Chapter Three - Conflict of Interest

 

Bribery, corruption, misleading and deceptive conduct plagued the COT cases government-endorsed arbitrations. 

My 3 February 1994 letter to Michael Lee, Minister for Communications (see Hacking-Julian Assange File No/27-A) and a subsequent letter from Fay Holthuyzen, assistant to the minister (see Hacking-Julian Assange File No/27-B), to Telstra’s corporate secretary, show that I was concerned that my faxes were being illegally intercepted.

An internal government memo, dated 25 February 1994, confirms that the minister advised me that the Australian Federal Police (AFP) would investigate my illegal phone/fax interception allegations. (See Hacking-Julian Assange File No/28)

This internal, dated 25 February 1994, is a Government Memo confirming that the then-Minister for Communications and the Arts had written to advise that the Australian Federal Police (AFP) would investigate my allegations of illegal phone/fax interception. (AFP Evidence File No 4)

During the second interview by the Australian Federal Police (AFP) at my business on September 26, 1994, they asked me 93 questions related to the interception of my telecommunication services. This was part of their investigation into bugging issues. The transcripts from their interview can be found in Australian Federal Police Investigation File No/1

I must take the reader forward fourteen years to the following letter dated 30 July 2009. According to this letter dated 30 July 2009, from Graham Schorer (COT spokesperson) and ex-client of the arbitrator, Dr Hughes wrote to Paul Crowley, CEO of Institute of Arbitrators Mediators Australia (IAMA), attaching a statutory declaration (Burying The Evidence File 13-H) and a copy of a previous letter dated 4 August 1998 from Mr Schorer to me, detailing a phone conversation Mr Schorer had with the arbitrator (during the arbitrations in 1994) regarding lost Telstra COT related arbitration faxes. During that conversation, the arbitrator explained, in some detail, that:

"Hunt & Hunt (The company's) Australian Head Office was located in Sydney, and (the company) is a member of an international association of law firms. Due to overseas time zone differences, at close of business, [the company's] Melbourne's incoming facsimiles are night switched to automatically divert to Hunt & Hunt Sydney office where someone is always on duty. There are occasions on the opening of the Melbourne office, the person responsible for cancelling the night switching of incoming faxes from the Melbourne office to the Sydney Office, has failed to cancel the automatic diversion of incoming facsimiles." Burying The Evidence File 13-H.

The fact that Dr Hughes did not officially disclose these faxing problems between his Sydney and Melbourne offices before he was appointed an arbitrator to seven arbitrations, all coordinated collectively over a twelve-month period, where COT claimants, two in Brisbane and five in Melbourne, often complained of the arbitrator's office not responding to faxes, is hinging on criminal negligence. 

More troubling is why Graham Schorer didn't write to me during my arbitrations, which commenced on 21 April 1994 and were preminituely concluded on May 1995. Why did Mr Schorer wait more than three years after the conclusion of arbitration to alert me to Dr Hughe's admission that it was Dr Hughes's office that could have been losing my arbitration documents? 

 

No author should write only part of a story based on fact while leaving out a relevant part of the story because doing so might be detrimental to another person in the story. A full factual account of what happened during the COT arbitrations, both the good and the bad, is necessary.

So, I must raise a conflict of interest that clearly affected the outcome of the first four arbitrations. I felt it was best to leave this issue to last.

What has been decidedly the hardest decision for me to make since I began telling the COT storey is exposing the conflict-of-interest issue between Graham Schorer (Golden Messenger) and Dr Gordon Hughes. For Telstra (the defendants in those four arbitrations) to have allowed this the conflict-of-interest issue which existed before the four complainants signed the arbitration agreement in April 1994 suggests that Telstra saw an advantage to their defence by allowing it. I only uncovered this conflict-of-interest issue in 2008, after Graham Schorer asked me in August 2006 to write several reports concerning the COT story. 

Some years into my research regarding Graham Schorer's involvement in the COT arbitration’s I uncovered Dr Gordon Hughes had been assisting Graham/Golden in his Golden Messenger business enterprise as well as acting as his Federal court lawyer during the early part of Graham’s previous 1990 to 1993 court action against Telstra. These were the very same technical issues he was appointed by the TIO in 1994 to assess as arbitrator in all four COT claims against Telstra.

When I asked Graham Schorer to please explain why he had concealed this conflict-of-interest from me before arbitration as well as before commissioning me to write the COT story; he wrote the following document exhibit GS 565 file GS-CAV 459 to 489 as a compromise if I would continue with the project at hand.

