In early June, Nino Napoli, a senior executive with the Victorian Department of Education and Training (DET), stepped into a witness box and began to answer some long overdue questions.
Until his recent sacking, Napoli had been a highly paid financial manager responsible for multi-billion-dollar state education budgets. He’d also been a member of an allegedly corrupt corps of DET managers, and was in Melbourne’s County Court to give evidence to Victoria’s Independent Broad-based Anti-corruption Commission (IBAC) about large sums of money allegedly stolen from schools’ funds over roughly two decades.
Napoli’s appearance drew a crowd. Dressed in a pinstripe suit, and with a conspicuous toupee of tousled ginger-tipped spikes, he cut an odd figure even in a building where strange wigs are common. Napoli’s evidence was stranger still. Drawn by the counsel assisting, Ian Hill QC, into increasingly profound exchanges, Napoli gave the impression that IBAC was tapping on the tip of an iceberg.
Hill: The scheme is open to … grave abuse […]
Napoli: Yes, Mr Hill, the potential is there, absolutely.
Hill: Yes, and you’re the living embodiment of [that potential] because you abused …
Napoli: Well, I’m an – I’m a …
Hill: Just a moment. You abused your position of trust.
Napoli: I – I – absolutely – and, with regret, what I’ve done was – was – dreadful. And all I’m saying, Mr Hill, is that just as I’ve been able to do that, which was not something of a – of a – of such a difficult scheme, it’s – it’s – it’s open to – to others. That’s all I’m saying.
Hill: Yes. What we would be interested in is your view as to how to stop people like yourself.
Napoli: I have – I have some – very good ideas about that, sir. We can talk about that at some stage.
Napoli had conducted his dealings in the DET until a whistleblower acted in early 2013. Shortly after IBAC investigators went in pursuit of the evidence, Napoli suffered a heart attack and took leave. But for department staff who were alleging Napoli and his colleagues bullied them into submission, or who had lost their jobs after not co-operating, the investigation was a relief. A former senior employee said to me, anonymously, that she and others had run to IBAC, to report what they knew.
After two years of IBAC investigations, 50 people gave evidence in hearings from April to June, with 39 of these preceding Napoli. By most accounts, he was manifestly unfit for public service – a number suggested he was a grossly incompetent financial manager; others, a pathological liar, an inveterate thief and a bully. A female accountant alleged Napoli was given to terrible rages in head office, in which he became highly aggressive and went “completely berserk”.
The commission also heard Napoli “brainwashed” his young adult children into perpetuating his deceptions; they’d received more than $100,000 from the DET for work they hadn’t done. His sons provided harrowing evidence at the hearings; one telling the hearing his father was “delusional”, and his professional life was “one big fucking lie”.
It seemed that, right up until this June morning, Napoli’s feints had been so outrageous that almost no one had the courage to mention them.
Victoria’s IBAC has had its own critics since its inception in 2011, for being more of a lapdog than a watchdog. Operation Ord (investigating “alleged serious corruption at the DET”), however, proved what IBAC could do. Empowered to install bugging devices in suspects’ homes and offices, take covert photography (mostly in suburban cafes) and send forensic accountants down byzantine money trails, Ord produced, at the very least, an abject spectacle of incompetent and criminally inclined senior public servants “at work”.
It exposed a fiefdom operating within the DET, allegedly creaming off significant sums of money from schools’ funding. It uncovered cultures of self-serving executive “leadership”, and found critical structural flaws in the DET’s funding arrangements and areas of governance. The machinations behind the complicit managers’ brazen mateship deals were aired for all to see.
And not before time, according to the teachers and principals watching proceedings. “Most of us were aware for years that the bureaucratic hub of the system was rotten,” a recently retired principal told me. “As long as you could keep them at bay you could do what you were paid to do: teach kids.” Another ex-principal, who muttered savagely throughout the hearings, vented to me during a break. “You have no idea how most staff struggle with inadequate funding for schools. Meanwhile, these jokers lined their own pockets? I have come in to eyeball these bastards.”
