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Chapter 4 Deception in the public service

Absent Justice - Injustice Again

For an arbitrator to have a conflict of interest, taking or allowing the defence to use threats that were later carried out which then allowed fraud, and forgery, to creep into the arbitration process is more than just a breach of trust, it was unconsionable.

This letter, dated 20 January 1994, from Ms Philippa Smith, Commonwealth Ombudsman to Telstra’s corporate secretary Jim Holmes, notes:

“I received complaints from three of the ‘COT Cases,’ Mr Graham Schorer, Mr Alan Smith and Ms Ann Garms, concerning TELECOM’s handling of their applications under the Freedom of Information Act (FOI Act) of 24 November 1993 and 21 December 1993 respectively. …

“All three assert that they require the information to support their submissions to the imminent review in accordance with the Fast Track Settlement Proposal (FTSP) agreed between TELECOM and AUSTEL, and endorsed by the then relevant Minister.” (Home Page – Part One File No/2-A to 2-E)

On 25 March 1994, Ms Philippa Smith wrote to Telstra’s CEO Frank Blount, stating:

“It was unreasonable for Telecom to require the participants to make further assurances while Telecom was considering the Agreement and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.” (Home Page – Part One File No/2-B)

Again, on 6 May 1994, Ms Philippa Smith wrote to Telstra’s CEO, Frank Blount, stating:

“I should be grateful if you would now respond to the outstanding matters raised in my letter of 25 March 1994 ie

  1. Comment on my views that:
  • it was unreasonable for Telecom to impose a condition for release of certain documents that the participants make further assurances that they will participate in the FTSP; and
  • it was unreasonable for Telecom to require the participants to make the assurances while Telecom was considering the agreement related to the FTSP (the Agreement) and thereby denying the participants the opportunity to consider the rules that Telecom wished to have included in the Agreement.” (Home Page – Part One File No/2-C)

Regardless of the government and the relevant minister endorsing COT arbitrations, as confirmed by Ms Philippa Smith, in her 20 January 1994 letter, and regardless of both the TIO and the government being aware the arbitrator had no control over the arbitrations (see Arbitrator File No/71), the government only assisted five of the 21 COT cases to resolve their long outstanding claims. (See the An Injustice to the Remaining 16 page, in the menu bar).


Ambit of the Victorian Commercial Arbitration Act 1984

While the ambit of the Victorian Commercial Arbitration Act 1984 issue appears on the Senate Page / File No/71, it is important to raise it here too, in our Home Page Part One.

On 24 January 1994, this letter to Dr Hughes (arbitrator) from Frank Shelton, the TIO special counsel, provides further proof the first four arbitrations were to be conducted according to the “ambit of the Commercial Arbitration Act 1984”. Frank Shelton was also the president of the Institute of Arbitrators Australia when he advised the arbitrator:

“We discussed whether or not the Procedure should come within the ambit of the Victorian Commercial Arbitration Act 1984. We decided that it should.”

On page two, he adds:

“On balance, it was decided that it would be preferable to have the Procedure operating under the ambit of the Commercial Arbitration Act.

“You will note that I have amended the Procedure so that it is clear that you are conducting four separate arbitrations and will hand down four separate awards although you may combine some aspects of the four hearings.” (See Arbitrator File No/105)

The arbitrator failed to make any reference in my final award to my arbitration procedure being conducted entirely outside of the agreed ambit of the Commercial Arbitration Act 1984. He did not warn me, before I signed the arbitration agreement, that my arbitration would be conducted in this manner.

For the arbitrator and the TIO to allow our arbitrations to continue, after discovering that they were being conducted outside the agreed and accepted ambit of the Victorian (Australia) Commercial Arbitration Act, was corrupt.

With iniquity, this decision has stood without investigation for 18 years despite the TIO confirming, to both a Senate estimates committee hearing and the communications minister’s office, on 26 September 1997, that the arbitrator had no any control over the process because it was “conducted entirely outside the ambit of the arbitration procedures”. (See Arbitrator File No/71)

The arbitrator, after conducting our arbitrations in such an unethical manner, wrote to the TIO on 12 May 1995 and declared the COT arbitration agreement was not a credible document for the basis for my arbitration (see Open Letter File No 55-A). This letter, condemning the agreement, was also deliberately concealed from me during my designated appeal period. Neither the arbitrator nor the TIO (the administrator) ever gave me an amended document during my arbitration.

