‘Tentacles everywhere’: Andrews denies power centralised in premier’s office

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An anti-corruption probe has found the Andrews government improperly awarded a Labor-affiliated union a $1.2 million contract, while raising fresh concerns over the centralisation of power and declining standards of integrity in the premier’s office.

The Independent Broad-based Anti-corruption Commission report found staff in the health ministers’ and Premier’s Private Office (PPO) breached their ethical obligations by pressuring independent bureaucrats to award a contract to the Health Workers Union (HWU) to train hospital staff to deal with violence against health workers on the eve of the 2018 election.

Premier Daniel Andrews sought to downplay an anti-corruption probe that pilloried his government for improperly awarding a Labor-affiliated union a $1.2 million contract.Credit: Eddie Jim

Premier Daniel Andrews sought to downplay the report after it went public on Wednesday, stressing that there were no findings against anyone and rejecting any suggestion that his office undermined the independence of ministers.

Operation Daintree, first revealed by The Age in November, for three years investigated how the Department of Health and Human Services awarded HWU a $1.2 million contract without a competitive tender process because of significant pressure from ministerial staff, the premier’s office and HWU boss Diana Asmar.

IBAC cleared Andrews, former health ministers Jill Hennessy and Jenny Mikakos, staff in the minister’s and premier’s office and public servants of corrupt conduct, but issued a damning assessment of the centralisation of power under the premier’s watch and a “significant erosion” of ministerial accountability.

“The union was given privileged access and favourable treatment,” IBAC said in its report tabled in parliament on Wednesday. “The combined effect of these failings and unethical conduct resulted in a contract that should not have been entered into with the union and an outcome which was not in the public interest.”

Andrews said on Wednesday that the IBAC report was a probe into a one-off incident that occurred five years ago.

“The anti-corruption commission has looked at a series of matters from some years ago, and have found no corrupt conduct,” he told reporters.

“That’s just a fact. I can’t change what happened four or five years ago. [But] we can to make sure that the highest standards are met in the future. That’s the fundamental responsibility that I have.

Under Victorian law, the anti-corruption body is prohibited from finding that a person has committed a criminal or disciplinary offence, but can make findings of fact and express comments or opinions about a person’s conduct using the civil standard of proof – the balance of probabilities.

IBAC made 17 recommendations to improve governance and standards because it ultimately found misconduct that it believed was so serious it needed to be addressed.

IBAC found staff in the PPO “influenced … ministers and their offices, and through them, the department”.

Andrews rejected any suggestions of centralised power in his office that undermined the independence of ministers, dismissing the 132-page report as “educational” and some of its findings as a “sweeping narrative”. He repudiated IBAC’s assessment that there were broader issues of political interference by his government.

“I was a member of the Bracks government. I was a member of the Brumby government. I have got some appreciation of other governments,” Andrews said.

“The notion that the premier’s office today is a vastly different one to what it used to be in the past and it used to be some sort of timid outfit – no, that is just not right.

“My staff work with their counterparts in ministerial offices, just as I work with my counterparts in cabinet to deliver our agenda. We all work together.”

IBAC said the probe was a “further illustration of the significant deterioration in the observance of more traditional rules and conventions, which have affected the role and independence of ministers and their departments”.

It also described the scheme as another example of the “phenomenon of grey corruption that is of increasing concerns to integrity bodies”. Soft or grey corruption, IBAC said, involves bending or breaking rules that unfairly favours allies of decision-makers. The watchdog said it corroded standards of public governance, and, if left unchecked, increased the risk of corrupt criminal offending.

The anti-corruption commission found Asmar met staff in the premier’s and Hennessy’s office in early 2018 on a proposed training program to address violence in healthcare settings in an attempt to lobby the government to fulfil the pledge it made ahead of the 2014 election.

Throughout that year, political staff pressured the department to award the contract to the union, according to the IBAC report, despite the union’s newly formed training entity not being a registered training organisation or having relevant experience in providing training to healthcare workers.

A key focus of Operation Daintree was a private meeting between the premier, Asmar and others on October 4 because it related to a $2.2 million 2018 election commitment that effectively extended funding to a contract that was improperly awarded, just hours before the government entered into caretaker mode. When questioned by IBAC investigators, Andrews could not recall critical details.

“It is highly likely that the premier was informed of the commitment proposal as formulated by his advisers and conveyed the substance of the intended commitment to Ms Asmar when he met her before making the announcement. During his examination, the premier ultimately accepted that he may have done so,” IBAC said in its report.

Premier Daniel Andrews, then health minister Jill Hennessy (third from right) and union leader Diana Asmar (right) announcing the $2.2 million election commitment ahead of the 2018 election.Credit: Paul Sakkal

“The premier initially said in his evidence that the announcement did not involve a commitment to any particular provider.

“He was then played a video clip of his announcement that showed the commitment as being one in partnership with the HWU. The premier had no memory of that commitment.”

Mikakos, who became health minister after the 2018 election, told IBAC that it appeared the $1.2 million contract was signed to placate Asmar and looked like a “way … of injecting funds into the HWU”.

She told IBAC she would not have entered into the contract if she was the responsible minister at the time and would have taken steps earlier to deal with it if she had been properly briefed. Hennessy told investigators she had no detailed understanding of her adviser’s role in developing the $2.2 million election commitment

Mikakos gave a scathing appraisal of the way staff in the PPO operated, describing the current government as “very centralised with the PPO having its tentacles everywhere” and that her handover meeting with Hennessy was principally focused on how “interventionist” the PPO and premier had been in the health portfolio.

The integrity watchdog was also critical of bureaucrats who caved to the political pressure, despite its significant concerns about the proposal, including the union’s capacity to deliver the training program – conduct that the commission said fell short of the standards required of public services.

When department officials tried to cancel the contract, staff from the premier’s office intervened to keep it intact, IBAC found.

The union’s training body – the Health Education Federation – only trained 83 of the planned 575 staff between October 2018 and March 2020, when the scheme ended because of the COVID-19 pandemic. The union used about $335,000 of the $1.2 million contract.

IBAC found the quality of the training was poor: 60 per cent of hospital staff who attended the training believed the trainers were not organised or prepared, while nearly 80 per cent did not believe the trainers had in-depth knowledge of occupational violence and aggression, or providing a program that was relevant to the health sector.

Unlike the Operation Watts report, which also did not find corrupt conduct but was scathing of ministers and staffers and in response to which the premier immediately accepted all recommendations, Andrews is yet to commit to implementing all 17 recommendations of Operation Daintree. On Wednesday, he said he would lead a cabinet discussion on the matter and could not commit to responding to IBAC’s October 31 deadline.

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