A primary-school teacher, attending IBAC around her classes, put it to me in language a prep child could understand. “Head office has been a boys’ club since Madame Butterfly was a caterpillar!” she said. “I’ve been buying my students basic items – think jumbo crayons and picture books – with my own money for years, because I was told the school’s budget didn’t allow for such things.”
With such an audience, IBAC Commissioner Stephen O’Bryan QC, a lanky man with Harpo Marx curls and a falcon’s gaze, might well have felt supported. O’Bryan warned one unhelpful witness that the commission had “truckloads” of evidence of “services, goods and the like not received by the school”. He was also obliged, repeatedly, to remind dissembling witnesses they were under oath, and that perjury attracted jail sentences.
At one point, O’Bryan pressed an otherwise lucid witness – a businesswoman implicated in the alleged laundering of DET money, attending the hearing in towering heels adorned with bows, and with diamond and pearl rings on her fingers – about her chronic memory lapses. “Have you got any medical condition?” O’Bryan parried from the bench. “No memory problems that you could enlighten me about?”
Counsel assisting – Ian Hill QC, Ted Woodward SC and Amber Harris – would establish, in often tense exchanges, that an operation had disguised a “round robin” of DET money being diverted into private holdings. Media reports – the front page of the Age newspaper, for one – alleged the combined misuse of DET money, under IBAC’s purview, was in the order of “hundreds of millions of dollars”.
The questions exchanged in the gallery weren’t so much about why it had occurred, but what would be done about it. One woman, who told me she had “crawled out of [her] teaching career, spent”, asked the pressing question: how far up the bureaucratic chain did the alleged corrupt conduct extend?
IBAC scrutinised activities between 2007 and 2014, when at least four DET mandarins – Nino Napoli (then director of school resources), Jeff Rosewarne (deputy secretary and acting secretary); Darrell Fraser (deputy secretary) and John Allman (regional director) – are alleged to have misappropriated funds.
Napoli had been responsible for school resource funding budgets since 1992 – most recently, $5.5 billion out of an $11 billion total – and enjoyed unfettered discretion over an annual branch budget of $1 million.
The commission heard there were two forms of theft allegedly operating within the department. One involved misusing credit cards and expense accounts. The other centred on a virtually undocumented, and formally discredited, method of administering school grants known as Program Co-ordinator Schools, or “banker schools”. Banker schools began in the ’90s during a push to decentralise management and hand budget control to individual principals. Some within the DET entrusted selected schools to hold funds in high-yield bank accounts to pay for earmarked programs. Banker-school monies, however, were rarely used for educational programs within the schools actually holding the money. This set-up, it was heard, was exploited by those under investigation as a way of hiding illegitimate expenditure, in some cases for years well beyond IBAC’s seven-year scope.
Napoli told the hearing that the banker-school system was designed for “schools getting together, collaborating and making things administratively simple”. In reality, it was what one witness described as a “phantom finance system”.
When Neil Loveless, an internal auditor who had heroically descended into a departmental rabbit hole to seek proof of the banker-school structure, gave evidence, he sounded like someone in need of a hyperbaric chamber. “Look,” he said, his face reddening with frustration, “the culture of the place is that … banker schools don’t exist … And there’s no policy, procedures or practices that define a banker school anywhere … I mean, you can’t do an audit of a system that doesn’t actually exist …”
IBAC alleged that Napoli, Rosewarne, Fraser and Allman each “had their [own] banker schools”, and that these schools’ principals and office staff were chosen because they would either do the executives’ bidding or turn a blind eye to the questionable use of funds.
Allegedly, the laudable simplicity of the system had, in Napoli’s case, allowed him to divert some $2.5 million of DET money, in just seven years, into his own accounts. Counsel assisting spent days, in dramatic explication, describing how that paper trail unfolded. Napoli, it was explained, would send tax invoices, marked as goods and services required by the DET, from his home computer to that of Carlo Squillacioti, his cousin. Squillacioti – along with Napoli and Carlo’s brother, Luigi – was a director of five companies purporting to be, variously, printers and stationers, an employment agency and a video production company. He would send the invoices, complete with phony company letterheads, tax invoice numbers and contact names, to the chosen banker schools, as directed by Napoli. (One such Napoli–Squillacioti company was named “Quill Proprietary Ltd, Printing and Stationary [sic]” – a business Ian Hill QC derided, in an aside, as the “printing company that never moved”.)
