Chapter 2 Corruption in the making

On 30 November 1993, this Telstra internal memo FOI document folio D01248, from Ted Benjamin, Telstra’s Group Manager – Customer Affairs and TIO Council Member writes to Ian Campbell, Customer Projects Executive Office. Subject: TIO AND COT. This was written seven days after Alan had signed the TIO-administered Fast Track Settlement Proposal (FTSP). In this memo, Mr Benjamin states:

“At today’s Council Meeting the TIO reported on his involvement with the COT settlement processes. It was agreed that any financial contributions made by Telecom to the Cot arbitration process was not a matter for Council but was a private matter between Telecom, AUSTEL and the TIO.

I hope you agree with this.”

This shows that Telstra was partly or wholly funding the arbitration process.

If the process had been truly transparent then the claimants would have been provided with information regarding the funds – specifically, the amounts provided to the arbitrator, arbitrators resource unit, TIO and TIO special counsel for their individual professional advice throughout four COT arbitrations.

It is still not known how the arbitrator billed Telstra for his professional fees or how the TIO billed Telstra for his fees, and those of the TIO-appointed resource unit and special counsel. This raises the questions:

• Was the arbitrator and resource unit paid on a monthly basis?
• Did the resource unit receive any extra bonus for being secretly appointed as the second arbitrator in determining what arbitration documents the arbitrator was allowed to receive and what was withheld (see letter dated 11th July 1994, from Telstra to Warwick Smith)?

Without knowing how these payments were distributed by the defendants to the parties involved in the first four arbitrations, it would be impossible for the TIO and AUSTEL (now the ACMA) to continue to state that the COT arbitrations were independently administered.

To summarise the issue: during these four arbitrations, the defence was allowed to pay the arbitrator and those involved in the process. How is this different to the defendant in a criminal matter being allowed to pay the judge? It is a clear and concerning conflict of interest.

Senator Richard Alston (Shadow Minister for Communications) discussed the Problem 1 document on 25 February 1994 during a Senate Estimates hearing. Another previously unseen document, dated 24 July 1992 and provided to Senator Richard Alston in August 1993, includes my phone number and refers to my complaint that people ringing me get an RVA “service disconnected” message. Yet another document, dated 27 July 1992, discusses problems experienced by potential clients who tried to contact me from Station Pier in Melbourne. (See Arbitrator File No 60).

Some of these hand-written records go back to October 1991, and many of them were fault complaints that I had not recorded myself. Telstra, however, has never explained who authorised the withholding of these names (those who had complained to Telstra) from me. If I had known who had been unable to contact me, I could have contacted them with an alternate contact number for future reference. Has the withholding of these names and the unavailability of my past historic fault documents related to the Jim Holmes issues mentioned below i.e. (see documents A01554, A06507 and A06508  - TIO Evidence File No 7-A to 7-C)?

On 27 August 1993, Jim Holmes, Telstra’s corporate secretary (also TIO Board Member) wrote to me about the same ‘briefcase’ documents, noting:

“Although there is nothing in these documents to cause Telecom any concern in respect of your case, the documents remain Telecom’s property and therefore are confidential to us.”

Later in the letter:

“I would also ask that you do not make this material available to anyone else.”(See Open Letter File No/2)

Telstra’s FOI document dated 23 August 1993 and labelled as ‘folio R09830’ with the subject listed as ‘The Briefcase’ is alarming to say the least. This document, which had been copied to Jim Holmes, notes:

“Subsequently it was realised that the other papers could be significant and these were faxed to (name deleted)but appear not to have been supplied to Austel at this point.

“The loose papers on retrofit could be sensitive and copies of all papers have been sent to.”(Arbitrator File No 62)

