V/Line CEO directed staff to drop probity check, IBAC hears

By David Donaldson

Wednesday July 19, 2017

Former V/Line chief executive Theo Taifalos instructed staff not to pursue background checks into the qualifications and police record of a recently-hired senior manager he had “actively recruited”, who was being paid double that of his predecessor, an ongoing anti-corruption inquiry has heard.

Alan Clifford was employed by the Victorian government’s country rail company in the senior role of general manager rolling stock engineering without the job being advertised, without probity processes being completed, without the involvement of anyone from the human resources unit and above the pay band.

Unusually, the job was offered to Clifford before probity processes had taken place, the Independent Broad-based Independent Anti-corruption Commission heard on Tuesday.

Clifford held the role at the time V/Line hit the headlines for safety concerns around excessive wear on its rolling stock in early 2016. His responsibilities included reporting on asset condition, integrity and compliance matters, and his qualifications to hold the role “will be a matter of inquiry” in the investigation, counsel assisting Ian Hill QC stated.

Taifalos resigned as CEO after weeks of mass cancellations caused by the excessive wear problems and now runs his own consulting business.

Clifford had first been engaged as a contractor, making it easier to then become an employee — even though he had been a contractor for less than a month before being offered a full time position. Others were hired under similar circumstances during the time Taifalos was CEO of V/Line, the inquiry heard.

HR head kept notes on interference

After he was already employed as one of the organisation’s top personnel on an annual salary of $414,000, human resources tried to run due diligence on Clifford. Despite saying he would provide documents to verify his qualifications and personal information to allow for a UK police check, he later angrily threatened to resign when asked to hand them over.

He told HR he was “cheesed off” at the request. This prompted then-CEO Theo Taifalos to yell at the head of HR, saying he would personally attest to Clifford’s competency if anything went wrong, according to testimony by both the HR boss and her direct report.

Taifalos then directed HR not to pursue the probity checks any further, said the two witnesses.

After the conversation, head of HR Jenny Kelman sent an email saying there had been a “communication gap”, stating she had been told everything was fine and the checks would not be pursued.

She was concerned enough about this directive to print off a copy of the email and write on it that she had sent it because she had been instructed to stop asking questions.

At the inquiry on Tuesday, Taifalos denied he had yelled at Kelman, that he said he could vouch for Clifford, or that he had directed HR not to continue probity checks. He told the inquiry he had stated the background checks should continue.

Kelman said she had never been instructed in such a manner and was “quite surprised at the time” that someone would threaten to quit over a standard request for information.

Taifalos was “quite angry and aggressive,” Kelman noted.

Staff were “obviously concerned” about this approach, especially as Clifford had been hired without the position being advertised and with no competitive process, but ceased the background check because “we were directed by the CEO”, said the second HR staffer.

CEO denies knowing about half-million dollar salary

Clifford was eventually given a second 12-month contract, this time at an annual rate of $521,000 — significantly more than the CEO and more than double that of the role’s previous occupant.

Taifalos claimed in the hearing not to have been aware Clifford was being paid so much. When shown evidence he had authorised the pay rate of “$2000 per day”, Taifalos said he “just didn’t appreciate the magnitude of what that meant in terms of an annualised salary”.

Clifford’s partner Nicola Spiers was also hired by V/Line after he commenced, also without the role being advertised and without a competitive process. Spiers was a former employee of Taytell, the company at the centre of allegations of fraudulent TAFE enrolments and fake qualifications covered in the earlier part of the IBAC inquiry.

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