When banker-school principals or office managers received the sham invoices, they were then instructed by Napoli to pay them out of DET grant money parked at their schools – which had been allocated to them by Napoli.
Again, Loveless gave compelling testimony about what his audits had dragged into the light. “The thing that amazed me about the whole thing was that there was money flowing all over the place … and it was just on the flimsiest of documentation. Sometimes they – a program area or a [deputy secretary] – would fill out a general expenses claim form, which is the sort of stuff that you would, you know, pay your tea money on, and they would move $250,000 from one area to another, and there was no justification for it, there was no explanation of it … I was just gobsmacked by how simple it was for large sums of monies to move from program areas to regions and from regions to schools.”
The apparently gross waste and mismanagement of DET funds also extended to international travel. It was “just chaos”, he said.
“We live in an age where you’ve got Skype and you’ve got Google and you’ve got heaps of resources that you can actually look at to work out how the Finland education system is actually working. But the first thing a lot of our principals want to do is jump on a plane and go to Helsinki! So these are the sorts of things that probably need to be explored – or get somebody out from Helsinki and find out what was going on. But you don’t want to have 500 principals going [to] Helsinki to find out what’s going on.”
Commissioner O’Bryan interrupted Loveless to confirm a point.
O’Bryan: So, are you saying that you came across one instance of a lump sum being paid out from, what, central office under the guise of tea money, literally?
Loveless: No. It was put into an account at a school called tea money.
O’Bryan: Put into the tea money account at the school?
Loveless: Yes, yes.
O’Bryan: Roughly how much are we talking about?
Loveless: $3 million.
IBAC found that the banker-school system was mostly overlooked, until a giant hole appeared in the DET ledger in Napoli’s area. A hole that Jenny Zahara – a whistleblower accountant – called “a bit of a deficit issue”, which had been detected in a “bucket” that needed plugging after “about 80 or 90 million dollars” had dropped out of the bottom of it.
Rewards for principals and office managers who did the executives’ bidding came mostly in the form of nepotism and favouritism. Some principals were promoted into management positions, mostly in head office, without transparent process; they, and staff, were often granted overseas “information gathering” trips. Mary Hannett, an office manager at Chandler Park Primary School, who’d signed off on Napoli’s invoices totalling more than $150,000, scored seven overseas trips in one year, and received $10,500 in bonuses over four months.
But IBAC’s investigations hit a wall, it seemed, trying to locate where the DET money went once it landed in Napoli’s family trust fund.
In both Luigi and Carlo Squillacioti’s examinations, Ian Hill QC struggled to pull together a full picture of the Napoli–Squillacioti assets and investment properties. Even when Commissioner O’Bryan issued a dire warning to Carlo Squillacioti – that “there are very serious penalties for perjury … that’s lying under oath. Up to ten years’ imprisonment. Now, let’s have an answer” – little was illuminated.
The Squillacioti brothers gave three days’ evidence. Carlo, the more outwardly serene of the brothers, stared imperiously down his nose at Hill. His affectlessness – marble-clad expression, shoulder shrugs – suggested he didn’t consider the allegations as something to get worked up about.
Luigi, whose fingertips were black from fixing cars, was more forthcoming. Although he, too, gave the impression – dwarfed, as he was, in an enormous coat that he kept on at all times – of a person insulated from the gravity of the situation.
IBAC had bugged Cobra Motors, Luigi’s car workshop, for covert recordings. Panicked and expletive-laden exchanges from the workshop’s rear office were played during the hearing. The men could be heard scheming about how to hide the spreadsheets and hard drives involving DET money they’d allegedly stolen, mostly through banker schools. In one exchange, they argued bitterly about hiding places. Napoli had scrambled into his mother’s attic to hide his DET archive there. Luigi chastised him for this stupidity.
