On 26 September 1997, at the beginning of the Senate Committee hearing that prompted the Senate to start their investigation, the second appointed Telecommunications Industry Ombudsman, John Pinnock, formally addressed a Senate estimates committee, refer to page 99 COMMONWEALTH OF AUSTRALIA - Parliament of Australia and Prologue Evidence File No 22-D). He noted:
“In the process leading up to the development of the arbitration procedures – the claimants were told clearly that documents were to be made available to them under the FOI Act.
“Firstly, and perhaps most significantly, the arbitrator had no control over that process, because it was a process conducted entirely outside the ambit of the arbitration procedures.”
There is no amendment attached to any arbitration agreement, signed by the first four COT members, allowing the arbitrator to conduct those particular arbitrations entirely outside the ambit of the arbitration procedure – and neither was it stated that he would have no control over the process once we had signed those individual agreements. How can the arbitrator and TIO continue to hide under the tainted, altered confidentiality agreement (see below) when that agreement did not mention that the arbitrator would have no control over the arbitration because the process would be conducted 'entirely' outside the agreed procedures?
The Bureaucrat Corruption continued to weaken the COT Cases' resiliency.
On page 62 of Senate Hansard – Parliament of Australia, Mr. Barry O’Sullivan, who initially served as the arbitration claim advisor for Ann Garms, Graham Schorer, and me, was endorsed by the three of us based on his impressive credentials and integrity. With a distinguished career as a Detective Sergeant in the Queensland Police Force, he exemplified the qualities we valued in our advisor. In 2000, Mr. O’Sullivan transitioned into politics, becoming a National Party Senator for Queensland. During a Senate Committee session, he provided testimony under oath regarding the three of us claimants, asserting that we three claimants:
“… had expressed identical concerns about accessing their documents. They had all suffered frustration with the FOI process to that point in time. This issue remained as one of the major stumbling blocks in their signing the arbitration document itself. We spent almost two hours with Mr Peter Bartlett in a boardroom at Minter Ellison. The claimants very clearly articulated to him their serious concerns about whether they would be able to access the documents or be given sufficient documents to prepare their claim.
Mr Bartlett actually left the room and returned and reported to us that he had spoken to Dr Hughes and that he had been given an assurance by Dr Hughes that all documents requested by the claimants in the process of the preparation of their claims would be provided. All I can tell you from that date forward is that a combination of requests to the arbitrator and under freedom of information have failed in any way to allow the claimants, at least the ones that we have dealt with, to prepare their claim in a conventional manner”
An investigation conducted by the Senate Committee, appointed by the government to examine five of the twenty-one COT cases as a "litmus test," uncovered significant misconduct by Telstra. The first four COT cases, including mine, were forced into arbitration despite Dr Gordon Hughes's promise during a pre-arbitration meeting on February 17, 1994, that he would not issue any findings on these claims unless we received the arbitration-related documents we were promised. Telstra’s minutes from this meeting confirm Dr Hughes’ official statement. Nevertheless, he proceeded to issue his findings on my claim, fully aware that Telstra was still withholding my documents because I had assisted the Australian Federal Police in their investigation into the unauthorised interception of my telephone and arbitration-related documents.
I previously took the initiative to visit the union rooms of Telstra employees on my own, without any backup or support. During these visits, I discovered that some employees had engaged in dishonesty for years, siphoning off millions of dollars from government funds through various deceptive practices. These practices included "ghosting," where employees would claim to be working while not present, and filing for triple overtime on repairs to Telstra’s failing telecommunications infrastructure—issues that should have been addressed during regular working hours. Additionally, some employees exploited the system by submitting fraudulent claims for overnight accommodation expenses, even though they did not use any accommodations. This egregious behaviour allowed them to maximise their claims against the government, which owned Telstra at the time, effectively taking advantage of taxpayers' money.
The pervasive culture of corruption within Telstra has created a fertile ground for private companies to exploit both past and present mismanagement, allowing them to profit from Telstra's numerous failures. A striking illustration of this exploitation is the substantial $400 million fine levied against Telstra for its inability to complete the cable rollout for the Foxtel infrastructure. At that juncture, the Telstra Board was acutely aware that the compensation deadlines for the rollout, already burdened by rampant corrupt practices within the organisation, were utterly unrealistic. Millions of dollars had been misallocated and wasted, rendering timely completion nearly impossible. Nevertheless, in a move that starkly highlighted their disregard for both accountability and the welfare of the Australian public, they proceeded. They signed the deal, prioritising their own interests over the obligations owed to the people they serve.
