Remember the biggest scandal of the year? We do. As the year ends, let’s not forget it

Additional reporting by Else Kennedy, Wing Kuang and Anthony Marsico.

It was one of the most egregious cases of pork-barrelling in Australian political history. Yet after a chaotic year, sports rorts has all but slipped from memory.

This is part one of an oral history of the sports rorts affair, pieced together from first-hand interviews with key participants, contemporaneous accounts and evidence from Senate hearings.

Combined, these tell the story of how the whole sorry episode played out through the eyes of those at the centre of it all.

The clubs

For 30 years, the Goolwa District Pony Club in South Australia has been operating out of a WWII-era temporary Nissen army hut. The walls are rusting and the ceiling is caving in.

So two years ago, president James Meyer applied for $40,000 from one of the federal government’s new Community Sport Infrastructure Grant Program (CSIG).

He wasn’t alone. Around the country, more than 2000 other organisations applied. But Meyer reckoned he had a good chance. The club took time with its application, and everything looked pretty solid. However, a few months later, he got rejected.

And then…

James Meyer, president of the Goolwa District Pony Club: “I reckon four to five months later [after getting rejected] I got a phone call out of the blue from the ABC, saying look, we’ve obtained this document from Sport Australia — were you aware that you’d scored 82/100? And I went, no I’ve got no idea.”

If things had been done right, Meyer should’ve got the money. Any application which scored over 74/100 on Sport Australia’s assessment should have. Instead, nearly two-thirds of successful projects scored below the cut-off.

Why did Meyer lose out? It all came down to politics. Months out from the 2019 election, a Liberal government which believed it was headed for oblivion cooked up a desperate, dodgy scheme to funnel the grants to projects in marginal and Liberal-target seats.

The Goolwa District Pony Club had been rorted.

Meyer: “It is really disheartening when you do put a lot of work in, and you think you meet the criteria. And then, due to political fiddling, it gets changed.”

Running a community sport club is a labour of love — thankless hours dealing with petty tyrants, council bureaucracy and difficult parents, trying to make the most out of crumbling infrastructure and dwindling coffers. For little clubs around the country, the CSIG would’ve been a vital lifeline.

Dan Butler, president of the Adelaide Hills Hawks Football Club (Score: 88/100): “We’ve had a tough year with fires and COVID. At Christmas time the whole surrounding area got burned to the ground. Because there were so many organisations looking for support financially, we as a sports club just weren’t a priority at the time, nor should we have been. And then we’ve lost a lot of sponsorship. We didn’t get that grant, we lost that funding and the lights are still pending. We were very lucky our club didn’t get burned.”

Darren Lines, president of the McLaren District Football Club (Score: 88/100): “What we asked for wasn’t over the top. We thought, rather than trying to build the Taj Mahal we would try and be minimalistic so that the funds were shared around to other needy organisations … But when we see clubs or councils being given hundreds of thousands of dollars that were scoring less than where we were scored at, to not get a $50,000 grant we found absolutely shocking.”

Kosta Patsan, president of Newcastle Olympic Football Club (score: 76/100): “We are a worthy recipient. We do a lot of good for the community and we got diddled because we’re in a Labor seat and a safe one.”

The rort

Had Liberal candidate for the seat of Mayo Georgina Downer not held up a big cheque at the Yankalilla Bowling Club in February 2019, we might never have known about the rort. It was that incident that led the Australian National Audit Office (ANAO) to investigate, eventually releasing its report on January 15, 2020.

Its findings were damning. The applications that clubs spent hours painstakingly putting together were sent to Sport Australia. The body created a list of successful applicants, based on the published criteria. But then-sports minister Bridget McKenzie had other ideas about what to do with the $100 million program.

Grant Hehir, auditor-general: “In parallel, the minister’s office had commenced its own assessment process to identify which applications should be awarded funding. This process drew upon considerations other than those in the assessment criteria — such as the project’s location, including Coalition marginal electorates and targeted electorates — and also applied considerations that were inconsistent with the published guidelines.

“It was this assessment process that predominantly informed the minister’s funding decisions, rather than the Sport Australia process.”

In other words, the program had been turned into a great big pre-election slush fund. Comparisons were made with the last sports rorts affair, back in 1994, when Labor’s Ros Kelly used a whiteboard to dole out sports grants. Bridget McKenzie used a colour-coded spreadsheet.

In the weeks after the ANAO dropped its report, it emerged that grants had gone to a stack of clubs with Liberal links, including a gun club of which McKenzie was a member.

But let’s step back a moment from the politics of it all. Yes, things did briefly get difficult for the government. But more importantly, the whole program was probably illegal — in a bunch of ways.

Professor Anne Twomey, University of Sydney Law School: “The Commonwealth does not appear to have constitutional power to support a grants program of this extent.

