'You know how these things get blown up': Pike on tape

By David Donaldson

March 10, 2016

Former Education Minister Bronwyn Pike defended herself against suggestions that concerns about propriety within the Department of Education were not properly acted upon at Wednesday’s hearing into the department’s failed Ultranet software system.

She was recorded in a 2014 phone tap telling former Education Department deputy secretary Darrell Fraser “these things get blown up” in response to media reports about alleged corruption in the department.

In the recording, played at the Wednesday session of the Independent Broad-based Anti-corruption Commission hearing, Fraser can be heard telling Pike (pictured) he gave $1 million to project contractor CSG “sort of on the quiet”.

Pike responds: “Yeah, but you know how these things get blown up.”

Under questioning, the former minister said she didn’t know what he was talking about and that the $1 million contract with Alliance Recruiting — which one former employee described as “a fraud” — was not made during her time as minister.

“The issues around transparency go right back to before the tender was issued.”

She said she had not heard of it until reading the hearing transcripts and was “very surprised and disappointed” to hear of its existence.

The inquiry heard an executive manager of an unsuccessful tender bidder emailed the minister to inform her there was a perception Fraser was biased in his tender decision-making, stating “the process has not been fair” and that “the issues around transparency go right back to before the tender was issued”. The process had given bidder Oracle an “unfair advantage”, he said.

He suggested the department carry out an internal review into governance processes and appoint an independent member of the tender evaluation panel.

It appears no internal investigation took place. Pike responded that it was normal practice that someone from her office would pass on such correspondence to the department to deal with, and “I was advised that this was disgruntled people who had not been successful in the process”.

Asked about her knowledge of legal disputes involving contractor CSG, Pike said as minister it was not her job to know such details:

“As minister it’s not my role to know those things. The minister is very hands-off, has the responsibility of setting policy and expects the department to fulfil that in accordance to the rules and in accordance to the probity requirements.”

She told the inquiry that concerns raised by former probity adviser Anne Dalton that Fraser and board member Chris Bennett had acted “blatantly” against her advice not to be in contact with tenderers led Pike to remove Fraser as chair of the Ultranet board and appoint two extra people, Tony Bugden and Tony Lubofsky. Both Fraser and Bennett remained on the board, however.

A procurement officer on the board, Lexton Gebert, earlier told the court Lubofsky joined with Fraser and Bennett in shouting abuse at him during meetings. Gebert said the changes made no difference to their behaviour.

The $1.4 million ‘Big Day Out’

In another email, then-president of the Victorian Association of Secondary Principals Brian Burgess asked for feedback from other principals on whether the massive launch party for Ultranet — called Big Day Out and now believed to have cost $1.4 million — “was well spent”, noting “we get precious little PD [professional development] resourcing in Victoria”.

Seeing the email, Pike wrote to Fraser: “We will Freeze him [sic] but I hope that other [principals] have the courage to chastise him.” The former minister said she “probably shouldn’t have responded to the email” and agreed her language was “somewhat intemperate”.

Former general manager of the department’s audit risk branch James Kelly told the inquiry that when he tried to access electronic information from Fraser and former acting secretary Jeff Rosewarne’s computers, he discovered they had been wiped.

Stating it was “not standard practice” to delete information, Kelly said he’d been informed Rosewarne and Fraser had requested the IT department wipe their computers.

Kelly also revealed he had tried to put Ultranet on the department’s audit plan — before any suspicions had been raised — but these attempts were strongly resisted by Fraser and Rosewarne. At the time, deputy secretaries could easily knock things off the plan, he said, but processes have now been amended to make it more rigorous.

Former Education Department secretary Peter Dawkins told the hearing he only learned of a “blokey, boozy culture” between Fraser, Rosewarne and John Allman (an acting deputy secretary of the department and close friend of Fraser) in the last few months of his tenure after a warning by then chair of the State Services Authority Bruce Hartnett.

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