Commissioner O’Bryan [grilling Luigi Squillacioti about the recording played to the commission]: I thought I picked up the word “underground” when you were speaking towards the end there. Were you speaking about somewhere to hide [the DET spreadsheets] underground?
Luigi Squillacioti [shrugging]: Underground. I might have mentioned that. I can’t recall.
O’Bryan: Yes. What did you have in mind? Where was the underground location?
Luigi Squillacioti: Bury it […]
Ian Hill QC: Well, what precisely were you suggesting then?
Luigi Squillacioti: That … if [Napoli] wanted to hide something, he should do something better than his mother’s place!
After another audio clip, Hill questioned Carlo Squillacioti on its contents.
Hill: And your brother [Luigi], when he said, “I’ll be fucked to Jesus Christ,” was indicating his concern about … the file that [IBAC investigators] had got out of [the] office … he didn’t sound very happy there, did he?
Carlo Squillacioti: No.
Hill: And your brother says, “I’ve got a feeling, as much as I hate to think it, I reckon Nino’s going to do time, and I reckon there’s a good chance Carlo’s going to … fucking go in. Yeah. And I’m fucking – I could go as well.” What did you say to your brother Luigi … to give him the impression that there was a chance you could go to jail? […]
Carlo Squillacioti: False payments. False payments. False invoices.
Jeff Rosewarne, former deputy secretary and acting secretary, is mentioned by the brothers in these recordings as someone who needs to be urgently telephoned and spoken to.
Hill, attempting to get to the bottom of the banker-school rorts, would also question Napoli. In one exchange, Napoli gave the room a farcical brushstroke tutorial in how an executive who controls vast sums of public money in a large government bureaucracy might work.
Hill: Are there any other avenues that you think the investigators should be looking at in respect to corruption within the [DET]?
Napoli [in helpful, consultative mode]: Goodness … I don’t know that I could do justice in going through, you know, the complete detail of it all, because it would take … [shaking his head, indicating how long it would take to explain his and his colleagues’ behaviour] … but just to give you the broad sense, I think the concept of the co-ordinator school, banker schools, needs a pretty good review. I think the guidelines and the way that those things are operated, and the volume of money that goes through them, needs some – a thorough look at.
Hill also questioned Napoli about end-of-year surpluses and the allocation of bonuses.
Hill: If there was a surplus held by those within the department at the end of the financial year, how was that dealt with? Let’s take, for example, one of the executives, Mr Fraser.
Napoli: OK. I would approach Mr Fraser with perhaps maybe a week in the financial year to go … I would say, “Mr Fraser – Darrell I would call him – look, it looks like there’ll be a couple of million, two and a half, three, four, five million, what do you want me to do?” [And] he would provide me with a list of grants to various schools to be made. And there would be very little description, because it wasn’t my place to – I’m not an educationalist, so – I would simply make those grants to schools. And off they would …
Hill: Would any of the executives reward themselves in any way?
Napoli: Would – sorry?
Hill: Reward themselves in any way? Let’s take overseas travel, for example.
Napoli: Like, how would you know? Because you could park the money – you could park the money into a [banker] school and then take the travel seven months later.
Hill, illustrating the point, tendered to the commission two unforgettable photos of Rosewarne and Napoli “taking it easy” on a DET-funded holiday to the UK and Italy. (Their wives went with them for part of the trip, too; airfares, accommodation and expenses paid, via false invoices, to the tune of $15,000.) One photo shows Rosewarne and Napoli grinning in front of Buckingham Palace. The second shows them lying together – school camp–like – on a double bed in a well-appointed hotel room. Napoli, looking at the photos on the courtroom’s screens, was suddenly mortified. “Jesus!” he exclaimed. “I’m a lot fatter there, aren’t I?”
