An anti-corruption investigation has found the staff in the Daniel Andrews’ government exerted pressure on health department officials to award a $1.2 million contract to a health union.
The Independent Broad-based Anti-corruption Commission released its Operation Daintree report on Wednesday, after investigating the awarding of the contract in the lead-up to the 2018 election.
The investigation substantiated that a ministerial advisor working in the then-health minister Jill Hennessy’s office exerted pressure on Department of Health and Human Services staff to award the contract to a Health Workers Union entity.
It also found that an advisor in the office of a subsequent health minister, Jenny Mikakos, and an advisor in the office of Premier Daniel Andrews intruded into the department’s management of the contract against the public interest.
While there was no corrupt conduct detected, the investigation did reveal “concerning conduct and omissions in breach of the public duties and ethical obligations of ministers and ministerial advisors”.
Conduct by senior public servants also fell short of that required by Victorian standards, the inquiry found.
“The pursuit by advisors of the perceived interests of their ministers, including the premier, at the expense of proper process and standards is another example of the phenomenon of grey corruption that is of increasing concern to integrity bodies around Australia,” the report said.
The operation found ample evidence of the misuse of power and influence by ministerial advisors and departmental executives.
Health department staff held significant concerns from the start about whether the union entity, the Health Education Fund, had the capacity to deliver on the contract.
Despite that, a non-competitive process went ahead, and the concerns persisted, with Andrews’s government staffers ultimately dissuading the health department from terminating the contract.
Safeguards designed to ensure the procurement process’ integrity and fairness were bypassed, and, as a result, the government’s conflict of interest was improperly managed, the inquiry found.
Mikakos gave evidence to the inquiry that all ministers and their advisors were under the clear direction of the premier that election commitments must be delivered.
She described the government as “very centralised”, with the premier’s private office “having its tentacles everywhere”.
IBAC found Mikakos, as minister for health, was accountable for the way her office undermined the proper functioning of her department - sometimes, at the behest of the premier’s private office.
She sought to defend her adviser and saw it as the health department’s responsibility to raise concerns about the contract directly with her.
That view was difficult to reconcile with her evidence that her staff would be cautious about what they raised with her given the time pressures she was under, compounded by the COVID-19 pandemic, the inquiry found.
