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Icare awards $18m in contracts to firm with extensive Liberal Party ties
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An ASX-listed marketing group with extensive links to the NSW Liberal Party was awarded millions of dollars in contracts by state-run workers' compensation insurer icare without all being put to an open tender.
Icare, overseen by NSW Treasurer Dominic Perrottet, has spent more than $18.3 million since 2015 with IVE Group, an ASX-listed marketing firm run by former NSW Liberal Party president Geoff Selig.
NSW Treasurer Dominic Perrottet said he could have chosen his words better after last month praising icare's senior management for doing a "superb job".Credit: Kate Geraghty
But in an apparent breach of state laws, the NSW government's e-tender site only discloses contracts worth just over $10 million awarded by icare to the company.
Between 2014 and 2019, IVE Group donated almost $100,000 to the NSW Liberal Party. It also donated $55,500 to the federal Liberal Party in 2018.
The Sydney Morning Herald and The Age can also reveal that the IVE Group shares a common director with icare. Gavin Bell is deputy chairman of icare, earning $100,000 a year in director fees, and $105,000 as a director of IVE.
Icare said Mr Bell had listed his membership of the IVE board on the disclosure of interest register in February 2016. “He has made the appropriate disclosures in accordance with Conflict of Interest policies and has never been involved in any procurement related to the IVE Group,” it said in a statement.
Responding to a series of questions from the Herald, icare confirmed that since 2015 it spent $18.3 million with the IVE Group, including $15.9 million by the Nominal Insurer under a Master Services Agreement and $2.4 million across icare’s other schemes.
It added that since July 2018, a key contract continued under the same arrangements on a month-by-month basis, which means it did not go to tender.
Icare lists two contracts with IVE Group on the NSW e-tender site, one for $9.5 million and another for $915,000 for work for the nominal insurer.
IVE Group provides services including mailing, merchandise production, pre-press and printing, stationery, posters and signage, business cards, digital printing, publication printing and freight.
The company declined to comment on the amount of work it had won with icare but said no work was done for icare outside the contract. “It is a master services agreement and covers all services IVE provides to icare,” it said.
Daniel Mookhey, NSW Labor shadow minister for finance, slammed the lack of tendering and described the web of connections between it, IVE Group and the Liberal Party as mind-boggling.
“Icare awarding the IVE Group $18 million of work without tendering stinks,” he said.
"No one can have any confidence in icare when it is so entwined with senior Liberal Party figures and donors."
According to the NSW Electoral Commission, Blue Star, one of the brands under the IVE umbrella, is a major printing client of the Liberal Party and did work during the 2019 election campaign.
Blue Star won more than $600,000 of work from the NSW Liberal Party, including political posters, flyers and how-to-vote pamphlets. Federally, it printed various attack flyers including the 2018 Wentworth by-election attack against independent candidate Kerryn Phelps. “Kerryn Phelps has urged voters to put the Liberal Party last,” the flyer said, despite Ms Phelps publicly saying she would direct preferences to the Liberals if elected.
IVE Group said it had been a member of the Liberal Party’s Federal Forum (FF) for a number of years and said “the speed, quality and scale that IVE can roll out communications is unmatched in this market which is why people choose to use IVE for their marketing and communications requirements.”
Links between icare and the Liberal Party came to light when the Herald reported that icare was paying for two ministerial staff in NSW Treasurer Dominic Perrottet’s office, in breach of regulations.
It resulted in the resignation of Nigel Freitas, the Treasurer’s chief of staff. His resignation came amid intense scrutiny of icare’s management and performance after a joint investigation by the Herald, The Age and ABC TV's Four Corners revealed as many as 52,000 injured workers had been underpaid by up to $80 million in compensation, and the regulator had "grave concerns" about its deteriorating financial position.
Icare chairman Michael Carapiet.Credit: Peter Braig
Others to leave include icare chief executive John Nagle and the second most senior icare executive Beth Uehling, who left on Friday. Mr Nagle quit after a parliamentary inquiry learned he had been stripped of a bonus for failing to properly declare his wife had been given an $800,000 contract with the agency and Uehling stepped down to “take up the next opportunity in her career”. Ms Uehling had not been implicated earlier in any of the issues at icare.
Mr Perrottet is responsible for selecting icare’s board, including chairman Michael Carapiet, a long-term Liberal Party donor and key member of Mr Perrottet’s business advisory group.
Other connections include icare’s general manager Kary Peterson, previously a policy director of former government minister Greg Pearce, who introduced a bill to amend the Workers' Compensation Act in 2012 to kick injured workers off weekly workers' compensation benefits after five years to create a surplus for the new icare.
Mr Perrottet was the relevant minister when claims manager EML was appointed as icare’s sole agent for managing new claims in 2018. Lobbying firm PremierState, which is run by Liberal powerbroker Michael Photios, includes EML as one of its clients. EML includes on its payroll David Begg, who is married to NSW upper house MP Natalie Ward. Begg was a former business partner of Photios.
Treasury Secretary Michael Pratt was former deputy chairman of icare, while icare’s head of board governance Audrey Abrams previously worked for Perrottet and her father, Tim, a factional lieutenant whom Perrottet thanked in his inaugural speech for his friendship, guidance and advice.
Footnote: The precise value of Mr Nagle’s wife’s contract was later reported to be $772,524.