It is as important to look at this conflict-of-interest issue from the perspective of the other COT claimants as it is to look at it from Graham’s perspective because, as Graham’s earlier legal advisor in both his business ventures and his Federal Court Telstra matters. Because if Dr Hughes, as Graham alleges, he did know about the concealment of important documents Graham/Golden litigation against Telstra in the Federal court from 1990 to 1992, then we three COT Cases Ann Garms, Maureen Gillan and I were entitled to have been briefed on this matter. The fact that Telstra and the Establishment got away with this during a federal court action is one thing, but for Dr Hughes and/or members of the legal firm to which Dr Hughes was a senior partner appear to have also been party to this concealment brings a massive cloud over the COT four arbitration just three years later, when Telstra concealed similar documents from all of the four COT cases during their arbitration, in which Dr Hughes was the arbitrator. 

 

Conflict of Interest - Where do you draw the line? 

Worse for the other two COT Cases and I is that Dr Hughes allowed Graham/Golden an extra three or more years longer to access their documents from Telstra, over and above what he allowed us, three COT claimants, even though the official arbitration rules did not permit this. Dr Hughes only allowed me one extra week to access my documents from Telstra shows how this conflict of interest tainted the whole arbitration process.

To add further salt to the COT Cases future wounds was that Graham Schorer, in his capacity as COT spokesperson failed to disclose to us three other COT Cases (refer exhibit GS 565 file GS-CAV 459 to 489) that we should not send arbitration related faxes to Dr Hughes’ Melbourne office after the closing of business each day; otherwise, they may not arrive at their intended destination.

 

LOST ARBITRATION FAXES   

I need to take the reader forward fourteen years to the following letter dated 30 July 2009. According to this letter dated 30 July 2009, from Graham Schorer (COT spokesperson) and ex-client of the arbitrator Dr Hughes (see Chapter 3 - Conflict of Interest) wrote to Paul Crowley CEO Institute of Arbitrators Mediators Australia (IAMA), attaching a statutory declaration (see ”Burying The Evidence File 13-H and a copy of a previous letter dated 4 August 1998 from Mr Schorer to me, detailing a phone conversation Mr Schorer had with the arbitrator early in 1994 regarding lost Telstra COT related faxes. During that conversation, the arbitrator explained, in some detail that:

“Hunt & Hunt [The company’s] Australian Head Office of was located in Sydney and [the company] is a member of an international association of law firms. Due to overseas time zone differences, at close of business, [the company’s] Melbourne’s incoming facsimiles are night switched to automatically divert to Hunt & Hunt Sydney office where someone is always on duty. There are occasions on the opening of the Melbourne office, the person responsible for cancelling the night switching of incoming faxes from the Melbourne office to the Sydney Office, has failed to cancel the automatic diversion of incoming facsimiles.”Burying The Evidence File 13-H.

The fact that Dr Hughes did not official diclose these faxing problems between his Sydney and Melbourne office prior to is hinging on criminal negligence.

It is clear from Front Page Part One File No/1, that at least six documents faxed from my office to the arbitrators office did not reach his office even though this exhibt shows Telstra charged me for these six undelivered faxes. Front Page Part One File No/1  shows the arbitrator’s secretary advised Tony Watson (of Telstra’s arbitration defence unit) that on 23 May 1994, six of my claim documents did not reach the arbitrator's fax machine. Yet, I was charged on my Telstra account for those six faxes. Why was this matter not investigated? 

NO one from the arbitrator’s office or the TIO’s office allowed me to amend my claim so that the not received claim documents could be valued as part of my arbitration process.

Why didn’t Dr Hughes (as the arbitrator to my case) explain to me as he did to Graham Schorer (refer Burying The Evidence File 13-H that my 23 May 1994 faxed claim documents might be in his Sydney office? Did Dr Hughes believe by exposing this faxing problem with his Sydney office halt the arbitration process in my favour? Was Dr Hughes worried by exposing to me the flaws in his own two offices concerning the possibility this is where my other lost faxes ended up this admission would bring an end to him remaining the arbitrator to the COT arbitrations?

Firstly, had Graham Schorer (as the COT spokesperson) disclosed to the COT Cases before, we signed our arbitration agreement, we would have been in our rights to demand Dr Hughes supply an efficient faxing system throughout our arbitrations.

Secondly, we could have used this faxing problem between Dr Hughes Melbourne and Sydney office to support any arbitration appeal in the period allowed in our arbitration agreement.

It is important to link these unaddressed lost arbitration faxes to both my case and that of Ann Garms (now deceased), because it is well written between us, lost many faxed arbitration-related documents.

Ann Garms (one of the other COT Cases) spent over $600,000.00 in her arbitration appeal in the Supreme Court of Victoria against Dr Hughes. Ann might have had a more favourable outcome of this appeal which she lost had she and her lawyers known of Dr Hughes admission to Graham Schorer before the commencement of our four arbitrations. 

