It was the biggest political scandal of the year. Yet somehow, no one was to blame

Additional reporting by Else Kennedy, Wing Kuang and Anthony Marsico.

It was one of the most egregious cases of pork-barrelling in Australian political history. Yet after a chaotic year, sports rorts has all but slipped from memory.

This is part two of an oral history of the sports rorts affair, pieced together from first-hand interviews with key participants, contemporaneous accounts and evidence from Senate hearings.

Combined, these tell the story of how the whole sorry episode played out through the eyes of those at the centre of it all. Catch up with part one here.

The blame game

In the months after former sports minister Bridget McKenzie took the fall, we’d come to learn a lot more about the role Scott Morrison’s office played in the sports rorts affair. It soon came to light that, despite Morrison’s attempts to blame McKenzie, there’d been a flurry of emails — 136 of them to be precise — between their offices from October 2018 to April 2019.

Grant Hehir, auditor-general: “Part of the process, if you look at the audit methodology as described in the audit report, and it’s fairly standard for us, was we obtained email records which showed the process by which the assessment process was conducted as well as the decision-making, since a lot of government business is transacted through emails.”

“That included emails which were going into and out of the minister’s office, who were the key people involved in that parallel assessment process and the decision-making process. That included the emails going back and forth between the minister’s office and the prime minister’s office.”

Don Farrell, Labor sports spokesman: “The prime minister’s fingerprints are all over the sports rorts affair … it’s very clear, based on the evidence from these emails, provided by the Audit Office, that the prime minister was directly involved in the selection of the sports rorts grants. He was telling the minister that he hadn’t had a chance to look at the proposals.”

Morrison, of course, continued to blame McKenzie

Prime Minister’s Office (PMO) spokesman: “As the ANAO [Australian National Audit Office] confirmed, Senator McKenzie was the decision maker of the program.”

When evidence emerged that the government had kept sending out grants while in caretaker mode, after the election was called (in breach of caretaker conventions), McKenzie broke her silence.

Bridget McKenzie: “I did not make any changes or annotations to this brief or its attachments after April 4, 2019. My expectation was that the brief would be processed in a timely and appropriate manner. Nevertheless, changes were made and administrative errors occurred in processing the brief. I have always taken responsibility for my actions and decisions as a minister, and this includes actions by my office.”

McKenzie might have been referring to her staff. The point is, we don’t really know who made those “changes”. The senator has refused to appear before the inquiry so far. A recent vote has compelled her to show up by February next year. Perhaps then we’ll get some more answers.

Professor Geoffrey Lindell, University of Adelaide Law School: “If in fact we’re not going to hold the minister responsible, something will have to be done about the authority of the people employed in ministers’ offices. These people are assuming more and more authority — maybe it’s the result of complex government, I don’t know. But at some point or other we can’t just leave it as a vacuum. Someone has to be responsible for what happens in ministers’ offices.”

Finally there’s the role of the departments. More specifically, how exactly Sport Australia and the Health Department managed to get played like total mugs by the Morrison government. The Senate inquiry once again provides some answers illuminating in their opacity.

It wasn’t until April 2019, days before Morrison called the election, that then-Sport Australia head Kate Palmer saw McKenzie’s colour-coded spreadsheet.

Kate Palmer: “It [the spreadsheet] was literally placed down in front of me as we were standing up to walk into the Senate estimates hearing. I looked at it and then we had to proceed very quickly into the hearing.”

Sport Australia’s initial spreadsheet had not been colour-coded. After glancing at the minister’s spreadsheet, Palmer convened a late-night phone hook-up with then Australian Sports Commission chair John Wylie and then -Health Department secretary Glenys Beauchamp. We don’t know what happened in that meeting, because…

Glenys Beauchamp: “It’s my last day in the public service … I have destroyed all of my notebooks and notes … I should not have notebooks and things as a private citizen after midnight tonight.”

Labor referred Beauchamp’s conduct to the public service commissioner. We’re yet to get a ruling. In fact, Morrison announced Beachamp’s retirement on January 22 of this year, a week after the ANAO’s report dropped. Palmer left Sport Australia just days earlier.

Both were dragged back before the Senate hearing in February. But the only conclusions they offered indicated that the government had them played.

Michael Keating, former secretary of the Department of Prime Minister and Cabinet: “There’s always a balance in the APS [Australian Public Service] between independence and responsiveness, and I feel the balance has swung too far in favour of responsiveness.”

“The most important thing you do, as a department head, is create the culture. Now they do generally seem to be more responsive and eager to please. As to speculation as to why it has changed, I’d say people are fearful for their tenure.”

The butler

For all the dodginess and unanswered questions, the whole affair still hasn’t really stung the government. Put some of that down to COVID-19 — perhaps we’ve all had bigger things to consider. But Morrison also has a good fixer.

