Premier’s pivotal move: Stepanov Affair explodes right at the top of the Queensland government

Premier Annastacia Palaszczuk referred Queensland’s Integrity Commissioner for “possible action” over a low-level, two-year-old allegation of misconduct within a few weeks of the probity boss blowing the whistle on a bizarre raid on her office, it can be revealed.

​Premier Annastacia Palaszczuk referred the Integrity Commissioner for possible investigation over a two-year-old allegation of credit card misconduct and unspecified bullying in the weeks after the probity chief made explosive complaints about an unfolding political scandal.

The referral of Nikola Stepanov to a parliamentary committee came 16 days after the integrity chief met with the Premier’s director-general to raise extraordinary allegations of interference by the Public Sector Commission (PSC) involving a raid on her office and the wiping of a sensitive laptop.

The committee acts as a check and balance on Dr Stepanov, and any attempt to remove her must be signed off by its members.

EDITORIAL: OUR PREMIER CANNOT IGNORE THESE FRESH INTEGRITY CLAIMS

The Sunday Mail can reveal extraordinary new details of the laptop scandal, which allegedly involved the possible destruction of evidence relevant to legal proceedings, and the Premier’s private referral of Dr Stepanov to the Economics and Governance Committee (EGC) through accounts of closed hearings and confidential letters to that committee.

Premier Annastacia Palaszczuk referred the Integrity Commissioner for possible investigation over a two-year-old allegation of credit card misconduct and unspecified bullying. Picture: NIGEL HALLETT

They reveal:

■ Dr Stepanov had complained to the PSC about an employee working in her office, Sara Rancic, over her handling of confidential documents relating to some of the state’s most powerful people.

■ The laptop seized and wiped was Ms Rancic’s work laptop.

■ Dr Stepanov’s 2IC was stripped from her office by the PSC without notice, which she claimed compromised her ability to do her job.

■ That she broke down during a private EGC hearing while documenting PSC interference in her office, including the raid.

■ That Dr Stepanov has told the committee she has “a substantial body of objective evidence” to support her complaints.

■ The fact Ms Palaszczuk’s referral to that committee was rejected seven days later.

The referral, on April 22 last year, came just over two weeks after a meeting between Dr Stepanov and former Department of Premier and Cabinet director-general Dave Stewart in which she raised serious complaints about alleged interference by the PSC, and he agreed to commission a McGrathNicol probe.

It brings allegations of possible misconduct made to the PSC against Dr Stepanov to the committee’s attention for possible action.

They include that Dr Stepanov directed a subordinate to assume her identity and split a credit card payment to Griffith University for a research project it was supporting into two because it was above the card’s limit and that this was against the PSC’s financial management practices manual and that Dr Stepanov had behaved towards the complainant and other PSC employees in a way that “may have constituted workplace bullying”.

Queensland Integrity Commissioner Dr Nikola Stepanov. Picture: Liam Kidston

It said the PSC initially received the allegations and referred them to the Crime and Corruption Commission, which determined one was in its jurisdiction but there was insufficient evidence to support the allegation.

“As an officer of the Parliament, the QIC (Dr Stepanov) is not susceptible to public service disciplinary processes,” Ms Palaszczuk wrote.

The letter lists Robert Setter as the contact at the PSC to seek relevant materials, including the original complaints. However, the EGC can report any concerning matters involving her to the Legislative Assembly, if it decides, she wrote.

A response from the committee one week later thanked the Premier but said: “We do not see an active role for the committee in any process at this time, but we look forward to receiving any report on the outcome of any inquiries in due course.”

The Premier refused to answer questions from The Sunday Mail on the referral, including its timing, which was about a fortnight after Mr Stewart agreed to commission the probe into her complaints relating to the PSC in the aftermath of their March raid on her office.

A spokesman said she would not comment on committee matters or matters concerning the CCC.

Dr Stepanov said she had no knowledge of the allegations until they were brought to her attention by The Sunday Mail.

“I was only made aware of the content of the referral by the media on Thursday afternoon,” she said.

“Obviously these matters are part of ongoing CCC investigations and I would encourage you to direct your questions to the CCC.

“Of course the bona fides of any allegations should be fully tested. I’m very grateful to have found out what was in that referral. It’s unfortunate that I found out from the media. Nevertheless, I am very grateful.”

former Department of Premier and Cabinet director-general Dave Stewart. (Image/Josh Woning)

Dr Stepanov has previously described the timing of the referral as “of great interest, particularly in light of the fact I had raised formal concerns about conduct I was suspicious of through to the Public Service Commission in late 2020”.

“I was dissatisfied with how those concerns were handled by the PSC and I escalated the matter to the Department of Premier and Cabinet and to the then-director-general (Mr Stewart) and current director-general (Rachel Hunter),” she told The Australian.

A spokesman for the CCC declined to comment.

PSC chief executive Robert Setter also declined to comment on a range of questions including around the referral, saying it was “not appropriate to comment on matters under investigation”.

Mr Stewart, who is now Queensland’s Agent-General in Europe, said questions should go to the Department of Premier and Cabinet.

The Sunday Mail can also reveal it was concerns relating to confidential documents that prompted Dr Stepanov’s complaints to the PSC.

She was concerned over the handling of highly sensitive materials by Ms Rancic, including documents that set out the pecuniary interests and potential conflicts of interest for some of the state’s most powerful people, according to information given to the Economics and Governance Committee.

They included statutory declarations of interests of lobbyists and top public servants, declarations of interest of ministers, chief executive officers and statutory office holders, Australian Accounting Standard Board 124 forms used by shareholding ministers of government-owned corporations and other materials.

Dr Stepanov asked for a forensic probe of Ms Rancic’s laptop but was rejected by the PSC, which then confiscated and wiped the laptop.

Ms Rancic did not respond to attempts to contact her and the CCC and PSC declined to comment.

The Premier on February 3 refused to say why she referred Dr Stepanov to the committee. She said “some matters” were before the CCC and that she had “obligations to refer matters under the Act”.

The referral first became public in July 2021 when Dr Stepanov told an estimates hearing she had not been investigated by the CCC, police o​r​ the Department of Public Prosecutions in response to Opposition questioning. But Ms Palaszczuk told the same hearing there had been a “referral to a committee”, while refusing to give further details.

Opposition frontbencher Jarrod Bleijie said: “The whole thing stinks. And the only way that … Queenslanders will understand exactly what has happened is if there’s a proper inquiry. Now I’m not confident that our parliamentary system through our committee system will be able to get to the bottom of this because unfortunately what we’ve seen in our committee system of late in the last few years is most things happen behind closed doors.”