It is also important that pages 14 to 31 in Graham’s manuscript are read in full because they explain Graham Schorer's basic reasons for claiming that his Telstra Flexitel matter is still unresolved, even though he did ‘blindly’ accept a deed of release from the Telstra Corporation in April 1999, thereby ‘agreeing’ that all outstanding claims against Telstra had been resolved.  Unfortunately, this meant that the arbitration agreement signed by Graham Schorer and Telstra did not allow the arbitrator to assess those Flexitel issues, because they were matters that had been partly addressed by the Mr Gordon Hughes  when he assisted Graham Schorer's previous Federal Court action against Telstra in 1990, and Graham Schorer had accepted a settlement in relation to that case.

At that time though, Graham Schorer was not aware that the Australian Government Solicitor had already found and documented how Telstra had misled and deceived him over a number of years. Could this be one of the reasons for Telstra not allowing the Flexitel issue to be reopened, even though Telstra and Graham did raise these Flexitel issue during Telstra's 1994/1996 arbitration defence of those claims. 

Pages 27 to 29 in our GS June 2013 report discusses a 2 November 1990 fax from Trevor Hill of Telstra’s Corporate Solicitors Office to Telstra’s Peter Gamble, regarding Telecom v Golden Messenger Federal Court Legal Proceedings, which notes, among other items:

 (5)   The Australian Government Solicitor, on behalf of Telecom, has written to the solicitors acting for Golden Messenger seeking their undertaking not to disclose to their client or others the contents of the report on the North Melb Exchange. To date, there has been no response. (Exhibit GS 448-A file GS-CAV 448 to 456):

Directly below this entry the report then discusses an internal Telstra minute dated 7 November 1990 that Telstra’s Peter Gamble, Manager, Business Network Planning, sent to Mr F Jones, Executive General Manager, Telecom Business Services (FOI Folio 001801), noting that:

“it would appear that any concerns over the disclosure of the adverse report on the North Melbourne Exchange can now be set to rest as it will not be released until point (5) has been complied with”. Exhibit GS 43 file GS-CAV 1 to 88

These two documents, together with the Author’s Comment (4) on pages 27 to 28 of our GS June 2013 report, show that, regardless of whether or not Graham’s solicitors, Landers & Rogers, received a copy of the North Melbourne Telephone Exchange report during Graham Schorer's early Federal Court action, Mr Schorer is adamant that HE did NOT see a copy of the letter from the Australian Government Solicitor (AGS) that is referred to in these faxes. 

CONFLICT OF INTEREST - Dr Hughes and Graham Schorer (refer to document 567 file  GS-CAV 522 to 580 ).

On 21 November 2012 Graham produced a letter of understanding that included:

“During the period that I retained Landers & Rogers, at no stage was I informed by Gordon Hughes or any other member of Landers & Rogers staff, that Telecom or the Australian Government Solicitor contacted them with information regarding the North Melbourne exchange.

“Furthermore, had I known that Gordon Hughes had concealed knowledge of such an important document from me, I would not have accepted his appointment as the arbitrator in my arbitration process” (refer to document 567 file  GS-CAV 522 to 580 ).

This AGS letter is important because when Dr Gordon Hughes was appointed as the official arbitrator to the COT arbitrations, he did not declare his conflict of interest regarding Graham Schorer's previous Federal Court action against Telstra.

It is as important to look at this conflict of interest issue from the perspective of the other COT claimants as it is to look at it from Graham Schorer's perspective because, as Graham Schorer's earlier legal advisor in both his business endeavours and his Federal Court / Telstra matters, Dr Hughes knew about the various discovery documents that Landers & Rogers did receive from the AGS after 24 July 1990, just as he knew about the incorrectly installed, faulty Flexitel telephone equipment at Graham’s business premises. 

Dr Hughes may possibly have thought he was helping Graham Schorer when he allowed an extra two (and, in one case, three) years for Graham to prepare his submission to arbitration, over and above what he allowed the other COT claimants, even though this extra time was not permitted in the official arbitration rules. In other words, it appears as though Dr Hughes actually allowed his own integrity to be compromised, which therefore left him a sitting duck, so to speak, because Telstra may well have then used this conflict of interest to their own advantage so that in the end, Dr Hughes lost control not just over Grahams’ arbitration but overall the other COT arbitrations as well.

John Pinnock (TIO) later confirmed, however, in his address to a Senate Estimates Committee on 26 September 1997 exhibit GS 490 file GS-CAV 490 to 521, that this was certainly NOT the case, noting:

“Firstly, and perhaps most significantly, the arbitrator had no control over the process, because it was a process conducted entirely outside of the ambit of the arbitration proceedings”.

