An ongoing inquiry into the misuse of public funds by the Australian Labor Party (ALP) in Victoria has heard how an African community leader in Melbourne pocketed around $75,000 in taxpayer funds through the manipulation of a grants program.
The Somali Australian Council of Victoria (SACOV) allegedly received the funds after the mayor of Banyule City Council, Rick Garotti, lobbied the state gaming minister, Marlene Kairouz—a fellow ALP factional ally—for a $100,000 grant under the Victorian Responsible Gambling Foundation.
SACOV received $75,000, which IBAC Counsel Chris Carr S.C. claimed was almost entirely pocketed by the head of the organisation, Dr. Hussein Haraco.
Financial records obtained by IBAC revealed that the funds were supposed to be split between $50,000 for wages and salaries, $7,000 to video, $6,000 to admin, and $4,200 to training.
Carr told the inquiry that Haraco pocketed all but $6,000 for admin. The doctor was supposed to front the inquiry but provided medical documentation excusing him from testifying.
The counsel also revealed that SACOV had engaged in a practice called “double counting,” which would see the group claim the same funds twice from different government departments.
For example, SACOV would receive $2,000 for a computer from both the Council and the Victorian state government, totalling $4,000. The group would send the same invoice to both departments and then pocket the excess funds.
Garotti, who was testifying at the inquiry conceded that he was surprised to learn of the double-dipping.
“I’m gobsmacked by it, and it clearly shows an overall governance issue between state and local levels of funding going to agencies,” he told IBAC on Oct. 19.
It is alleged that over the years, SACOV also received around $430,000 in grants from the Banyule City Council, of which $100,000 was supposedly siphoned off via “double counting.”
The revelations come as part of a wide-ranging investigation by the Independent Broad-based Anti-corruption Commission (IBAC) into “serious corrupt conduct” and the misuse of public money for “party-political work or other improper purposes.”
Currently, it is focused on whether public funds have been used for activities such as “branch stacking” or factional work.
Branch stacking—or the practice of recruiting members to a political party (sometimes by paying them)—is designed to influence the outcome of preselecting candidates.
One of the primary motivations for doing so is the competition for influence between rival factions in a political party—in this case, the Moderate and Socialist Left factions of the ALP in Victoria.
State Premier Dan Andrews triggered the IBAC investigation after a special report by media outlets, 60 Minutes and The Age, exposed the extent of the practice.
Haraco was an ally of the Victorian Moderate faction and, together with Garotti, paid the membership fees of around 300 associates at the Heidelberg branch of the party—occurring over a decade.
Garroti has admitted to the inquiry that a third of the members were “non-genuine.”
Further, in the lead-up to the investigation by media outlets, Garotti and the leader of the Moderate faction, Adem Somyurek, a state MP who resigned from Cabinet following the revelations over branch stacking, used claims of racism as cover for their activities.
A secret recording was played, which saw them discuss leveraging issues such as Black Lives Matter to divert the attention of journalists.
The duo also drafted an email response to inquiries on behalf of Haraco, which read, “The Somali community is sick of journalists such as yourself accusing us of branch stacking … is it because we are black?”
Garotti admitted his behaviour was wrong and he hoped the IBAC investigation could change the culture of the ALP.
“I’m not excusing my behaviour in the party, but hopefully for a young person coming through the ranks in the future, it’s a better culture, and they don’t get caught up,” he said, adding that the culture was “symptomatic” of all factions in the ALP.