State Services Commissioner denies conflict of interest in fraud case

State Services Commissioner Peter Hughes has denied he had a conflict of interest when he chose not to investigate a complaint that public servants had been harmed by the fraudster Joanne Harrison.

Source: 1 NEWS

However, former Labour MP Sue Moroney said Mr Hughes was clearly compromised and lacked sound judgement. 

In 2017, Mr Hughes initially declined to investigate claims by Ms Moroney that whistle-blowers at the Transport Ministry had been targeted by Harrison in a restructure after they raised concerns about her spending and behaviour.  

This week it was revealed that in 2016 Mr Hughes had helped the fraudster’s boss at the Transport Ministry, Martin Matthews, become Auditor General – acting as his referee.

Ms Moroney said that’s a clear conflict of interest.

"Being a referee for Martin Matthews’ bid to be the Auditor General compromised Peter Hughes in considering my request to investigate the treatment of MOT whistle-blowers, which he initially declined to do.

"It took Mr Hughes one month to reverse his decision and finally investigate.

"At no time did he declare this conflict to me,” Ms Moroney told 1 NEWS.

Mr Hughes would not be interviewed, but in a statement he said "there is no conflict of interest".

The commission confirmed Mr Hughes "provided a verbal reference to the consultant responsible for recruiting Mr Matthews". 

Mr Matthews is now petitioning Parliament, asking it to review what happened to him – saying he was forced to resign over the fraud by politicians who "held a gun to my head".

Mr Matthews told a press conference this week he had been completely open about Harrison's fraud when he applied for the Auditor General role.

"I also offered the State Services Commissioner (Peter Hughes) as one of my referees, both the director of the Serious Fraud Office and the State Services Commission had a full knowledge and history of what I had done, in terms of my dealings with Joanne Harrison and the dealing of the fraud – I think there was complete transparency around the issue."

And in a report, Mr Matthews said: "The newly appointed Commissioner (Peter Hughes) had known Mr Matthews for many years, and had willingly offered to be a referee in his application for the Auditor General".

Yet in his statement to 1 NEWS, Mr Hughes denied he acted as a referee in his role as State Services Commissioner – rather, he "provided this reference as a former chief executive colleague".

Ms Moroney said it has been badly handled by Mr Hughes.  

"That Mr Matthews says he had the State Service Commissioner as a referee, but Peter Hughes says he provided the reference in a different capacity shows exactly why it lacked judgement for a State Services Commissioner to be a referee for this position."

As State Services Commissioner, Mr Hughes advises public servants on how to handle conflicts of interest and tells them how important full disclosure is.

"Public servants need to exercise a high standard of judgement around the management of conflicts of interest," Mr Hughes is quoted as saying in one guide.

The State Services Commission’s eventual investigation into Ms Moroney’s claims found that while the restructure would have taken place anyway, staff who had raised concerns up about Ms Harrison had been targeted, disadvantaged, hurt and humiliated.

The whistle-blowers, who received compensation and an apology from the Government, were pleased with the findings and said the State Services Commission treated them far better than the Transport Ministry.

Following Ms Moroney’s request to Mr Hughes for a State Services Commission investigation the Transport Ministry’s chief executive Peter Mersi, who had refused to investigate the claims whistle-blowers had been targeted and repeatedly denied that they been, finally decided he would investigate.

The investigation was ham-fisted, the whistle-blowers objected to the terms of reference and it promptly collapsed.

Harrison was deported to the UK this year after serving her sentence for stealing more than $700,000.