Law breaking official appointed boss of gas “regulator”

“Under the National Gas Law, the Council…has the tasks of deciding the form of regulation of natural gas pipeline systems (light or full regulation), classifying pipelines (as transmission or distribution) and recommending in relation to various exemptions for greenfields gas pipelines,” the NCC states.

Frydenberg did not provide an answer when asked why he had appointed Schafer as NCC President after she had been found to have engaged in illegal conduct in that same role by the Commonwealth Ombudsman.

Timeline:

December 2021: Schafer’s three-year term as NCC President ends

December 3, 2021: Commonwealth Ombudsman finds Schafer broke serious federal laws

January 18, 2022: The Klaxon reveals the scandal, having obtained the secret report

March 4, 2022: Treasurer Frydenberg appoints Schafer as NCC President for three-year term

The revelations come as Opposition leader Anthony Albanese on Friday accused Prime Minister Scott Morrison of stacking key public positions with former Liberal politicians and staffers.

In the three weeks before the election was called the Coalition has made almost 140 appointments or reappointments to Commonwealth bodies.

Albanese said Morrison had been engaging in an “absurdity” by not calling the election while he “continues to make these extraordinary appointments to the Administrative Appeals Tribunal, to the Productivity Commission, (and) to the Arts Council”.

In December 2017 Jose was appointed to the NCC as a part-time Councillor by then Treasurer Scott Morrison.

ACMA boss Chris Jose

Five months later, on May 1, 2018, Jose was appointed as full-time executive at the ACMA, but kept his paid NCC position.

The scandal had been kept under wraps until January, after The Klaxon obtained a copy of the secret Ombudsman report.

“It shows laws were broken, policies were disregarded and expert departmental advice was ignored”

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”.

Among the many senior public servants involved were PM&C Assistant Secretary Peter Rush; Department of Finance Assistant Secretary Gareth Sebar; and head of Market Conduct at Treasury, Christine Barron.

The NCC and Schafer were alerted to the illegality of the Jose payments in March 2018 by a whistleblower.

There is an unexplained gap of well over a month between then and when Schafer officially “wrote” to PM&C on May 6, 2018 and asked that it handle the matter.

Schafer has refused to respond to questions from The Klaxon since January.

She did not respond when asked the nature of the alleged “perceived conflict of interest” which had prevented her from doing her job as NCC President.

Schafer, a lawyer, told the Ombudsman she wasn’t aware the payments to Jose were illegal.

Jose is also a lawyer.

The Ombudsman investigator accepted Schafer’s breaching of the Remuneration Tribunal Act was “unintentional” but found that was not a “valid excuse”.

A “reasonable person” would have made sure they were familiar with the law.

“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.

“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 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.

“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.

“Despite the seriousness of the matter no one has faced any penalties for the illegal behaviour”

“In these circumstances, the investigator considers that it is open to find that the official who authorised the payments…who, in this case, appears to have been the NCC President failed to exercise due care and diligence and accordingly contravened section 25 of the PGPA Act,” the Ombudsman report states.

“(Schafer) failed to exercise due care and diligence and accordingly contravened section 25 of the PGPA Act,” Commonwealth Ombudsman.

“However, given that all relevant parties are now aware of the restriction in section 7(11) of the RT Act, and PM&C proposes to update its appointment checklist to ensure the situation does not arise again in the future, the investigator does not consider that it is appropriate to make any recommendations for further action by the NCC in relation to this finding,” the report states.

Frydenberg reappointed Schaffer as NCC President on March 4.