Jim Holmes continues 

Telstra’s corporate secretary Jim Holmes was advised in three emails (A01554, A06507 and A06508) that the Leopard Fault data – Telstra’s technical data regarding exchange faults – was destroyed after 12 months. Mr Holmes was a member of the TIO board when the first four COT claimants, Gillan, Garms, Schorer and I, signed our arbitration agreements, but it seems Mr Holmes did not warn the government (which, after all, endorsed the arbitration agreements) or the TIO, who administered the arbitrations, that claimants would not be able to support their claims effectively because Telstra destroyed all historical data, at least from 1992 on. Have Telstra and The Hon Richard Alston and his fellow coalition government ministers ever considered what followed, after Telstra kept this serious matter secret? Have Telstra and the Australian government ever considered the financial cost to each claimant as we tried to access information Telstra knew was destroyed years before we went into arbitration? Each COT case accumulated costs that ran into hundreds of thousands of dollars while trying to access this non-existent fault data (and other Telstra data) to support our arbitration claims. Has the Senate ever considered the cost – not just in dollars – of the 18 months many senators spent from 1997 to 1999 assisting the COT cases in attempting to access technical documents that Telstra knew were destroyed years before? Telstra’s corporate secretary Jim Holmes knew this, as emails A01554, A06507 and A06508 show (see TIO Evidence File No 7-A to 7-C) , and he signed all four FTSP agreements for the four COT cases on 18 November 1993, while he was a TIO board member attending monthly board meetings where COT cases’ arbitration issues were discussed. Yet he never advised the TIO of what he knew concerning the destroyed documents we were trying to access. This situation is an example of why the COT arbitrations were such a mockery of the Australian legal system.

When Jim Holmes did not ensure the TIO board was notified that the COT cases may have problems trying to prove their historic phone complaints because Telstra had destroyed that data, he was partly responsible for the COT cases racking up thousands of dollars in wasted arbitration fees, including paying technical consultants for advice on what historic data was needed to support various claims, when that data no longer existed.

Mr Holmes did not advise the TIO (the administrator of the COT arbitrations) that the arbitration agreement the claimants were signing should be revised because there was no historic fault data.

Further, the Commonwealth Ombudsman, Ms Phillipa Smith, and her director of investigations, John Wynack, were not told about this destroyed data when they commenced their investigation into the four COT cases’ FOI issues in January 1994. They were still investigating these FOI issues in January 1999: FIVE years wasted in searching for documents that were destroyed years before. The extent of the costs involved, as a direct result of Telstra concealing this destruction of documents, is phenomenal.

In 2006, when Trevor Hill was the Chairman of the TIO Board, and after he had received all three of these emails, if he had just notified the Government then, about the problems that Telstra’s destruction of all historic fault data had created for the COTs, there may have been a very different outcome to Senators Joyce and Coonan’s March 2006 Government evaluation of whether there was merit in the COT claims against Telstra. If nothing else, at least the Government bureaucrats would then have known that the allegations made by the COT Cases in relation to their FOI problems did have merit and some of those fourteen COT Cases might have been reopened by the Department of Communications, Information Technology and the Arts (DCITA).

When the truth about a particular citizen is deliberately hidden, that often results in exactly the sort of situation that occurred, not just during the COT arbitrations in 1994 and 1995, but which festered on for another eleven years and which brought to a complete halt any proper assessment of my DCITA March/April 2006 claim that the Hon David Hawker MP, Speaker of the House of Representatives, helped me to present to Senator Coonan, a claim that clearly advised the DCITA assessors that I had experienced serious FOI problems that disrupted my 1994/95 arbitration.

Jim Holmes, Chris Vonwiller and Ted Benjamin

If any party reading today’s affirmation researches Chris Vonwiller, they will uncover that at the time of this document he was under investigation by various senators for misleading the Senate concerning two COT cases and the telephone exchange their businesses were connected to. It has now established that Mr Vonwiller did mislead the government in this regard.

Both Jim Holmes and Chris Vonwiller were on the TIO board at that time with Jim Holmes regularly attended TIO monthly meetings through to at least June 1994, when COT arbitration matters were discussed.

The Senate Hansard of 26 September 1997 shows Telstra’s Ted Benjamin, a member of the TIO council, agreed with the second TIO, John Pinnock, that COT arbitration matters were discussed at TIO council meetings. The Senate slammed this conduct of the TIO allowing the defendants (Telstra) to be present during these meetings when no COT members were present, as possibly the most undemocratic situation for any ombudsman to have allowed.

Further, this affirmation shows Ted Benjamin waited a full 12 months before releasing to me, on 23 May 1995, my original FOI request of May 1994. I presume he gained knowledge that Dr Hughes would bring down my award on 11 May 1995 through his attendance at these TIO council meetings, and therefore waited until after the 11 May 1995, before releasing the most explosive three documents of the whole arbitration process.

Three documents, N00005, N00006 and N000037 (which were part of the late-released FOI documents) are discussed on page six of my BCI report on this matter (see Telstra's Falsified BCI ReportArbitrator File No/70 A, FOI folio D01248)

How can the Australian government disregard that Warwick Smith crossed the floor, by discussing government-privileged information with Telstra and then allowing three of its executives to be present at the monthly TIO council and board meetings? This placed all of the COT case arbitration processes into disrepute.

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