The questions arising out of this official statement are:

• Did Dr Hughes lose control over the arbitrations – he was conducting (seven at least) because Telstra knew he had never declared his conflict of interest?
• Did the secret use of Ferrier Hodgson Corporate Advisory as the secondary arbitrator for Graham’s arbitration contribute to Dr Hughes losing control over the process?
• Could it be that when the TIO (the administrator of the arbitration process) became aware that Dr Hughes had lost control over the process, then the TIO had a duty of care to immediately request leave from the Supreme Court to appoint a new arbitrator?

Could it be that one of the reasons Telstra accepted Dr Hughes’ previous association with Graham’s Telstra Federal Court action without raising it as a problem in relation to his appointment as COT arbitrator was that they knew that this AGS letter had never surfaced after it was first sent to Landers & Rogers, and so they, therefore, knew it had to have been deliberately concealed from Graham during his Federal Court proceedings?

Directly below this entry the report then discusses an internal Telstra minute dated 7 November 1990 that Telstra’s Peter Gamble, Manager, Business Network Planning, sent to Mr F Jones, Executive General Manager, Telecom Business Services (FOI Folio 001801), noting that:

“it would appear that any concerns over the disclosure of the adverse report on the North Melbourne Exchange can now be set to rest as it will not be released until point (5) has been complied with”. (Exhibit GS 43 file GS-CAV 1 to 88)

These two documents, together with the Author’s Comment below, show that, regardless of whether or not Graham’s solicitors, Landers & Rogers, received a copy of the North Melbourne Telephone Exchange report during Graham’s early Federal Court action, Graham is adamant that HE did NOT see a copy of the letter from the Australian Government Solicitor (AGS) that is referred to in these faxes.

This AGS letter is important because, when Dr Gordon Hughes was appointed as the official arbitrator to the COT arbitrations, he did not declare his conflict of interest in relation to Graham’s previous Federal Court action against Telstra.

It is as important to look at this conflict of interest issue from the perspective of the other COT claimants as it is to look at it from Graham’s perspective because, as Graham’s earlier legal advisor in both his business endeavours and his Federal Court / Telstra matters, Dr Hughes knew about the various discovery documents that Landers & Rogers did receive from the AGS after 24 July 1990, just as he knew about the incorrectly installed, faulty Flexitel telephone equipment at Graham’s business premises.

Graham and I have remained very close friends since we met in 1992. When I uncovered this situation and asked him why he did not reveal this conflict of interest issue, he wrote a statement, which I later provided to the Institute of Arbitrators Mediators Australia at the request of Graham. The reason is the possibility that Gordon Hughes never provided Graham with the North Melbourne Exchange AGS. At the same time, he was Graham’s Federal Court advisor, which may be why Telstra allowed this conflict of issues to be disclosed. The fact that Dr Hughes had also concealed his knowledge from the four COT Cases it was Telstra’s arbitration agreement that was being used in the arbitration and NOT an arbitration agreement (Rules) that had been drafted independently might have also been the reason Telstra closed their eyes to Dr Hughes’ conflict of interest issues associated with Graham’s previous Telstra related Federal Court issues that we’re addressing the same issues less than four years later.

There is also another side to this conflict of interest issue. If Mr Schorer is telling the truth that he knew nothing about this government solicitors letter or that his legal team, which included Dr Hughes, had been threatened that Telstra would not supply any further discovery documents unless Graham’s lawyers agreed to certain conditions, then Dr Hughes should have surely acted differently to which he did when Telstra threatened me over similar withheld document issues (see page 180 Senate Evidence File No 31) dated  29 November 1994, which notes:

“Why did Telecom advise the Commonwealth Ombudsman that Telecom withheld FOI documents from Alan Smith because Alan Smith provided Telecom FOI documents to the Australian Federal Police during their investigation?”

After receiving a hollow response from Telstra, which the senator, the AFP and I all knew was utterly false, the senator states:

“…Why would Telecom withhold vital documents from the AFP? Also, why would Telecom penalise COT members for providing documents to the AFP which substantiate that Telecom had conducted unauthorised interceptions of COT members’ communications and subsequently dealt in the intercepted information by providing that information to Telecom’s external legal advisers and others?” (See Senate Evidence File No 31)

The rule of law cannot be brushed aside nor covered up with the excuse that a failed arbitration process is collateral damage. The law is there to protect us all. All sixteen COT Cases and the five litmus test cases should have been treated the same by the Senate working party and the government who commissioned them to investigate Telstra’s reluctance to provide discovery under the agreed FOI process.