IBAC investigations showed where at least some school funding ended up. An incomplete list includes: a curated wine cellar stored in Jeff Rosewarne’s garage; two coffee machines (total worth $5000), also for Rosewarne; overseas holidays with wives, associates and staff; overseas “study tours” that produced neither reports nor documented expenditure; a party at The Apartment nightclub for Rosewarne’s 50th, invoiced as “professional development” for $6000; and a “planning retreat” at a Yarra Valley resort, where Darrell Fraser – according to three witnesses – drank so much he had to be assisted out of the venue, and was so hungover he was incapable of delivering the presentation executives had apparently travelled to hear.
Of the many emails tendered and displayed on screens, just a handful were needed to illuminate the executives’ “mates at play” credo. A lunch invitation, emailed from a “Maddo” – a supposedly independent consultant associated with a turf company, then tearing up school ovals to pave them with synthetic grass – to “The Italian Stallion” (Nino Napoli) and “The Bushfire Legend” (Jeff Rosewarne) read:
“Boys! I’m confirming lunch at the Waiters on Friday … to hear about Nino and Jeff’s important overseas work for the government and to help Mick spend some of his exorbitant consultancy fees.”
The “boys”, Maddo told the commission, met for such lunches every three weeks, at the very least.
But these were just the more picaresque forms of malfeasance in the department. As a DET official told me, while sharing a descending elevator in the County Court, there was “far worse to come”.
In week three of the hearings, three senior DET staff members gave evidence that they’d been harassed, humiliated and alienated for raising concerns about suspect behaviour. All three reported being exiled either to an office “gulag” or “naughty corner”. One had been “punished” by having her budget slashed from $160 million to $5 million, and her staff numbers reduced from 50 to nine. Another had taken leave because of anxiety and ill health. All three had eventually done what some colleagues hoped for, and left the department altogether.
Gail Hart, one of these witnesses, had been a DET general manager responsible for business transactions, and a chair of the Accredited Purchasing Unit (APU) for nine years, until 2010. She reported to the DET deputy secretary Jeff Rosewarne.
Hart, a petite woman whose hands trembled throughout her testimony, told the commission that any exemptions to the department’s regulation tender process – purchases above $100,000 and below $1 million were to be put out to public tender – required her authorisation. Hart explained she had “come under pressure” from Rosewarne because “executives were complaining that I was too strict, that I wasn’t letting things through that should go through, that I was being pedantic”. When she and the APU rejected one particular requested exemption because it wasn’t competitive, “Jeff called me in [and] said, ‘You need to work this out. You need to get it over the line.’” One executive told her, “Look, I don’t understand what the issue is. This is the company I want so just – why can’t I have it?” Hart clenched her jaw. “I was just furious that that was his attitude,” she said. “That someone as senior as him would think, you know, ‘This is who I want. Why should I go out to tender and waste time and money?’”
Hart told the commission she was asked by then department secretary Grant Hehir to scrutinise Darrell Fraser’s personal expense claims, which Hehir felt to be suspect, most of which were “lunches or dinners in restaurants”. “The restaurants were expensive,” she added, and “a lot of alcohol was on the bills.” She recalled Fraser had taken the then minister, Lynne Kosky, and her husband and two children to lunch. Hart held her breath, then proceeded. “It’s not appropriate for a public servant to take the minister and her family to lunch or dinner,” she said, quietly.
Hehir then instructed Hart to “meet with Mr Fraser and ask him to repay some of the monies relating to various expenses … I don’t know why he asked me,” Hart said, tremulously. Fraser was senior to Hart; Hehir was senior to Fraser. “I mean, I – I must admit,” Hart quavered, “I was a little bit shocked to be asked to do that.”
Fraser “wasn’t very happy”, Hart stressed, but then he merely took a detour around her and hid his expenditure by charging things to a credit card he gave to a relatively junior public servant named Steve Sullivan. Asked who approved Sullivan’s personal expenses, Hart replied, “Mr Fraser.”
