The PM’s pick finally faces a Senate grilling over sports rort

Next Monday, March 16, the secretary of the Department of Prime Minister and Cabinet Phil Gaetjens is due to front a Senate committee examining the sports rorts affair. Inq investigates what’s at stake — and why it matters.

Phil Gaetjens is Australia’s most powerful public servant. He is the custodian of the integrity of the Australian public service, as designated by the Public Service Act 1999. He is the government’s highest-paid public servant, earning $914,416 a year. 

It is he who appoints other heads of department — with input from the Australian Public Service Commissioner — and it is he to whom they ultimately report. 

But if Gaetjens himself doesn’t measure up to the job — a charge made, significantly, by a former head of the prime minister’s department after Gaetjen’s investigation of Senator Bridget McKenzie’s grant-approval methods during the sports rorts scandal — then to whom is the secretary accountable?

The answer is his boss, Prime Minister Scott Morrison, who appointed Gaetjens to the public sector’s most powerful job for a five-year term in the months after Morrison’s 2019 election victory.

Gaetjens had come to the role after a year as Treasury secretary, where he had landed after three years as Morrison’s chief of staff. Labor alleged that his elevation to Treasury secretary was an “overtly partisan political appointment”.

He had also worked for a decade as former treasurer Peter Costello’s chief of staff. Costello himself said that Gaetjens “was never doing politics”. For his part, Gaetjens says he should not be judged by the roles he has held.

Whatever the case, Gaetjens faces a Senate committee inquiring into the scandal-laced sports grants affair not as a storied public official but as a man tarnished by the last, best-known thing he did for Morrison: a report into McKenzie’s conduct during the sports rorts affair, which saw a river of grants being diverted to seats targeted by the Coalition for an unlikely election victory.

McKenzie had set up a parallel grants program in her office, which took precedence over the entire bureaucracy of Sport Australia — a nominally independent agency.

In an odd parallel, Gaetjens ran an investigation — at the behest of Morrison — which was separate to an investigation undertaken by the Australian National Audit Office (ANAO) and managed to reach findings at odds with the ANAO.

Gaetjens found no fault with the targeting of McKenzie’s grants, where the ANAO found extensive evidence they were skewed to marginal seats. Gaetjens did, however, find fault with McKenzie for failing to declare a conflict of interest, including for a grant to a shooting club which had given her a membership. 

In Senate hearings earlier this month it emerged that Gaetjens and his team at the Department of Prime Minister and Cabinet had taken a tightly targeted approach to the task of investigating McKenzie’s grants. 

Gaetjens’ PMC officials hadn’t known of the existence of 136 emails which had buzzed between the prime minister’s office and McKenzie’s office in relation to the grants.

Nor did they know of 28 versions of a spreadsheet of approved sports grants which had been passed between McKenzie’s office and Morrison’s office.

Gaetjens’ PMC officials conceded that while Gaetjens himself had spoken with McKenzie, no one had spoken to anyone from the prime minister’s office. 

At the hearing, Senator Jacqui Lambie responded: “I would have thought that the investigator just doesn’t want to investigate his boss. That’s made quite clear. As a matter of fact, it’s disgraceful. Jesus!”

Critically, the PMC officials professed to be unaware that Morrison’s office had been engaged in email exchanges with McKenzie’s office in the hours after parliament had been prorogued.

The evidence is that in the four hours after parliament was dissolved at 8.29am on April 11, there were emails between McKenzies’ office, the prime minister’s office and Sport Australia.

Between 8.46am and the last email at 12.43pm, changes were made to the list of approved grants. One was removed and nine new grants were introduced, adding over $3 million to the total. 

The ANAO established that at least one change was made at the behest of the prime minister’s office. It remains unclear who ordered that nine new grants be introduced. McKenzie broke her silence on the issue to say it wasn’t her — meaning it was either her staff acting without her knowledge or it was the prime minister’s office. 

Either way, the exchange — an act of executive government — occurred once the period of caretaker government had started. It shouldn’t have, according to Dr Michael Keating, a former head of PMC. 

“The head of the Department of Prime Minister and Cabinet is expected to act as guarantor of the integrity of the caretaker conventions,” Keating told Inq. “When department officials are uncertain they would normally turn to him for guidance.”

The Australian Public Service Commissioner has confirmed to Inq that the Department of Prime Minister and Cabinet is in charge of the caretaker guidelines. 

A PMC spokesperson told Inq via email: “At the time of his inquiry, and in the ANAO report which was public at the time of his inquiry, there was no mention of any issues related to caretaker conventions.”

In other words, Gaetjens was apparently unaware that Morrison’s office had exchanged emails with McKenzie’s office — even though Gaetjens had been tasked with investigating how the McKenzie grants came to be awarded.

Inq asked PMC to clarify if Gaetjens had any concerns about a breach of caretaker conventions now that the information was publicly known. We received no response. 

The Senate committee is likely to look closely at who ordered the inclusion of new grant approvals given that they may be unlawful — not because they were made during the caretaker period but because there was no legal basis to take away decision-making power from Sport Australia, an argument articulated by Sydney University Constitutional law professor Anne Twomey, among others.

It raises the prospect that someone from the PMO acted unlawfully during the caretaker period — and that the secretary of the department failed to discover it.

It will be a test of Gaetjens’ ultimate defence: that he was simply following orders in the form of a narrow-scope inquiry ordered by his boss, the prime minister. What Gaetjens may or may not have found in his inquiry is secret, with Morrison classifying it as cabinet-in-confidence — an arrangement which Gaetjens has not publicly objected to.

Keating has described the cabinet-in-confidence ploy as “an absurd proposition”.

“Invariably when a government commissions a report on something, it is normal for it to first go to cabinet, but it is then subsequently released to the public,” Keating wrote  

“The only obvious answer” for the report being kept secret was that “it cannot stand-up to public scrutiny”. 

The sports rorts affair may ultimately blow over. It’s the details that matter in stories like these, and professionals like Morrison know that sooner or later the public will either be confused by the avalanche of information, will lose interest, or another crisis will take its place.

The legacy, though, is something new in Australian public life: a vacuum of accountability at the very top of Australia’s government.

Inq went looking for the organisations or people who might stand up for the independence of the public service in the hypothetical case of a prime minister who might be prepared to bend the rules, lie to the Australian public, stonewall when the evidence mounts up and leave it to a compliant department head to help manage the issue.

The Australian Public Service Commissioner is an impressive title that sounds like it might be the body to guarantee public service integrity — but it has no authority over the secretary of the PMC. 

What’s more, the commissioner has already declined to intervene in a real complaint lodged by Labor arising from the sports rorts affair: the case of Health Department secretary and ex officio member of the Sport Australia board Glenys Beauchamp, who destroyed notes she made of conversations relating to the grants.

Commissioner Peter Woolcott noted that he did not have evidence that there was “widespread or ongoing issues in the service” relating to the destruction of documents.

“Without this, I am of the view this does not require further review,” Woolcott said. 

The Secretaries’ Board, a body which brings together all Canberra’s departmental secretaries and which is enshrined in legislation, sounds promising as a professional standards group which might raise the alarm on politicisation of the public service — however the board is chaired by the secretary of PMC who holds employment powers over other secretaries.

Then there’s the Institute of Public Administration Australia, which styles itself as providing public sector thought leadership and capacity building, counting among its members the heads of Commonwealth departments.

However it has no remit to blow the whistle on any of them.

The accountability that remains, then, is public exposure through Senate hearings or freedom of information, each of which have been progressively nullified by government actions designed to halt the flow of information.