“Deliberately breaching the constitution or not caring whether you’ve breached it or not as long as the outcome is to your advantage and you’re not caught is not setting a good example to Australian citizens, especially to young people. It breeds contempt and disengagement from our political system.”

Stephen Bartos, former deputy secretary of the Department of Finance: “My view is that the minister didn’t have the authority to make those grants under section 83 of the constitution. Maybe it’s because I worked for many, many years in the finance department, but I had it drummed into me that, under section 83, no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.”

Beyond the constitutional stuff, it’s likely McKenzie just didn’t have the power, as minister, to dole out slush funds as she pleased.

Michael Keating, former secretary of the Department of Prime Minister and Cabinet: “You can’t spend public money without defining the purpose. Parliament shouldn’t appropriate money without the purpose being defined … the people authorising it, ministers, need to ensure that criteria are drawn up consistent with the purpose. It goes back all the way to the Magna Carta. You don’t just give slush funds.”

Professor Geoffrey Lindell, University of Adelaide Law School: “I have serious doubts as to whether [McKenzie] had that authority. I certainly couldn’t find it. I went through all the various possible steps that could be invoked.”

So how did they get away with a rort most foul?

In a sense, Sport Australia was the perfect organisation to run a pork-barrel with. As it’s technically an independent corporate entity, the Commonwealth Grants Rules and Guidelines don’t apply to it. The rules that did apply were railroaded by McKenzie’s office.

But the real reason Scott Morrison and his government got away with it? A perfect mix of luck, smart politics and a little help from his friends.

The fall girl

Bridget McKenzie has always been determined. As an ambitious single mother of four, she took over the Deakin Uni Students’ Association in 2003. Back then she was a self-described “agrarian socialist”. She believed in things like price-fixing for milk, and she marched against the Iraq War and Howard’s voluntary student unionism.

But even then, McKenzie was a pragmatist. It’s what helped her rise in student politics and in the blokey world of the Nationals. It’s why those from her past weren’t surprised when the senator, who once embraced an inclusive pro-LGBTIQ platform in her student days, came out as a socially-conservative opponent of same-sex marriage.

And it helps explain her central role in the sports rorts affair — first as a willing fixer, and later as a reluctant fall girl.

At first, McKenzie, with Morrison’s backing, insisted she’d done nothing wrong.

Bridget McKenzie (January 16): “Right now, as a result of our investment, parents are watching their kids get active on a Saturday morning instead of going down to Bunnings and cooking sausages to earn money. No rules were broken in this program … [it was] a case of reverse-pork-barrelling.”

Scott Morrison (January 20): “Every single one of the projects approved was eligible, every rule followed in relation to the program. The rules were followed. We are looking closely at the report.”

But things started shifting when the Nine papers reported McKenzie had given money to a gun club she was a member of. Morrison responded by getting his old mate Phil Gaetjens, a former chief of staff now in charge of the Department of Prime Minister and Cabinet, to investigate.

Scott Morrison (January 24): “I’ll let [Gaetjens] do his job and then I will look at that advice and take whatever action is necessary.”

McKenzie’s office (January 24): “The minister is not resigning. She is actively engaging in the process and is confident there has not been a breach in ministerial standards.”

Peter Dutton, Home Affairs Minister (January 24): “We’re not listening to Twitter crazies. We are looking at the facts and we make decisions based on that.”

Michael McCormack, Deputy Prime Minster (January 24): “Bridget McKenzie has done an outstanding job as sports minister.”

On January 28, the ABC releases the infamous colour-coded spreadsheet, which highlights just how McKenzie’s office conducted its rort. At the National Press Club the next day, Morrison was defensive.

Scott Morrison (January 29): “This is a serious matter, I’m taking it seriously. That’s why we’re acting on the recommendations of the auditor-general’s report.”

On February 2, Gaetjens advises Morrison that McKenzie breached ministerial standards over the gun club issue. She resigns.

Bridget McKenzie (February 2): “I maintain that at no time did my membership of shooting sports clubs influence my decision making, nor did I receive any personal gain.”

By March, McKenzie is left behind.

Scott Morrison (March 3): “The minister was the decision-maker here … the prime minister’s office was not.”

Senator Rex Patrick: “Bridget knew exactly what she was doing. She had a role to play, and she played it.”

Things couldn’t have worked out better for Morrison.

McKenzie went quietly, putting a neat bow around the whole affair. It was perfect timing. In the months that followed, we’d hear more and more about just how closely involved Morrison’s office was. But by then the virus had arrived, and it was all too late.

Scott Morrison (March 6, responding to a question on sports grants): “I’m dealing with coronavirus.”

Tomorrow: the defence, the lost report, and the questions that remain…