The Great Telecard Coverup

By Margo Kingston
November 24, 2000
Source: Webdiary SMH

John Howard and Peter Reith

It had to be dragged out of them, but officials from the Department of Finance today made some big admissions on the Reith Telecard affair under pressure from the Senate estimates committee.

Try as they might to dodge, waffle and prevaricate, the masters of cross-examination, Labor Senators John Faulkner and Robert Ray, shed a little bit more light on the great coverup.

The scandal broke in the Canberra Times on Tuesday October 10, nearly a year after Finance discovered the $50,000 fraud. The very next day, the Prime Minister announced that DPP Damian Bugg had decided to prosecute no-one over the fraud. He also said he had asked the Solicitor-General, David Bennett QC, to advise whether Reith was liable for the $50,000.

This reference to Bennett was made much of by Howard as proof of his good faith. Remember both he and Reith, when the story broke, said there was no obligation for Reith to pay.

Well guess what? Way back in May, Finance wrote to Reith saying it would issue him a debit notice for the full amount, based on legal advice that he WAS liable. That advice was given by a legal officer in the department. (Finance today refused to release that advice.)

Reith said no. Instead, he sent Finance a cheque for $950 a week later, which he claimed was the cost of calls made by his son Paul, to whom he unlawfully gave the card details to make private calls. On October nine, the day before the story broke, Finance again wrote to Reith demanding he pay up as legally required.

This means that both Reith and Howard defied the government’s then only legal advice when they claimed he was not liable. For example Reith said, “I don’t believe I can be held responsible for the payment of moneys which I had nothing to do with.” On what basis, Mr Reith? Did you take your own legal advice, by any chance?

On the basis of evidence to date from the Senate estimates committee, Howard sought the advice of the Solicitor-General’s in an effort to let Reith off. I asked the Attorney-General, Daryl Williams QC, if the Finance department’s legal advice had been included in the brief to the Solicitor-General (all the material Bennett relied on in coming to his conclusion was expunged from the legal opinion Williams released publicly.)

Williams’ spokeswoman replied: “Details of the material provided to the Solicitor-General for his consideration will not be made public for legal reasons.” What legal reasons, I asked. “The AFP is investigating.” But Bennett’s advice had nothing to do with criminal lability, I protested. The cover-up goes on, and on, and on.

It gets better. Finance was most unhappy with David Bennett’s advice exonerating Reith and son, which has also been criticised by several other lawyers.

So the department’s special committee on the Reith Telecard met and decided to get its own advice, from not one but three sources. It asked the Australian Government Solicitor, Phillips Fox and Blake Dawson Waldron to advise on liability. Department head Peter Boxall: “Following publication of the Solicitor-General’s opinion, the department was still in the position that it had moneys outstanding and we sought legal advice (on) the liability of Mr Reith… We thought that Mr Reith may have a personal liability.”

Why three advices? Department official Roger Fisher: “The issue was very, very sensitive and it was one where clearly there were views in the public domain and we thought it would be sensible to ensure we were not relying on a sole source of advice.”

It’s nice to know it wasn’t just the public who were incredulous that noone was liable for a $50,000 fraud on the taxpayer triggered by an unlawful disclosure of Telecard details by a minister.

We don’t yet know what these three advices said, or even if the department dumped them once Reith finally agreed to pay to save his political skin. Ray and Faulkner will resume questioning on the matter when the estimates committee resumes on Tuesday.

You’ll recall that Peter Reith said over and over again in radio interviews that when he met two Finance officials in April to discuss the Telecard bills he asked them, “If you’d got a bill for a million dollars, would you have paid it?” He said they replied “Yes, we would have paid it.”

“Well would you have told me? ”

“No we would not have,” Reith alleged they replied.

The two Finance men at the meeting, John Gavin and Daryl Wight, were at the witness table today. Ray asked them if Reith’s claim was true.

The special minister of State responsible for MPs entitlements, Senator Chris Ellison, gagged them. “The department doesn’t divulge discussions it has with members and Senators.”

Not surprisingly, Ray exploded. It was Reith who divulged, and if his account was true, it “would throw enormous discredit on the department.”

“So they can be verballed at will?” he asked Ellison.

Senator Ellison did not reply.

Have a good weekend. Reith won’t. Another round of Senate estimates questions next week and the week after a new AFP brief to the DPP on possible criminal charges means Reith is still not home free.

Read more from the archives about the Telecard Affair.

Comments


  1. Former Liberal Party deputy leader .Workchoices architect

    The Great Telecard Coverup – No Fibs http://t.co/LEZP3M4NAo via @NoFibs

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