I emphasise that if we accept the premise outlined in points 10 and 11 on pages 5164 and 5165 of the official Hansard records of the Senate, as published by the Parliament of Australia, which indicates that Telstra and its board were aware that the company would not meet the mandated rollout deadline, serious concerns arise. Why were the COT Cases—business owners who have struggled for years due to widespread and systemic telecommunications issues caused by Telstra—forced to bear the burden of hundreds of thousands of dollars in professional arbitration fees? These business owners sought the help of an arbitrator to ensure that Telstra would finally address the ongoing phone problems that were damaging their businesses. If this situation does not qualify as a form of severe discrimination, then what does?
10. Telstra's CEO and Board have known about this scam since 1992. They have had the time and the opportunity to change the policy and reduce the cost of labour so that cable roll-out commitments could be met and Telstra would be in good shape for the imminent share issue. Instead, they have done nothing but deceive their Minister, their appointed auditors and the owners of their stockÐ the Australian taxpayers. The result of their refusal to address the TA issue is that high labour costs were maintained and Telstra failed to meet its cable roll-out commitment to Foxtel. This will cost Telstra directly at least $400 million in compensation to News Corp and/or Foxtel and further major losses will be incurred when Telstra's stock is issued at a significantly lower price than would have been the case if Telstra had acted responsibly.
11. Telstra not only failed to act responsibly, it failed in its duty of care to its shareholders. So the real losers are the taxpayers and to an extent, the thousands of employees who will be sacked when Telstra reaches its roll-out targetÐcable past 4 million households, or 2.5 million households if it is assumed that Telstra's CEO accepts directives from the Minister.
My primary concern does not pertain to the compensation that Telstra was obligated to provide or whether they did supply the $400 million missed deadline in delivering all promised services to FOX. In several of the COT cases, Telstra made similar commitments to these Australian citizens, provided they financed their arbitrations to resolve ongoing telephone problems that were continuing to ruin their businesses.
From November 23, 1993, to May 11, 1995, I was ensnared in a web of deceit and financial drain, with my arbitration fees exceeding $300,000 in professional costs—a staggering investment into a dark abyss. Adjusted for inflation, that 1994 figure translates to a mind-numbing $622,959,207 in 2025, a testament to the unfathomable price of seeking justice. Yet, in this intricate game of power and manipulation, the arbitrator remained a silent accomplice, refusing to compel Telstra to address the persistent telephone nightmares plaguing my business. Worse still, Telstra's own records, carefully hidden during the arbitration discovery process, reveal a sinister truth. These issues have been a relentless shadow over my enterprise since before April 1988, looming large and unresolved.
The threats from rank-and-file union members subsided after I had a series of confrontations with Peter A, the Assistant Secretary of the Communications, Electrical, and Plumbing Union (CEPU). However, a more sinister presence loomed in the form of Paul Rumble, infamously known as 'The Dog.' As a senior arbitration official at Telstra, Rumble’s influence was both pervasive and intimidating. He was not alone in his machinations; Steve Black, a key figure in this tangled web, had motives shrouded in deceit that further complicated the situation.
Black orchestrated a deliberate scheme to withhold critical documents essential for the arbitration process. By strategically preventing these documents from reaching the arbitrator, he sought to manipulate the outcomes to his advantage. Instead, he restricted access to the Telecommunications Industry Ombudsman-appointed arbitration consultants. Suppose these consultants believed that certain documents needed to be reviewed by the arbitrator; they would only release them at their discretion. In that case, that is, with the approval of the consultants and not the arbitrator.
This act of betrayal came to light on August 2, 1996, when the TIO consultants confessed to concealing documents that should have been provided to the arbitrator. They fully acknowledged that the arbitration agreement clearly stipulated the protocol: the arbitrator was to receive the necessary information first, and it was ultimately the arbitrator's duty to distribute those documents to the relevant parties—not the other way around. This significant breach of protocol raised questions about the integrity of the arbitration process.
