Doing business in Perth's health service: Boozy lunches, business class air fares and free renovations on the house

Paul Cottesloe Beach.
  • The Corruption and Crime Commission tabled in the WA Parliament a report into corrupt activity at the North Metropolitan Health Service.
  • It details hows public servants allegedly accepted gifts, including lunches and travel, worth hundreds of thousands of dollars in return for awarding maintenance contracts.
  • One senior public official had $170,000 of renovation done on his house.

It was an open secret for more than a decade that doing business with the health service in Perth required a little help in the form of lunches at expensive restaurants, alcohol, cash and other gifts including the occasional business class airfare and hotel room.

That was until a whistleblower, a junior public servant, contacted the Western Australian Corruption and Crime Commission, which then investigated and found what it describes as “serious misconduct at its most shocking” involving hundreds of thousands of dollars of public funds.

One public officer, John Fullerton, the now former Executive Director of Facilities Management, North Metropolitan Health Service (NMHS), had a $170,000 of renovation done on his house in Glen Forrest by three contractors who then fraudulently invoiced for a proportion of the cost, according to a report tabled in state parliament.

Fullerton himself signed invoices authorising payment, says the commission.

Apparently everyone around him, including his subordinates, knew of the habit of long lunches at restaurants he frequented so often that he was referred to as a VIP by the staff when he arrived.

The investigation estimates that the benefit to Fullerton from the lunches, paid for by contractors, ran to more than $50,000.

The bills at the restaurants, including Rockpool Bar & Grill, Nobu at Crown Perth, Coco’s in South Perth and Galileo Buona Cucina in Shenton Park, included “the most expensive wine he (Fullerton) could find on the menu”.

The commission says Fullerton would tell contractors: “Put it on my bill.”

This meant the monthly invoice from the contractor.

Since 2005, Fullerton, and sometimes his wife, were given flights, meals, perfume, clothes and accommodation both interstate and overseas by contractors, all of whom then obtained regular work.

The direct benefit to Fullerton is estimated at $150,000, says the Corruption and Crime Commission.

Fullerton disputes the accuracy of the total dollar value for meals, number of restaurant visits and the number of domestic and overseas trips. He did not provide any alternate figures.

One contractor, QED, said of Fullerton: “When you’re ordering something and we want the $40 wine, he’d want the $150 wine, you know, and he’ll have the entrée, main and dessert, whereas we’d all have maybe just a main”.

Travel paid for by QED included a three week trip to the UK in 2003 for Fullerton and his wife, including business class airfares.

Fullerton, when asked by the commission, said the travel and accommodation was a gift.

The commission’s report says Fullerton was in 2016 paid $6,500 in cash in five payments of $1,300 each. Fullerton denied receiving cash payments. However, the Commission has accepted other witnesses’ evidence as credible and truthful on this point.

A report tabled in the state parliament today shows public officers :

  • Accepted interstate and overseas travel and accommodation worth tens of thousands of dollars from contractors in return for awarding them work.
  • Accepted expensive restaurant meals, entertainment, alcohol and other gratuities worth tens of thousands of dollars in return for awarding work.
  • Received thousands of dollars in cash payments from contractors in return for awarding them continued work;
  • Facilitated contractors to fraudulently invoice NMHS to cover the costs of the corrupt benefits of travel, accommodation, meals, entertainment and cash they received.
  • Colluded with contractors in bid rigging activities for the WA Health and NMHS procurement processes.

“Every dollar corruptly converted was a dollar less to be spent on healthcare,” says the report into bribery and corruption in maintenance and service contracts within North Metropolitan Health Service.

“Public servants should receive no reward for doing the job they are paid to do, except ‘thanks’.”

The report recommends criminal charges be considered against three former public servants, including Fullerton, and 10 contractors.

The commission is concerned that what it uncovered may be just a sample of what’s happening in WA Health and possibly in other WA Government agencies with significant contracting activities worth hundreds of millions of dollars.

“How certain are Departmental Heads, Directors General and Chief Executive Officers that behaviour identified in this investigation is not happening under their noses?” says the report.

The cover-up

The main players went into cover-up mode when news of the investigation broke.

Philip Wood, a director of maintenance company Fox United Building Pty Ltd, told the Commission he panicked. Fox had been engaged to renovate Fullerton’s private residence. In return, Fox was awarded NMHS building maintenance contracts.

He contacted and met with Grant Alexander who had, with his wife, the consultancy PA Projects which between 2012 and 2016 invoiced WA Health $2,077,965 in project management fees.

Wood and Alexander agreed they needed to keep quiet, “making sure that nobody tells anybody anything”.

A conversation was then covertly recorded by the Corruption and Crime Commission at a lunch at the Rose and Crown Hotel in Guildford in early August 2017.

Wood, his brother and Fullerton discussed the commission’s investigation.

Wood: ” … the biggest issue is that if they ever do a raid and seize my system basically even if I delete them off my personal computer they can always pick ’em up. They can always go back on to the actual main hard drive for my emails and pick ’em up.

“I’ve spoken to my computer guy and basically said, or a computer guy, and basically said well how do I get rid of this? He said the only way that you can get rid of those emails and make them so they never ever existed is basically to … nuke your hard drive .. which will look extremely f**ken suspect.”

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