At about this time, Fraser and Rosewarne stopped submitting receipts for expenses, Hart reported. Instead they submitted statutory declarations declaring their receipts lost. “Not only were [stat decs] used for lunches and dinners in Australia,” Hart told the commission, “they were also used when Mr Fraser and Mr Rosewarne travelled overseas.” When she confronted Rosewarne on the matter, he “just shrugged his shoulders”.
Hart’s testimony went on so long she was asked if she needed a break. She shook her head and ploughed on. She said Fraser and Rosewarne pushed her to “work around” processes that weren’t transparent, particularly in relation to implementing the Ultranet IT system. (It cost $180 million before being abandoned, and will be the subject of further IBAC investigations.) Hart gave a relatively small, but telling, example of the behaviour common during Ultranet’s implementation. Five DET staff went to the UK during that period, with Rosewarne insisting they fly business class. Hart refused the demand, knowing that only the premier could approve such an upgrade. Rosewarne sent a message to her that “he was the ‘dep sec’ and he could do what he liked”. The staff flew business class.
Hart said Rosewarne frequently raised his voice at her. “I used to just, I suppose, grin and bear it,” she told the hearing. “I did start looking for other jobs in other departments.” Which was just as well – a messenger advised her that Rosewarne had restructured her position out of existence.
On Day 12, an imposing man with a face furrowed with frown lines strode into the courtroom, took an oath and galvanised the hearing with his evidence. Dr Stephen Brown, whose nervous wife watched from the gallery, was doubly striking, coming as he did after a week-long parade of school principals in the witness box, all of whom, bar one, had been slouch-shouldered, jargon-spouting automatons who had facilitated allegedly corrupt transactions by merely doing what they were told.
In this company, Brown seemed a towering figure of integrity. A highly qualified ex-teacher, he had left the position of Queensland’s executive director of schools in 2005, to move to Victoria where he eventually became the state’s executive director for literacy and numeracy, and was a possible future contender for DET secretary.
Brown gave evidence on what he termed a “completely unethical practice by a number of people in the leadership team in the department at the time”.
Brown conducted a 2010 audit into the banker-school system, and urged that it be abolished – a recommendation strenuously rejected by the DET’s most senior management. Brown found there was no “central, system-wide, transparent list of banker schools”. The audit was unable to get even a sense of how banker schools were appointed. The 2010 recommendations went as far as the then acting DET secretary Jeff Rosewarne’s desk, and no further.
Brown told the commission that a “caucus” – including Darrell Fraser and John Allman – routinely met prior to fortnightly departmental meetings to ram through their agendas. Fraser, sensing a rival, pursued Brown with outbursts of “obvious anger and displeasure”. Brown told of his amazement at the “very brazen and arrogant” sense of entitlement, not to mention a “significant embedded culture of drinking, and lunching”, among the executives in head office. Brown brokered a meeting with Professor Peter Dawkins, then head of the department, to raise these matters, and twice emailed Helen Silver, then head of the Department of Premier and Cabinet, about this “boozy, blokey culture”. His emails went unanswered.
Most staff within the department, Brown asserted, wouldn’t speak their mind about what was going on “because of retribution or fear”. It was “pretty well known,” Brown said, “that Mr Fraser was a heavy drinker … On quite a number of occasions, public occasions for the department, there was quite clear evidence that [Fraser] was fairly inebriated.” Brown told the hearing that Allman was Fraser’s “emissary”; Allman would tell Brown how he “did things for ‘the dazzler’, and how [Fraser] was at the moment, what mood he was in, what state he was in”. Allman was a “go-between”, Brown said, “a trader of information”.
Brown approached James Kelly, the DET’s head of audit, about banker schools, and the executives involved. Kelly assured Brown they would be scrutinised, but very little was done. Brown and Gail Hart had both been placed, by this stage, in a “temporary office position away from the main area, almost like a gulag”, Brown said. “And so it just so happened we started talking about what [we’d] seen … she was just distraught, like I was, about what … we were seeing.”
Brown eventually approached Fraser, to tell him he “needed, for my own family and my own health … to get out”. Brown had resolved to return to Queensland, but “adopted a mature approach” and arranged to meet with Fraser to “resolve this, so we can move on, even though we perhaps don’t like each other”.
