EXCLUSIVE
The Queensland lawyer who broke serious Federal laws as head of the National Competition Council - but was just months later reappointed to that same role - has been given a second senior Federal Government position.
The Klaxon can reveal that nine months into a secret Commonwealth Ombudsman investigation into her illegal actions as National Competition Council President, Julie-Anne Schafer was appointed to a terrorism risk agency.
In mid-September, as the Ombudsman was finalising its year-long investigation, the Federal Government appointed Schafer to a $20,000 a year position as a part-time director of the Australian Reinsurance Pool Corporation (ARPC).
The Klaxon’s revelations on Tuesday. Source: The Klaxon
That was a two months after the Ombudsman presented the Federal Government with a draft version of its findings, which was as least as damning as the final report delivered in December.
The ARPC “administers the national terrorism pool”.
The Federal Government agency was created in 2003 to provide commercial property insurers with “reinsurance” for “commercial property and associated business interruption losses arising from a Declared Terrorism Incident”.
As revealed by The Klaxon Tuesday, Treasurer Josh Frydenberg last month appointed Schafer National Competition Council President for three-years.
That was despite a secret, year-long, Commonwealth Ombudsman investigation in December finding Schafer - in that same role - had broken serious Federal laws and engaged in “defective administration”.
As NCC President, Schafer, a lawyer, made 53 illegal payments totalling $41,073 to fellow NCC executive Chris Jose.
The Ombudsman report found Schafer breached section 7(11) of the Remuneration Tribunal Act, as well as section 25 of the Public Governance, Performance and Accountability Act, having “failed to exercise due care and diligence” as required by law.
Findings against Schaffer in secret Commonwealth Ombudsman report.
Schafer left the NCC in December when her three-year term as President ended. The Ombudsman’s, highly-damning, final report was completed on December 3.
The scandal had been kept under wraps until January, after The Klaxon obtained a copy of the secret Ombudsman report.
Last month, on March 4, Frydenberg reappointed Schafer as NCC President.
In the three weeks before the election was called the Coalition has made almost 140 appointments or reappointments to Commonwealth bodies.
The NCC oversees access to monopoly assets and decides on the “form of regulation” of gas pipelines and whether they are subject to “light or full regulation”.
The Federal Government was provided with a draft version of the Ombudsman report on July 13 last year, two months before Schafer was appointed to the ARPC.
“On 13 July 2021, the investigator provided Treasury, the NCC, Finance and PM&C with a draft version of this investigation report for the purpose of affording procedural fairness,” the final Ombudsman report states.
“The investigator considered the agencies’ responses and incorporated the additional information they provided into this final report.”
The final report indicates that the draft report of July 13 was even more damning, particularly regarding the Department of Finance waiving the Jose debt, despite being told by a senior department official that it was likely illegal to do so.
As NCC President Schaffer is now being paid just over $42,000 a year for the part-time roll.
That means that - after - the Federal Government was handed the draft Ombudsman report containing highly-damning findings against Schafer it appointed her to two further roles earning over $62,000 a year.
Timeline
- Jan 25 2021: Commonwealth Ombudsman investigation begins
- July 13 2021: Ombudsman delivers draft findings to Federal Government
- Sep 16 2021: Federal Government appoints Schafer to ARPC for three-year term
- Dec 2021: Schaffer’s three-year term as NCC President ends
- Dec 3 2021: Ombudsman delivers final report to Federal Government
- Jan 18 2022: The Klaxon reveals the scandal, having obtained the secret report
- Mar 4 2022: Treasurer Frydenberg appoints Schaffer as NCC President for three-year term
During her previous stint as NCC President Schafer authorised the $41,073 illegal payments to fellow NCC boss Chris Jose, who was also (and remains) an executive of Federal Government media regulator the Australian Communications and Media Authority (ACMA).
In December 2017 Jose was appointed to the NCC as a part-time Councillor by then Treasurer Scott Morrison. In May 2018 Jose was also appointed as full-time executive at the ACMA.
Julie-Anne Schafer broke Federal laws and engaged in “defective administration”.
It is illegal for a full-time Federal government employee to be simultaneously paid for a second government job.
The double payments continued for two years until they were stopped on April 30, 2020 after a whistleblower in March 2020 wrote to Schafer and the NCC regarding the illegality of the payments.
The final Ombudsman report shows laws were broken, policies were disregarded and expert departmental advice was ignored.
“The investigator’s view is that a reasonable person responsible for making payments under the RT Act would have taken steps to familiarise themselves with the provisions of that Act,” the report states.
“The consequence of the NCC’s failure to identify that (Mr Jose) was no longer entitled to receive payments for (his) part-time role was an overpayment to (Mr Jose) in excess of $40,000 over a period of approximately two years.
“The investigator notes that these payments only ceased after the issue was brought to the NCC’s attention by the discloser.
ACMA boss Chris Jose
“The investigator also notes the observations made by the Assistant Minister to the Prime Minister and Cabinet and the Claims Officer at Finance, that (Mr Jose) was paid as a result of ‘defective administration’ by the NCC,” the Ombudsman report states.
Despite the seriousness of the matter, and the apparent subsequent cover-up, no one - including Schafer - faced any penalties for the illegal behaviour.
Rather than having Jose repay the money, five Federal Government departments and agencies went to substantial lengths to ensure the ACMA boss didn’t have to return NCC the payments.
That chain of events was kicked-off by Schafer who, rather than simply having Jose repay the money, passed the matter on to the Department of Prime Minister & Cabinet (PM&C), citing an unspecified “perceived conflict of interest”. (Continues below)
Schafer has repeatedly refused to comment when contacted by The Klaxon.
Frydenberg did not provide an answer when asked why he had reappointed Schafer after she had been found to have engaged in illegal conduct - in that same role - by the Commonwealth Ombudsman.
The Federal Government’s moves to protect Jose and allow him to keep the payments are in direct contrast to the government’s handling of recovering alleged Centrelink overpayments.
Those “robodebt” collections, which saw the government illegally raise $1.76 billion in debts against 443,000 people, were followed by a large spike in suicide among welfare recipients.
Shafer’s appointment to the ARPC was announced by Assistant Treasurer Michael Sukkar on September 16 last year.
“The Morrison Government has today appointed Ms Julie-Anne Schafer as a part-time board member of the Australian Reinsurance Pool Corporation (ARPC) for a three-year period,” Sukkar said in a statement.
The chair of ARPC is Ian Carson and the Chief Executive is Dr Christopher Wallace.
“I warmly welcome Julie-Anne Schafer to the ARPC Board,” Carson said in a statement released that same day.
“Her deep insurance and public sector experience, coupled with her legal background, will be an asset to the ARPC Board at a time of dynamic change for the organisation.”
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