“Mr McKechnie has been the Eliot Ness of Western Australia.

Ness was an American federal agent famous for his efforts to bring down Al Capone and enforcing prohibition in Chicago in the 1930s.

Mr McGowan again took aim at Liberal MPs, claiming it was their fault the re-appointment had been blocked.

“How can you have someone who has been so successful in uncovering corruption blocked by people with self-interest in blocking his re-appointment?” he said.

“It is wrong and it is outrageous.”

The Government’s only hope of Mr McKechnie’s term being extended is if State Parliament passes extraordinary legislation to keep him in the job, a step that is extremely unlikely given the Liberals, Nationals and key crossbenchers have all voiced their opposition — meaning Labor would not have the numbers to get it through the Upper House.

The Greens are yet to decide a position but leader Alison Xamon said this represented an “unprecedented attempt to bypass appropriate channels” and was “deeply disturbing”.

All five conservative crossbenchers have indicated they either would or were likely to vote against the legislation.

With the Liberals and Nationals opposed, the Government would need the support of the Greens and at least one crossbencher.

WA Liberal Leader Liza Harvey said while she “unequivocally supported” the reappointment of Mr McKechnie, she did not get a vote on the committee.

Topics:

state-parliament,

states-and-territories,

government-and-politics,

corruption,

perth-6000,

wa

First posted

April 23, 2020 19:20:15



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