Gripping the courtroom’s witness box so hard his knuckles whitened, Brown continued. “So, the meeting took place across at the hotel opposite St Andrews Place, in a room,” he said, pausing briefly, gulping air. “I walked into the room with much trepidation, and he [Fraser] was sitting there with a bottle of wine and some cheese and whatever. And he launched out of the chair at me, and tried to grab me by my throat, and so I grabbed his hand, and pushed him away, and said, ‘Don’t ever do that again.’”
“You are not a small man,” Ian Hill QC commented, tangentially.
Later in his account, Brown said he thought it all came down to the values of individuals. He impatiently ticked some basics off: an education system needed strong secretary leadership, good governance practices, a high degree of transparency and accountability, checks and balances. “We need to make sure that we have the best leadership to ensure that the children of this state get the best opportunities and resources. I think there needs to be a really clear review. Educators hold a special place in society,” he continued, staring ahead sternly. “They hold the hopes and dreams of so many parents, so many people. And if we lose – if the leaders lose their moral compass, what chance do those children have, if we lose our moral compass?”
The courtroom fell silent, stunned by such passionately held sentiments. As Brown left the box, and O’Bryan adjourned proceedings, those present got to their feet and looked around, dazed and possibly chastened.
In the final week of hearings, the mood in the gallery had hardened to barely disguised disgust; everyone in the courtroom, most particularly the IBAC team, seemed fatigued. But when Jeff Rosewarne entered the witness box for his second IBAC appearance, people’s concentration sharpened once more.
A grim-looking man with close-clipped silver hair and a pale-wool suit, Rosewarne sat at an oblique angle to the gallery; only very occasionally did he deign to lock eyes with his interlocutor, the serenely lethal Ian Hill QC.
Rosewarne had been recalled to reflect on the testimony of Napoli and the Squillacioti brothers. Despite the clear paper trail exposed by IBAC, and the testimony of Napoli – that Rosewarne had not only known about Napoli’s schemes, but had been involved in false and inflated invoicing for his own gratification – Rosewarne did not crumble, would not freely acknowledge his alleged wrongdoings.
Napoli had made a confession to IBAC. His testimony was heavily sprinkled with the words “yes, sir”. Rosewarne, in stark contrast, remained steadfast; his only moment of humility was to thank the tipstaff for filling his water cup.
What IBAC didn’t learn about Rosewarne from the man himself, it learnt from the witness who followed him.
The DET head of audit James Kelly was a younger executive who reported directly to Rosewarne. He told the hearing how he’d come to believe that Rosewarne – sitting at the very top of the pyramid – was corrupt.
Summoned to Rosewarne’s office in early 2011, Kelly believed he was finally, after many months of inaction, getting the secretary’s sign-off on the critical audit findings about the department being “ripe” for corruption and fraud.
Instead, what occurred in that meeting made Kelly feel “the blood drain from my face”.
Rosewarne wanted reassurance that the “Mildura events” – a notorious incident in the history of the department, Kelly told the hearing, “a meal for a lot of executives at Stefano’s which … involved the sexual harassment of one of the staff members” – were “historical events that should be left alone … shouldn’t be dragged back up again”.
Then Rosewarne cut to the chase. “Are you investigating me?” he demanded of Kelly. At that stage Kelly wasn’t, but the very question “flattened” and “shattered” the younger man.
Directly after the meeting, Kelly “went for a walk through Treasury Gardens”. He needed air. He needed to get his thoughts in order. He told the commission, “Frankly, I was in trouble.”
Did he emerge from the gardens with a plan? Did he go around the “roadblock” at the top, counsel assisting Ted Woodward SC asked, and report what he now knew to the auditor-general?
“In hindsight, should I have gone to the auditor-general?” Kelly said, mouthing the question like a challenged child. “Yes,” he told the commission. He should have. But he didn’t.
This is a slightly revised version of the article that appears in the August 2015 print edition of the Monthly.
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