A senior public servant who perpetrated one of the biggest rorts of taxpayer funds in recent Australian history jacked up his corporate credit card limit and started charging for fake services within two days of being hired.
- Paul Whyte began deceiving his bosses almost as soon as he began work
- Departmental credit cards were not meant to be used for procurement
- Whyte had worked with his new boss Graham Searle at Landgate
Paul Ronald Whyte late last year pleaded guilty to stealing $27 million from the WA Department of Communities, in part by invoicing a company for work never provided on his corporate credit card.
His old boss, former Department of Housing Director General Graham Searle today appeared at a rare public hearing by the Corruption and Crime Commission.
The commission is examining how a person in such a senior position as Whyte was able to systematically defraud the state to such an extent and whether the governance of the department had contributed to or enabled it.
Mr Whyte reported directly to Mr Searle.
The day after Mr Whyte was hired as the general manager of commercial and business operations in October 2009, he applied for the limit on his corporate credit card to be increased from $20,000 to $50,000 per month, the commission heard.
He also requested the individual transaction limit be jacked up from $5,000 to $20,000.
Mr Searle told the commission he could not recall what had been used to justify that change.
Boss took transactions ‘at face value’
Whyte was granted the increase despite departmental policy at the time capping the cards to $20,000 per month.
The day after that he made his first purchase, to a company called Boldline, totaling more than $19,000.
Boldline was paid for “project services”.
No project was named, just a string of numbers.
Whyte continued to pay Boldline for amounts totaling just under his $50,000 monthly limit for many months, adding up to $1.1 million over about two years.
There is no suggestion Mr Searle was aware that Mr Whyte was perpetrating the fraud.
Mr Searle said he had relied on his “senior lieutenant” to provide him with the right information but conceded he had taken those payments at face value.
It was not departmental policy for the credit cards to be used for procurement, the commission heard; rather, they were to be used to pay for staff transport and accommodation.
Executives had Landgate links
Mr Searle worked with Whyte at Landgate for a number of years before Mr Searle moved across to the Department of Housing, where he became Director General in early 2009.
“We were friendly, we were not personal friends,” Mr Searle told the commission.
“I mean, we didn’t socialize outside of work.”
He said he knew Whyte owned racehorses as he spoke about them.
Whyte owned multiple race horses and was an inveterate gambler.
Over 2009 and 2010, the department was restructured, bringing the number of senior people reporting directly to Mr Searle from five to four.
All but one of the senior executives were replaced in the space of about 12 months.
Whyte and another woman who filled two of the four senior roles had worked with Mr Searle at Landgate.
Counsel assisting the commissioner, Anthony Willinge, asked whether it was “all a bit cosy” that the senior executives and former Landgate employees sat on each other’s job panels for the positions.
Mr Searle said this was mitigated by other people also being part of the selection panels.
Department ‘didn’t meet targets’
Mr Searle was also asked about why the move combined two roles which saw financial approvals and commercial project applications handled under one position that was ultimately filled by Whyte in October 2009.
Mr Searle said at the time, he was less concerned about the conflation of those roles, which allowed the person holding that position to procure contracts and then authorize their payment.
He said he believed he had been brought into the Department of Communities to “revitalize it and make it more responsive to government policy directions” and agreed he had a mandate to reform it.
“Government sets a lot of targets for departments, housing wasn’t renowned for meeting any of these targets or even aiming for them,” Mr Searle said, adding it was clear the agency felt “relatively defeated”.
“They were very reluctant to look at doing anything outside of a very narrow band,” he said.
He also described an uncomfortable reception when he started with the agency.
“I still have this vivid memory of sitting at my first corporate executive meeting and not one of them giving me eye contact, and I thought ‘this is going to be fun’.”
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