MEMBERS of the Bob Bentley Board have issued a statement responding to the findings of the Commission of Inquiry into racing during their years of running the industry in Queensland.

We have decided to run this response in full as sections of the mainstream racing media, that were keen to bag the Bentley Board, don't seem interested. It is only fair that all sections of the industry are given their say and right of reply. 

The Bentley Board response reads:

THE Queensland Attorney-General’s description of Racing Queensland (RQL) in the period up to the April 2012 as “the dark days of racing” displays an unbalanced reading of the Commission’s report that was released on 7 February 2014.

While there are some matters that may be the subject of further investigation, there are many other matters that any fair-minded reader would be interested to know. As the Racing Minister said on 15 May 2013, “This inquiry is about cleaning up the ghosts of the past and being honest with the people of Queensland”. Well, being honest requires credit to be given when due.

Management of RQL

The Commission in its report said, “It is uncontroversial that the racing industry is riven with gossip, rumor, speculation and innuendo. It is unsurprising then that the Commission received allegations that officers of RQL acted without integrity. The majority of those allegations were vague, unsupported by evidence or were little more than repetition of rumor. Nonetheless, the Commission considered all such allegations on their merits and, unless commented on in this Report, found them to be baseless.” (Page 136)

Far from being a shambles, the Commission concluded, as a result of its investigations, that “the corporate governance arrangements of RQL appeared to be generally sound in as much as board meeting papers and minutes were prepared and circulated in a timely manner, board discussions appeared to be open and robust, and committee and reporting structures were established and functional.” (Page 14 of the report).

Further, the Commission report stated, “It must be observed at the outset that the Commission’s inquiries support a conclusion that throughout the relevant period the relevant entities, including QRL and RQL, conducted the majority of their control body-related management functions competently.

As explained below, as at amalgamation on 1 July 2010 RQL had nearly 150 officers and employees performing a variety of roles in different departments. The management and other difficulties that have arisen for the Commission’s consideration are largely systemic rather than attributable to individual failings.” (Page 83)

Application of industry funds

Much of the background for calling the Commission of Inquiry was the wild accusations about millions and millions of dollars being spent by RQL on certain projects. In the aftermath of the Commission’s report, almost nothing has been said of how these wild accusations have proved to be without foundation.

The Commission has said in its report that “… it should be made clear at the outset that the Commission has not identified any basis to find that Contour, Mr (Malcolm) Tuttle or Mr (Paul) Brennan engaged in sharp practice or did anything dishonest or corrupt in relation to the engagement of Contour, or (although this is strictly outside the Terms of Reference) Contour’s employment of the two individuals. There is also no basis for a positive finding that any of the projects in which Contour was involved did not deliver value for money …” (Page 29)

The Commission also said that “… the observation made in the opening address of counsel assisting on 19 September 2013 should now be repeated: The allegations made in the press and elsewhere, to the effect that Contour was awarded either $150 million or $200 million worth of contracts, are greatly exaggerated.” (Page 29)

Given the venomous attack that has been made on former board members and executives, both in the media and under the protection of Parliament, fair-minded industry participants should now be aware that, in the words of the Commission, “…although the Commission has investigated aspects of contract management, payment policies and financial accountability in some detail whilst focusing on procurement, there has been no credible allegation of fraud, corruption or serious financial irregularities and the Commission has not identified any evidence of such matters in all of the documents it has reviewed.” (Page 67)

Further, “The Commission has had the benefit of assessing infrastructure project documentation with the aid of Contour’s files. It has not identified any reason, in light of the documents reviewed or any statements provided, to believe that the gaps in QRL/RQL’s records are reflective of anything approaching corruption or any intention to avoid creation of a comprehensive record.” (Page 73)

The above findings could hardly be considered a ringing endorsement of the wild accusations made against the former board members and executives.

Broader issues raised in Commission

It seems that when the motivating allegations that caused the Inquiry to be called were disintegrating, attention was turned to any other mud that could be thrown.

The issue of the termination payments that were made to the four senior employees who left RQL after the last state election may receive further scrutiny. Suffice to say, there are complex legal issues involved in that matter and the former board members and senior executives strongly refute any wrongdoing.

There was criticism of the Board in relation to its handling of making changes to executive service contracts, notwithstanding that the changes in 2011 were made after receipt of legal advice at all times, and that the respective executives had assumed extra duties to manage an additional two codes of racing in 2010 on the understanding that their salaries would be reviewed in 2011.

Tatts

Another issue that received a lot of attention during the Inquiry was whether the board of Queensland Product Co Ltd (Product Co) acted appropriately in considering whether to challenge Tatts on the amount of race fields’ fees that it was offsetting from funds otherwise payable to Product Co.

Former board members are criticized for not taking action based on advice given by an experienced commercial lawyer in 2008 that suggested that Tatts would not be entitled to deduct race fields’ fees that it had to pay interstate. However, there was an experienced commercial lawyer on the board of Product Co who held a contrary view, and there are other legal opinions in existence that are also to the contrary.

Even if the argument that Tatts was not entitled to deduct the interstate fees it was obliged to pay, there was the further issue that if Product Co collected race fields’ fees from interstate or other sources, then Tatts could claim those moneys for itself under the terms of the existing industry agreement, thereby making Product Co and the three codes of racing far worse off. That was the subject of the communications with Tatts in November 2008. The Commission dismissed the entire issue by saying that “the view that race fields legislation in Queensland negated the impact of interstate race fields legislation is without foundation and the evidence does not support the assertion that any such agreement was reached.” (Page 347)

The fact is, and history shows, that even if a contract in the formal sense was not entered into, agreement was reached, and the parties acted in accordance with the accord that had been reached, and therefore would be just as enforceable as Tatts could be prevented from going back on that accord.

It is also curious that Bob Bentley was criticized for taking some steps to clarify the potential position for QRL when he was at the time a director of Tatts but then is criticized for not using his position to seek a resolution of the matter. It seems that he was damned if he did, and damned if he didn’t!

Dredging up the past

The Commission received submissions from long-time opponents of Bob Bentley about events that took place many years ago and chose to investigate them to see whether conduct of some parties may have breached a code of conduct that may have existed within the control body at the time.

One issue was what became known as the “proxy issue” where Bill Ludwig exercised a proxy vote in 2008 on behalf of the Queensland Country Racing Committee. It is concerning that findings were made about events that took place over five years ago yet not all witnesses were called to give evidence and, as Mr Ludwig said in his evidence, he has been unable to obtain relevant documents out of RQL about the matter.

The Commission also went into issues surrounding the selection of candidates for election as directors of QRL in 2009, even though the matter was scrutinized in Supreme Court proceedings that took place in that same year. Despite not hearing from all possible witnesses, and the recollection of witnesses who did give evidence to the Commission cannot be considered clear after so long, the Commission found that a code of conduct was breached.

The code of conduct, so far as it may have applied in QRL/RQL, did not have the force of law. The Commission conceded that “there was no statutory obligation to comply with the codes” (page 91). Yet, by referring to internal codes of conduct, the Commission took up the matters that Mr Bentley’s opponents had urged it to investigate.

On the other hand, when a possible breach of the code of conduct by another former director, Kerry Watson, was raised, the Commission dismissed the issue by saying it was “unnecessary for the Commission to make a determination on the correctness, or otherwise, of Ms Watson’s actions” (page 139).

There are many other, more significant matters affecting the management of racing in Queensland that should have been investigated. Unfortunately, by the Queensland government conveniently cutting off the terms of reference for the Inquiry at April 2012, many issues that are now causing serious concern for industry participants in relation to the new management of RQL will have to be left for investigation some other time.