Once described as the man who could read Morrison’s mind, Phil Gaetjens’ appointment as head of the Department of Prime Minister and Cabinet always raised eyebrows, given his time as Morrison’s chief of staff. When the PM asked him to investigate McKenzie, and when he in turn produced a report that seemed to let the government off the hook, it was hard not to be cynical.

Phil Gaetjens: “I did not find evidence that the separate funding approval process conducted in the minister’s office was unduly influenced by reference to ‘marginal’ or ‘targeted’ electorates.”

Gaetjens concluded that McKenzie only breached standards over the gun club membership. Not the administration of the program, despite its “significant shortcomings”. But we can’t ever know for sure what his report found, because it has never been released.

Phil Gaetjens: “My advice to the prime minister was prepared for the consideration of the governance committee of cabinet, and remains subject to the rules of cabinet confidentiality.”

Independent Senator Rex Patrick: “The government has been atrocious in terms of openness and transparency. I also have the Gaetjens review subject to an FOI [freedom of information] request … the purpose of getting access to info is to allow people to participate in democracy. That doesn’t mean that two years later you get to see what happened and make a comment. It means being engaged as decisions are being made.”

That Gaetjens non-report looked pretty good for Morrison wasn’t lost on his opponents

Labor Senator Katy Gallagher: “Is he [Gaetjens] the head of the Australian public service? Or is he Mr Morrison’s chief servant? Is Mr Gaetjens responsible for ensuring the Australian government gets the advice it needs to make decisions … in the interests of the Australian people? Or is he Mr Morrison’s head butler, serving up cooked-up political fixes when the bell rings?”

Michael Keating, former secretary of the Department of Prime Minister and Cabinet: “I don’t think Gaetjens’ background helps. But what really doesn’t help is the fact that one, they won’t make the report public and two, it seems statistically inconsistent with the auditor-general’s evidence.”

Independent Senator Rex Patrick: “There’s no question that his [Gaetjens’] appointment in that role creates the perception of a bias, or what is referred to as an apprehended bias … it’s like a judge who has had former dealings with someone who appears before him or her. There may be a real bias, but even an apprehended bias creates a dent in the principle that justice must be done, or must be seen to be done.”

In February, non-Coalition senators forced an inquiry into the whole affair. After hours of public hearings, Gaetjens finally faced a grilling about his report.

Labor Senator Katy Gallagher (to Gaetjens): “I’d like to start at the very beginning if I can. I would just like to confirm that you spent three years as Mr Morrison’s chief of staff. Is that correct? … Is loyalty to Mr Morrison and the Liberal Party the reason your submission to this committee doesn’t address Mr Morrison’s role in the design of the scheme and the distribution of the grants?”

Phil Gaetjens: “No”

Labor Senator Katy Gallagher: “Mr Gaetjens, in response to your evidence today we’ve confirmed: you didn’t have all the evidence before you that the ANAO had; you did one interview, one phone call; you focused on outcomes, not processes; and you’ve used different metrics to the ANAO to deliver a different conclusion. Are you satisfied that your report is an honest and independent investigation into what went on with the administration of sports grants?”

Phil Gaetjens: “Yes, senator.”

12 months later

Let’s get away from Canberra and all its confusion for a minute. It’s been nearly a year since the ANAO dropped its report. The jilted clubs have not forgotten.

Kosta Patsan, president of Newcastle Olympic Football Club: “Surely the cost of running this inquiry would be getting close to what that extra funding round [for clubs] would have been.”

“As a taxpayer, as one of 25 million people, as one of the 16-odd million who pay tax, and as one of the eight-odd million that pay more tax than they earn in welfare, the net contributors in tax: I expect you to spend my money better.”

Darren Lines, president of McLaren FC: “[Club members are] filthy. They’re filthy at the federal government on the whole and the whole process. It’s been covered up. Obviously COVID has had a little to do with that but to not even get any communication following the inquiry, there’s been no communication at all. So we’ve just been left in the dark … it just stinks that the money went into the areas where the votes were needed. It wasn’t based on a needs basis.”

Ron Cole, president of Kyneton Soccer Club: “I feel bitter against the people who made the decisions. I don’t begrudge anybody getting funding for projects that they need done. There might be one or two that the sporting grant had nothing to do with, you know, grassroots sport. They’re taking that funding away from grassroots clubs that are really struggling.”

What of the other players? McKenzie is still the leader of the Nationals in the Senate. Gaetjens is still head of the public service. Morrison has never been more popular. There are other eye-watering rorts happening in NSW. Nobody seems to care much.

Rorting, these days, is benign stuff.

James Meyer, president of the Goolwa District Pony Club: “There’s a horrible culture in politics at the moment … it’s like a shock factor. Everything has to be somebody else did something wrong … it’s not ‘how do we fix the issue’, it’s ‘how do we get that soundbite on the front page that does damage to the other party’.

“It doesn’t engender trust, and that’s how you get such disinterested voters … I certainly don’t have any real belief that our federal politicians are, how do I put it, acting in the best interests of the population in general … they’re just in it to put in the time, and earn a good retirement package.”