The atmosphere of intimidation fostered by 'The Dog' instilled a palpable sense of fear among those who dared to oppose him. His status and aggressive tactics created a chilling environment that discouraged dissent and questions. In response to the growing concerns about Rumble's activities, the Australian Federal Police contemplated bringing charges against him. However, Telstra allegedly intervened, shielding Rumble under the protective "Seal of the Crown," which effectively rendered investigators immune to accountability and oversight.
This troubling cycle of deceit and manipulation laid bare the deep-seated corruption within the organisation. For those entangled in this web of betrayal, the pursuit of justice felt increasingly like a distant and unattainable dream—one overshadowed by a pervasive sense of despair and distrust. The struggle for integrity in this environment was not just a matter of seeking truth; it was about reclaiming dignity in the face of overwhelming odds.
This was highlighted by the statements of six senators in the Senate in March 1999:
Eggleston, Sen Alan – Bishop, Sen Mark – Boswell, Sen Ronald – Carr, Sen Kim – Schacht, Sen Chris, Alston Sen Richard.
On 23 March 1999, the Australian Financial. Review reported on the conclusion of the Senate estimates committee hearing into why Telstra withheld so many documents from the COT cases, noting:
“A Senate working party delivered a damning report into the COT dispute. The report focused on the difficulties encountered by COT members as they sought to obtain documents from Telstra. The report found Telstra had deliberately withheld important network documents and/or provided them too late and forced members to proceed with arbitration without the necessary information,” Senator Eggleston said. “They have defied the Senate working party. Their conduct is to act as a law unto themselves.”
Regrettably, because my case had been settled three years earlier, I, along with several other COT Cases, could not take advantage of the valuable insights or recommendations from this investigation. Pursuing an appeal of my arbitration decision would have incurred significant financial costs that I could not afford, as shown in 'an injustice for the remaining 16 Australian citizens'.
Additionally, the outlandish testimony provided by the arbitrator’s wife must be scrutinised for its deliberate absurdity. She ludicrously claimed that I made a phone call to the arbitrator’s residence at 2:00 AM—six long months after he dismissed my claims concerning ongoing telephone issues. In truth, I had called him at 8:00 PM to inform him that the crucial evidence I had requested from Telstra during my arbitration in December 1994 had been withheld until the following November. Had this pivotal evidence been made available during the arbitration instead of being deliberately delayed, I could have definitively proven that the ongoing telephone issues were severely disrupting my business operations. This entire farce exudes the stench of corruption and betrayal, glaringly indicating a concerted effort to sabotage justice and subvert the rule of law. The situation raises serious concerns about the integrity of the arbitration process and the conduct of those responsible for its oversight. It exemplifies a shocking denial of justice, revealing the treachery that underpins a system designed to be impartial but has been corrupted by greed and deceit.
I have spent the last thirty years urging John Pinnock to shed light on the truth surrounding an alleged letter that I supposedly sent him in 1995. At that time, Mr. Pinnock was the Telecommunications Industry Ombudsman and became the second appointed administrator for my arbitration case. This supposed letter claimed that I admitted to calling Mr. Hughes, the arbitrator's wife, at the unearthly hour of 2:00 AM on November 29, 1995.
On 27 February 1996, John Pinnock wrote to Laurie James (see point 4 above), attacking my credibility. The TIO deliberately misinformed Mr James that I had telephoned the arbitrator’s wife at 2 am one morning:
“Mr Smith has admitted to me in writing that last year he rang Dr Hughes’ home phone number (apparently in the middle of the night, at approximately 2.00am) and spoke to Dr Hughes’ wife, impersonating a member of the Resource Unit.” (File 209 - AS-CAV Exhibit 181 to 233)
If I had indeed written to the TIO, as he suggests in his letter to Laurie James, why did he not produce my letter?
Why didn't John Pinnock come forward to the Senate to reveal his own deception regarding the false statements he made to Laurie James about my alleged phone call to the arbitrator's wife at 2:00 AM? If he had chosen to be honest, the Senate might have expanded its investigation to include me as the sixth 'litmus' test case. This investigation, which examined the intricate dynamics of the COT arbitrations, began on September 26, 1997, and continued for nearly a year and a half, concluding on March 9, 1999. The outcome of this inquiry could have significantly impacted our understanding of the challenges that my partner, Cathy, and I faced in trying to prove that our phone problems continued to affect the new owners of our business, which was sold in December 2001→ Chapter 4 The New Owners Tell Their Story
