This week, we learned that $443 million of taxpayer funds were gifted to a charitable foundation heavily supported by the fossil fuel industry without proper due diligence. As political editor Dr Martin Hirst writes, it might not save the Great Barrier Reef, but it might just sink Malcolm (Captain Bligh) Turnbull.
MALCOLM TURNBULL has been MIA for most of the past week, but he emerged on Friday to defend his “captain’s call” decision to grant a business lobby group over $440 million in funds without, it seems, any due diligence at all.
The Prime Minister claims the funding process was above board and transparent, but this has not satisfied anyone outside of the Liberal Party.
Independent MP Andrew Wilkie told IA that the whole deal is “at best, a collapse in proper process” and has “a dodgy stench about it”.
The May Budget revealed the grant, $443 million plus change, to the Great Barrier Reef Foundation, which until it was thrust into the media spotlight with this huge cash injection, had flown under the radar for most people.
To say that it took established environmental groups and most of us by surprise is an understatement. According to Andrew Wilkie, the GBRF is “an obscure organisation” that was gifted nearly half a billion dollars (more when the interest it will earn the Foundation is calculated) “without any tender process.”
It seems that even the GBRF’s own executive was a little taken aback by the Government’s generosity.
The Foundation’s chief executive, Anna Marsden, expressed her surprise and told a Fairfax journalist that it felt like winning the Lotto:
"We didn’t have much time before the announcement to be prepared for it. It’s like we’ve just won lotto — we’re getting calls from a lot of friends."
Well, yes, except the Great Barrier Reef Foundation didn’t actually buy a ticket in that particular lottery. It turns out, we learned this past week, that the Foundation had not even asked for the money — it was handed over on a whim by Prime Minister Malcolm Turnbull.
Let’s see:— Kristina Keneally (@KKeneally) August 3, 2018
Private meeting on 9 April
Board members from Goldman Sachs
No grant application
No due diligence
All wrapped up in 20 days
No finalised agreement
And all $444m went out the door by 30 June to undisclosed banks
Transparency Turnbull style https://t.co/kShBersSSI
The details are well established now.
In early April, there was a private meeting in Sydney between Turnbull, Environment Minister Josh Frydenberg and the chair of the GBRF. The Foundation did not ask for the money and did not have the capacity to manage such a large injection of funds.
Indeed, the Foundation had six staff on its books and, in 2017, a turnover of just $8 million. This hardly put it in the position to become the lead organisation charged with coordinating efforts to save the Barrier Reef, from coral bleaching, eroding water quality and the effects of climate change.
That’s okay, then, because it has now emerged that climate change is not even mentioned in the publicly available documentation outlining the terms and conditions of this extraordinary gift.
The Prime Minister’s ‘private meeting’ with the Great Barrier Reef Foundation, when he offered them $444m of public funding, was more private than first thought. It now turns out that there were no public servants present. Just Turnbull, Frydenberg & GBRF Chair Dr John Schubert. pic.twitter.com/LfDVVsvglx— Kristina Keneally (@KKeneally) August 1, 2018
And there’s no mention at all of the damage being caused to the Reef by fossil fuel consumption, or anything at all about proposals for more coal-laden bulk carriers to traverse fragile areas of the reef transporting brown coal to China and Japan.
This is surprising because scientists and environmental groups have identified the shipment of coal through the Reef as perhaps the most important threat to its ecosystem.
Another little snippet that adds further intrigue to this already curious tale is that the organisation that made the May 2016 claim that transporting coal is detrimental to reef health was the ARC Centre of Excellence in Coral Reef Studies at James Cook University.
This might leave you wondering why the Centre was not the recipient of the $443 million handout; or why other groups were overlooked.
Well, if there had been a competitive tendering process – the usual way such grant funds are distributed – maybe other groups with a good track record of work on reef recovery might have been given a share of the funds?
But, as we now know, there was no tendering process. The whole deal was concocted, cooked up, conceived and consummated with unseemly haste and in secret, away from public scrutiny.
Environment and Energy Minister Josh Frydenberg tried to clean up the spillage late in the week in a series of media appearances and, finally, Turnbull himself fronted the media and gave a grim press conference that repeated the assertion the deal was above the waterline, but he gave no relevant details.
.@TurnbullMalcolm: The Great Barrier Reef foundation is an outstanding organisation. The allocation of the grant was completely transparent.— Sky News Australia (@SkyNewsAust) August 3, 2018
MORE: https://t.co/kganacdTHH #newsday #auspol pic.twitter.com/irtsAKSI2R
Instead, what we got was the release of a boilerplate Grant Agreement that looks like someone’s unfinished homework. I’m going out on a limb here, but it looks to me like somebody in Turnbull’s office or the Department of Environment and Energy, did a quick “find and replace” editing job to put this together.
The released version is unsigned and sections of it are not completed, it is a standard template that someone forgot to clean up before putting it on the DEE website.
Parts of the federal government's grant agreement with the Great Barrier Reef Foundation are incomplete. pic.twitter.com/iveEO5tndZ— Henry Belot (@Henry_Belot) August 3, 2018
It is an extraordinary document and, given we know the GBRF did not apply for the funding, it is very light on details.