These issues of Dr Hughes’ previously being both Mr Schorer’s business advisor and his adviser during Mr Schorer’s Telstra Federal Court stoush in 1990 to 1992 should have been addressed by the government when they endorsed our arbitrations. A written order for Dr Hughes to proceed as the government should have sought the COT arbitrator. It was not. Had I been aware that Dr Hughes had known Graham Schorer professionally the way he clearly did I would have opposed Dr Hughes’ appointment as arbitrator.

It is clear from Telstra FOI folio C04550 (seeGS-Conflict of interest 1-to 5) that the Australian Government Solicitor was writing to Graham Schorer’s legal team during his previous Telstra Federal Court Action between 1990 and 1992.  Our conflict of interest page GS-Conflict of interest 1-to 5 confirms Mr Gordon Hughes and Michael Champion from Landers & Rogers (Mr Schorer’s solicitors) jointly received a letter from Mr Michael Shand Barrister confirming that Dr Gordon Hughes was heavily involved in Mr Schorer’s Telstra Federal Court action prior to him accepting his role as the COT cases Assessor land then later their arbitrator.

It was decidedly alarming to be presented with threats like this part-way through a Federal Court action and to say that Graham Schorer was completely devastated is an understatement, but to also discover that an important letter that included vital information regarding this North Melbourne Exchange issue had been withheld from him by his own legal team during this Court action was absolutely shattering.

This Senate Hansard, dated June 1997 (see page 5163, SENATE official Hansard – Parliament of Australia, shows Telstra employees rorted millions upon millions of dollars from Telstra shareholders, i.e., the government and Australian citizens, who then owned Telstra.

It is interesting to note here the connection to both the way various Telstra employees rorted millions upon millions of dollars from the public purse and how the New South Wales police were investigating this very serious matter because Dr Hughes, the COT arbitrator, was a partner of the same law firm that helped some of the Telstra employees in New South Wales in relation to a number of different legal matters. When the COTs signed their arbitration agreements, however, no one ever revealed, on any level, Dr Hughes’ prior direct connections to Telstra, and, as our story shows, this is not the only conflict of interest issue that plagued the COT arbitrations. While this particular conflict of interest issues might a strong argument that Dr Hughes should have alerted us COT Cases to this Telstra conflict issue, it is important we raise this issue here because it is another example where many of the COT Cases were not treated as equals by those who were soon to conduct our arbitrations. Just like the 16 remaining COT Cases, which the senate and government conveniently forgot to include in the Senate working party FOI investigations. assessment process.

Dr Hughes must have known by allowing an extra three years for Graham to prepare his submission to arbitration as well as answer Telstra's defence, over and above what he allowed the other three COT claimants was discrimination against us three claimants.

This extra time was not permitted in the official arbitration agreement ]SENATE official Hansard – Parliament of Australiathe rules]SENATE official Hansard – Parliament of Australia all four claimants signed in April 1994. In other words, it is clear beyond all doubt that Dr Hughes actually allowed his own integrity to be compromised, which therefore left him a sitting duck, so to speak, because Telstra may well have then used this conflict of interest to their own advantage so that, in the end, Dr Hughes lost control not just over Grahams’ arbitration but overall the other COT arbitrations as well.

As shown throughout this website the TIO (also the administrator of the arbitrations) later confirmed, in his address to a Senate Estimates Committee on 26 September 1997 that:

“Firstly, and perhaps most significantly, the arbitrator had no control over the process, because it was a process conducted entirely outside of the ambit of the arbitration proceedings”.

The questions arising out of this official statement are:    

• Did the arbitrator lose control over the arbitrations he conducted (seven at least) because Telstra knew he had never declared his conflict of interest?
• Did the secret use of the TI-appointed arbitration resource unit as the secondary arbitrator for both Graham’s arbitration and the other three arbitrations contribute to the arbitrator losing control over the process?
• Could it be that when the TIO (the administrator of the arbitration process) became aware that the arbitrator had lost control over the process, the TIO had a duty of care to immediately request leave from the Supreme Court to appoint a new arbitrator for all four arbitrations?

Could it be that one of the reasons that Telstra accepted this particular arbitrator’s previous association with Graham’s Telstra Federal Court action without raising it as a problem in relation to his appointment as COT arbitrator was because they knew that this Australian Government Solicitors AGS letter had never surfaced after it was first sent to the now pending arbitrator and/or the legal firm to which he was a partner? In simple terms, this most crucial letter from the Australian Government Solicitor’s Office may have changed the outcome of Mr Schorer’s Federal Court action and his later arbitration.

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