The darker and deeper side to the Holgate affair

Former CEO of Australia Post, Christine Holgate. Picture: John Feder

If you wanted to bury something from the public, you’d release it late on Friday. Even better, a Friday sliding into a long weekend when most Australians are enjoying a last summer hurrah with the kids before school starts.

That’s what the Morrison government did to bury a report into the Holgate imbroglio which found no wrongdoing by the Australia Post chief executive. In addition to the tacky timing of its release, there are other reasons the report’s gory details warrant being laid out a week later.

The report’s findings expose Scott Morrison’s willingness to play low-rent populist politics to bring an end to a person’s career to boost his own. The report also reveals a woeful board culture at Australia Post, laced with incompetence and cowardice.

Most troubling, it inadvertently lays bare some dark truths about a society that departs from the rule of law and allows those in power to apply fuzzy, unknowable and arbitrary rules for their own purposes.

The report into the purchase of four Cartier watches for senior Australian Post executives by chief executive Christine Holgate was prepared by law firm Maddocks. Its findings are as follows. The Australia Post board issued policies including a general delegation policy that allowed for matters such as “rewards and remuneration”. The board placed a financial limit of $150,000 on transactions the chief executive could make without board approval. The purchase of four Cartier watches for $20,000 did not exceed that delegated authority. John Stanhope, chairman at the time, signed thankyou cards that were presented to the recipients along with the watches to mark the completion of a project with the major banks and worth more than $70m annually to Australia Post. Maddocks found no indication of dishonesty, fraud, corruption or intentional misuse of Australia Post funds by Holgate.

The worst it said about the purchase is as follows: it was “inconsistent” with obligations imposed on Australia Post by the Public Governance, Performance and Accountability Act relating to the proper use of Australia Post funds.

Like Sherlock Holmes’s dog that did not bark, the lawyers did not say “the purchase was in breach of” any act. They did not describe it as being “prohibited by” any act. Remember this woolly word — “inconsistent” — for later.

The Prime Minister must be embarrassed by these findings. How do we know? Because, after months of pressure, he slipped it out late on a Friday before a long weekend. But few will forget his hysterical over-reaction in parliament last October when, goaded by Labor, he pulled the populist lever by publicly shaming a talented woman. Recall his words: “appalled”, disgraceful”, “shocked”, “outrage”. Morrison made no bones about trying to end Holgate’s career at Australia Post. Yet, the Prime Minister has refused to apologise to her, even after the report found no evidence of wrongdoing to warrant the Prime Minister demanding that she “go”.

We are learning more about Morrison’s character and his governing style. As Prime Minister he has rarely, if ever, shown as much passion as he did when he went hell for leather to publicly slam Holgate. No sign of any passion towards any serious and significant policy reform. Indeed, episodes such as this show why Labor’s moniker — “Scotty from Marketing” — sticks to the Prime Minister’s otherwise spotless RM boots like chewing gum.

This report doesn’t give the Prime Minister cover. It is a fig leaf so small that it exposes a pedestrian Liberal willing to destroy a person’s career to market his personal brand as a populist, rather than act as a thoughtful and sensible leader.

The lawyers who wrote this report should be embarrassed too. When they couldn’t find a substantive breach of the act, they claimed that purchase was “inconsistent” with it. Maddocks used the same misty-eyed word twice, claiming the purchase was also “inconsistent with public expectations”.

You don’t need to be eagle-eyed to ask if buying the watches was not a breach of the PGPA Act, what on earth does “inconsistent” with the act mean? And what evidence did they adduce to support their finding that the purchase was “inconsistent” with public expectations? None, except craven statements from board members trying to save themselves. So, this was an assertion based wholly on the subjective opinion of a few lawyers and self-serving board members, not a finding based on evidence.

The report is absurd for other reasons. The lawyers admit there was the general delegation covering “rewards and remuneration” but bemoan the absence of a specific policy to cover the “watches” — defined as four Cartier watches. This kind of micromanagement is insane. Demanding a specific Cartier watch reward policy is like saying Australia Post needed a Montblanc pen reward policy when the board gave the former chairman a $2095 Montblanc pen on his departure.

The report’s only value is exposing a pitiable board culture at Australia Post. The report says that “all non-executive board members interviewed accepted that the giving of the gifts in the nature of the watches was not appropriate”. Notice how willing those board members are to throw Holgate under Morrison’s politically fuelled bus.

Critically, by alluding to those board members who were “interviewed” the report implies that some declined to be interviewed. This raises obvious questions: did some directors refuse interviews because they did not want to throw Holgate under the bus? Did they decline an interview to avoid a public split of the board?

All up, the Australia Post board’s response to Holgate and the investigation appears both inadequate and cowardly. If there were no suitable policies at Australia Post to govern rewards such as watches, that is squarely a board failure. Similarly, reporting lines questioned in the report are also a board responsibility. The report also found “varying levels of understanding” among board members about their statutory obligations.

The needless trashing of Holgate’s reputation by the Prime Minister, the board and this piddling report raises bigger and deeper philosophical questions about how societies are governed. Someone, maybe Churchill, once observed that in England everything is allowed except what is forbidden, in Germany everything is forbidden except what is permitted, in France anything goes even that which is forbidden, and in the Soviet Union everything is forbidden even what is allowed.

It is a timeless reminder that applying wickedly ambiguous phrases to make arbitrary and subjective judgments is not the mark of a healthy society. The Prime Minister delegated to the mob a decision to bring down the chief executive of Australia Post. The lawyers did it too. Even if Morrison or the lawyers could point to evidence of public expectations, say a poll or a visit to an actual pub, they are substituting mob rule over the rule of law. The logical conclusion is that we may as well do away with clear, precise laws and leave it up to a mob leader to tell us what he thinks the mob would decide is wrong.

The Prime Minister’s chosen path is the antithesis of how good and just societies are governed. The rule of law means we have laws that are clear, precise and predictable rather than arbitrary and unknowable ones. But the rule of law is just an idea. Unlike a law of physics, it only survives if we pay deference to it.

Sadly, the Prime Minister and the lawyers who wrote the Holgate report are not the only ones to tarnish the rule of law. Regulators do it often. Witness how, under the Morrison government, the Australians Securities & Investments Commission has been on ill-conceived crusades to impose “fairness” tests and regulate “culture”. What on earth do these fuzzy words mean? Regulators love the imprecision: it allows them to act without clear accountability. But the cost to society is high. When clear laws are replaced with ambiguous, unknowable and arbitrary terms, we have no clue about what is right and what is wrong.

Morrison’s unrepentant attack on Holgate, and the report that followed, has far-reaching consequences beyond a clever woman leaving Australia Post. Morrison has opened the gate to a chilling political and legal environment. Why would any halfway competent person take a job where they might be publicly shamed by a prime minister who choses mob rule over the rule of law?