Applying for grants – particularly government funded grants – is a time-consuming, arduous and mentally-challenging task. Normally, all the details – such as a business plan, how you intend to spend the money, checks and balances, partners and governance arrangements – are worked out and presented in the application document.
Then, applications are assessed on merit and weighted according to how well the project is thought through and how robust the business case is in relation to partners, governance and so on.
However, none of this work has yet been done. The project agreement basically pays the Foundation to do all of this preparatory work with the grant money.
Not only that, but the initial funding, which runs for six years – the intended life of the project – has been handed out in one lump sum and it’s now sitting in Foundation bank accounts earning a tidy sum in interest. It has been calculated at around $40,000 per day.
September 30 deadline for the Great Barrier Reef Foundation's fundraising strategy. pic.twitter.com/8sMUib9YyH— Henry Belot (@Henry_Belot) August 3, 2018
So now, the Foundation has control of $443 million of taxpayer funds and no clear idea of how it is going to be spent, who will be spending it, or doing the work it is supposed to pay for, or how it is to be accounted for.
This is gobsmackingly out of the ordinary and reeks of insider dealing, corruption and of Turnbull squandering over $400 million after a quiet snifter of brandy and a good cigar with one of his business classmates.
Turnbull and co are now in damage control mode and, I have no doubt, panicking like mad to retrospectively clean up this glitter-rolled turd.
The story got a major boost in this past week thanks to a Senate Committee hearing chaired by Greens Senator Peter Whish-Wilson.
Statement as Chair of Great Barrier Reef 2050 Partnership Program Inquiry: The Senate committee has now been liaising with the Great Barrier Reef Foundation for the last six weeks seeking to have a number of witnesses to appear. 1/3— Peter Whish-Wilson (@SenatorSurfer) August 3, 2018
None of the principal directors of the GBRF would attend the hearings and they all gave piss-weak excuses that would get them a hefty detention in most state high schools.
We have asked the GBR Foundation to respond to the Committee by next Wednesday with the earliest possible dates these witnesses can appear. It’s been disappointing that we haven’t been able to get a date sooner considering the intense public interest. 3/3— Peter Whish-Wilson (@SenatorSurfer) August 3, 2018
This is an extraordinarily cavalier attitude by these experienced captains of industry and verging on contempt of the Senate.
It looks and smells like a cover-up is underway and being hastily cobbled together behind closed doors.
Both Turnbull and the Foundation’s directors have reason to be concerned. My reading of the Department of Finance rules for the awarding and administration of grants like this indicates that the guidelines may well have been breached in this case.
The rules are not discretionary. They are mandated and compulsory according to the guidelines document. There are several areas where it can be contended the mandatory rules have not been complied with. There are perhaps too many putative breaches to list them all here, I’d encourage you all to take a look.
Here are one or two that I have highlighted.
As we know from the Senate hearings, no officials in the Department of Energy and Environment were present when Turnbull gifted the money; this too seems like a potential breach which mandates that government officers must do due diligence prior to funds being allocated.
And here is where it gets tricky for Turnbull and Frydenberg.
Finally – and I’m sure there’s more – the guidelines specify that competitive merit-based selection is the best practice model for administration of grants.
This clearly did not happen in this case, so, as you can see, there’s a lot of paperwork to do before this can be made to look even remotely kosher.
No doubt this story has a way to run yet. As Peter Whish-Wilson and Kristina Keneally have made clear there will be more Senate Committee hearings into the grant process.
The #ReefGate scandal is also reigniting calls for a federal anti-corruption body.
As Andrew Wilkie told IA:
“Frankly the whole thing has a stench about it, which reminds us of the pressing need for a Federal anti-corruption body that could look into misconduct, or at least instances of mysterious behaviour.”
This is certainly “mysterious” if not downright corrupt and the GBRF is also under the gun here. It has until the end of August to come up with a plan that satisfies the requirements of the grant. The added public scrutiny and attention now focused on the Foundation means that any plans it puts forward will have to be watertight.
Maybe the Foundation should cut its losses and say “thanks, but no thanks,” to Turnbull and Frydenberg. It has been put in harm’s way by all the questions now being asked.
I haven’t even bothered with all the side issues, such as the Foundation’s deep links to the fossil fuel industry, or its obvious lack of expertise to handle a grant of this size, but they too are a thorn in the side of GBRF executives and board members as they try to manage this flaming political football.
It represents a new low for Turnbull too. Perhaps it’s his Captain Bligh moment. The push too far that sees the crew mutiny and set the captain adrift in a rowboat.
Who will be Turnbull’s Mr Christian (Porter?).
⚡️ “Barrier Reef Scandal” Is Malcolm Turnbull about to have his Captain Bligh moment as his derelict and corrupt good ship RorterRooter sails blighthly towards the reef of neglect and disinterest?https://t.co/On18mlp8Id— Doc Martin (@ethicalmartini) August 3, 2018
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
You’ll Never Guess who the Chair of the Great Barrier Reef Foundation is…— lynlinking (@lynlinking) August 3, 2018
this shady organisation is actually being run by oil company bosses — including the former Chief Executive of Exxon’s Esso Australia John Schubert. excerpt https://t.co/SOJmLU6hLk
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