The confidentiality clauses in my arbitration agreement, which appear to have been used since 22 June 1995 to stop a transparent investigation into the conduct of my arbitration, became null and void as soon as the arbitrator conducted my arbitration entirely outside the agreed ambit of the Victorian Commercial Arbitration Act 1984.

On 17 February 1994, during this official arbitration meeting, Graham Schorer (COT spokesperson) asked Dr Hughes to assure us that the agreement the COT claimants were being pressured to sign was not Telstra’s proposed rules of arbitration. Telstra’s own transcripts of this meeting (see Arbitrator File No/103) confirm both the arbitrator and the TIO’s special counsel stated, “they had not received this document and had not read it and that it was irrelevant”. 

However, Arbitrator File No/104 confirms the arbitrator was provided with a document called “Telstra Corporation Limited – ‘Fast Track’ Proposed Rules of Arbitration” before 18 January 1994, one month before this meeting.

In fact, Arbitrator File No/105, dated 24 January 1994, confirms both the arbitrator and a representative of the TIO’s special counsel read Telstra’s proposed rules. And they actually used that document as the basis for the final arbitration agreement: the version presented to the first four COTs for signing the very next month. This was the version that we were assured had been drafted totally independently. During the first official arbitration meeting, before the COTs had signed their arbitration agreements and even before he was officially appointed, the arbitrator was already misleading and deceiving the claimants, and all other interested parties.

This deception, regarding which version of the agreement we signed, was maintained throughout the various COT arbitrations. This agreement was NOT independently drafted by the special counsel, but by Telstra – the defendants.

This letter, dated 23 February 1994, from Telstra’s arbitration liaison officer, to the pending arbitrator notes:

Telecom is of the view that Special Counsel and the Resource Unit should be accountable for any negligence on their part in relation to the arbitration process, given that these parties are acting in their capacity as experts. Therefore, this clause should not be amended so as to include an exclusion from liability for Special Counsel and the Resource Unit.” (See Arbitrator File No/3)

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How can one publish a true account of what happened during various Australian Government-endorsed arbitrations without attaching exhibits to support the facts, as we have been forced to do due to the rampant corruption within the government bureaucracy? How can the author prove that government public servants fed privileged information to the then Australian Government-owned telecommunications carrier (the defendants) but also concealed the same documentation from the claimants, their fellow Australian citizens?

Additionally, how can one tell a story so unbelievable that even the author doubts the authenticity of what they are writing until they check their records before continuing with the story? How can one expose collusion between an arbitrator, various appointed government watchdogs (umpire), and the defendants? How can one also expose that the defendants in an arbitration process (the once government-owned telecommunications carrier) used equipment connected to their network to screen faxed material leaving your office? 

Moreover, how can one expose that the defendant's advisors stored the screened material without the author's knowledge or consent before redirecting it to its intended destination, where, in some cases, the more relevant information was never forwarded? The defendants (the Telstra Corporation) were using this screened material to benefit their arbitration defence to the detriment of the claimants.

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“…your persistence to bring about improvements to Telecom’s country services. I regret that it was at such a high personal cost.”

Hon David Hawker

“I am writing in reference to your article in last Friday’s Herald-Sun (2nd April 1993) about phone difficulties experienced by businesses.

I wish to confirm that I have had problems trying to contact Cape Bridgewater Holiday Camp over the past 2 years.

I also experienced problems while trying to organise our family camp for September this year. On numerous occasions I have rung from both this business number 053 424 675 and also my home number and received no response – a dead line.

I rang around the end of February (1993) and twice was subjected to a piercing noise similar to a fax. I reported this incident to Telstra who got the same noise when testing.”

Cathy Lindsey

“…your persistence to bring about improvements to Telecom’s country services. I regret that it was at such a high personal cost.”

The Hon David Hawker MP

“Only I know from personal experience that your story is true, otherwise I would find it difficult to believe. I was amazed and impressed with the thorough, detailed work you have done in your efforts to find justice”

Sister Burke

“…the very large number of persons that had been forced into an arbitration process and have been obliged to settle as a result of the sheer weight that Telstra has brought to bear on them as a consequence where they have faced financial ruin if they did not settle…”

Senator Carr

“A number of people seem to be experiencing some or all of the problems which you have outlined to me. …

“I trust that your meeting tomorrow with Senators Alston and Boswell is a profitable one.”

Hon David Hawker MP

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