NSW RSL to undergo institution's largest probe ever into fraud allegations

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Updated

May 15, 2017 00:52:06

The NSW RSL will be the subject of a royal commission-style inquiry with powers to compel witnesses to appear and seize evidence, with state Charities Minister Matt Kean today announcing the Government will create the most wide-ranging probe ever to hit the venerable institution.

Key points:

  • Probe will run as NSW Police fraud investigators and Australia’s charity watchdog continue their inquiries
  • Whistleblower welcomes probe, says culture of entitlement out of control
  • Scandals anger veterans, young veteran involvement aims to make way for new era

The inquiry, to be headed by NSW Supreme Court justice Patricia Bergen SC, follows allegations of rorting and embezzlement at the RSL’s NSW branch.

Those allegations have already sparked a NSW police fraud investigation and an inquiry by Australia’s charities watchdog.

“We will get to the bottom of these allegations once and for all,” Mr Kean said.

“These are serious complaints and the fact that they’ve allegedly been committed in the name of one of our oldest and most respected institutions is totally unacceptable.

“We want to clean up the mess and make sure it never happens again.”

The announcement also comes a fortnight after RSL NSW’s governing body, the state council, sacked chief executive Glenn Kolomeitz, who blew the whistle on the alleged frauds.

The RSL maintains he was terminated due to a breach of contract, a claim Mr Kolomeitz denies.

Speaking for the first time since he was removed from his job, Mr Kolomeitz, a former army lawyer and barrister, told 7.30 he welcomed the inquiry.

“This will set the RSL up for a clearing of the decks and brighter, more transparent future for the organisation to be able to service the escalating needs of generations of veterans,” he said yesterday.

Tonight 7.30 will speak exclusively to Mr Kolomeitz about his 18 months as chief executive at RSL NSW.

Mr Kolomeitz describes a culture of entitlement which has spun out of control.

“We’ve had sub branches … which flew their executives and their executives’ wives to Thailand to visit the factory which was making their blazers,” he said.

“We had a sub branch which was giving $500 beer cards to each member when they renewed their membership each year.”

He was particularly concerned about NSW’s state council, which he said lacks the expertise to run the $500 million charity.

“I would have to say many people on that state council would not know the difference between a balance sheet and a form guide, and for a half-a-billion-dollar organisation, that’s disgraceful,” he said.

Mr Kolomeitz ordered a forensic audit into NSW’s books early in his tenure, and it uncovered that between 2006 and 2016 eight members of the state council received millions in consultancy fees while sitting on the board of aged care charity LifeCare, which the RSL partly owns.

RSL directors are volunteers and are not supposed to receive payment for their work.

“I am completely fed up,” NSW Veterans Affairs Minister David Elliott said.

“Based on the emails, letters and conversations I have with veterans around NSW as well as their sub-branches, there is overwhelming support for the Government to intervene.

“It is heartbreaking to see the NSW RSL trashed in such a way and this is an opportunity to restore public confidence in this iconic organisation.”

7.30 contacted NSW RSL president John Haines but he declined to comment on the inquiry.

The RSL is under siege across the country amid allegations of financial mismanagement and misappropriation of funds.

In South Australia the league entered into voluntary administration last month due to a financial collapse, and the Queensland branch is under fire for its generous system of out-of-pocket allowances for supposedly volunteer directors.

The scandal hit NSW when it emerged that expenses claimed over six years by former state president Don Rowe included $213,000 in cash withdrawals from his RSL credit card, and $38,000 in RSL funds to cover the phone bills of five family members.

The nationwide RSL scandals have angered veterans and their families, who believe the hidebound organisation has become obsessed with pomp, pageantry and excessive out-of-pocket expenses, often at the expense of caring for the growing number of veterans recently returned from the battlefields of Iraq, Afghanistan and East Timor.

A group of younger veterans are now running in the upcoming elections for RSL NSW’s State Council, hoping to usher in a new era for Australia’s richest and most powerful veterans’ body.

One of those young veterans is Mick Bainbridge, a 33-year-old former commando who served four tours in Afghanistan and one in East Timor.

“They’ve forgotten that it’s not their money, it’s the organisation’s money and if we’re not spending that money towards our charitable purpose then we’re failing.”

Topics:

fraud-and-corporate-crime,

law-crime-and-justice,

police,

nsw,

australia

First posted

May 15, 2017 00:02:51



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