Serious questions have been raised over how an NT Government investigation ordered by Chief Minister Michael Gunner into the $12 million Darwin Turf Club grandstand scandal did not turn up any instances of suspicious conduct or raise any alarm bells, given the material reported in the NT Independent’s recent special investigation series.
Mr Gunner repeatedly rejected calls to send the matter to the Auditor General in September 2019, after it was revealed the Turf Club awarded $12 million of taxpayer money to chairman Brett Dixon’s construction company to build the grandstand.
Instead of referring it to Auditor General Julie Crisp, Mr Gunner instructed Department of Business chief executive Shaun Drabsch to investigate whether the tender process was above board.
However, the Department of Business had an employee on the Turf Club’s selection panel that ultimately saw Jaytex chosen as the winning bidder, over Halikos and Sunbuild. It is unclear why the Chief Minister would then seek another Department of Business employee to investigate.
During a Public Accounts Committee hearing in October 2019, Mr Drabsch refused to identify the government employee who had been put on the panel, for reasons never explained.
But the NT Independent revealed earlier this month that it was Jason Finlay, who is listed as a “project director” with the NT Government.
Of the five members on the panel, Mr Finlay is the only member to have tied both Jaytex and Sunbuild as the preferred builder. He and Mr Drabsch refused to answer questions over how that score was arrived at.
It’s also unclear how the conflict of interest of Mr Drabsch investigating a matter that involved one of his senior employees was managed.
According to Mr Drabsch’s report, he spoke with Mr Finlay while undertaking his investigation into the matter, which also included speaking to the Turf Club’s probity advisor and reviewing the minutes of one board meeting in August 2019 – the meeting at which the board approved Jaytex for the contract.
Mr Drabsch concluded that nothing untoward had happened and that he was “satisfied that due process has been followed”.
In his report, which was given to the Chief Minister, Mr Drabsch said that he had spoken to the probity advisor Nathan Reichstein who “confirmed that the chair of the DTC was not involved at any point in the process and the panel was fully aware of the conflict of interest risks”.
However, Mr Drabsch did not disclose in his report the discussions that were held by the Turf Club board in the August 2019 meeting, which the NT Independent previously reported showed the board was afraid of reputational harm, with board member Anya Lorimer suggesting the matter would be sent to the anti-corruption commission and did not “pass the pub test”, but that she supported giving the contract to Jaytex anyway.
The board also discussed hiring a communications firm for “crisis communication advice”.
Other concerns were raised by board members about the process, however the board unanimously supported awarding the contract to Jaytex.
Jaytex’s bank had a representative who voted for Jaytex to win the contract – not mentioned in NTG report
It was also revealed in the August 2019 minutes that Suzi Hullick from Westpac had been a panellist but it was not disclosed in those minutes that Westpac was Jaytex’s bank.
It remains unclear why Mr Drabsch did not raise it as a concern in his report.
Mr Reichstein, who appeared to be doing the probity work in exchange for racing tickets and other contra material, stated in his probity report that the panel was made up of two Turf Club board members and three “independent members”, which presumably included Ms Hullick, Mr Finlay and lawyer Rose Watts, whose firm had done legal work for the Turf Club.
But he did not state in his report that Ms Hullick declared her perceived conflict of interest. Her vote for Jaytex gave the panel a majority which they went with, despite Mr Finlay’s tied scores and Ms Watts’ vote for Sunbuild.
Mr Drabsch relied on Mr Rechstein’s assessment that the process had been “independent and fair to all tenderers” and his word that Mr Dixon had not been involved in the process.
However, if Mr Drabsch had looked at the board meeting minutes from one month earlier, in July 2019, he would have discovered that Mr Dixon was in fact involved in discussions with the board around the project while it was at the open tender stage.
Those minutes appear to contradict Mr Dixon’s prior public statements that he was not involved in the process.
The July minutes show at one point Mr Dixon requested an update of the project plan that was to be provided to the club by prospective tenderers, reiterated tight deadlines to get the project finished and moved a motion to pay the club’s project manager who was also on the selection panel for the work he had done to date.
Mr Dixon was also present during the July board meeting when the board was presented with a report by then-chief financial officer Barry Lloyd into the “scope and tender for the new grandstand”.
He also strangely asked at that meeting if Mr Drabsch had been involved to that point.
Mr Dixon was also present when the selection panel was announced and provided comment on its appearance of objectivity.
Government continues to refuse to comment on its handling of grandstand scandal
Mr Drabsch did not respond to the NT Independent’s questions, including whether he should resign for failing to adequately investigate the handling of $12 million of public money.
Mr Dixon has refused to answer all questions about the grandstand matter, including whether he exercised his duties on the board in accordance with the Associations Act NT.
Mr Gunner also refused to answer the NT Independent’s questions yesterday, including why Territorians should have any faith in his government to responsibly look after the public’s money and why he did not refer the matter to the Auditor General for an unbiased investigation in 2019 when independent MLAs called for it.
Mr Gunner was forced to refer the matter to the Office of the Independent Commissioner Against Corruption in February 2020 after the ABC revealed that Mr Gunner’s chief of staff Alf Leonardi had drafted letters for Mr Dixon to lobby Ministers to obtain the $12 million grant, which he had done without the knowledge of the Turf Club board.
It is understood an ICAC report into the matter will be released imminently.