NSW RSL Inquiry Prompts Calls for Sweeping Fundraising Reform
14 February 2018 at 4:42 pm
A high-level inquiry has called for sweeping reform of fundraising regulations to make charities more accountable for how they spend public donations, after it found “corruption and cronyism” had led the New South Wales RSL to the “brink of destruction”.
On Monday the NSW state government released the report of former Supreme Court judge Patricia Bergin following a year-long independent inquiry into the fundraising activities of RSL NSW, RSL Welfare and Benevolent Institution and RSL LifeCare.
Minister for Better Regulation, Matt Kean, said the 547-page report detailed “the shameful and disgraceful behaviour of former president Don Rowe and the culture which allowed him to get away with it”.
“It also highlights appalling business practices, shocking oversight and leadership which can only be described at best as being utterly inept,” Kean said.
Among the findings, the report found the former NSW RSL president Don Rowe spent $465,376 on his RSL credit card between 2009 and 2014, including $213,000 in cash withdrawals.
Rowe also allowed his son to stay, rent-free, in RSL-owned accommodation in the Sydney CBD for seven years.
In the report Bergin said the “old guard” of the organisation had engaged in a “cover up” of the real reasons for the departure of Rowe.
“It might well be asked how it could possibly happen that the president of this formerly well-respected organisation could misuse its funds and then resign from the presidential role with accolades and well-wishes that ignored the reality and misled the members and the public,” the report said.
It questioned whether these organisations could now be trusted with public money.
“The integrity of each of RSL NSW, RSL WBI and RSL LifeCare has been compromised by a combination of sheer ineptitude and cronyism and in the case of RSL NSW, disreputable conduct of the long serving president, Mr Rowe,” the report said.
Based on the findings, the report made a number of recommendations for reform, including that NSW Fair Trading liaise with the ACNC and any other entity, including the Fundraising Institute of Australia, to develop clear guidance for charitable fundraising organisations in respect of political donations and attendance at political functions.
It also recommended that consideration be given to the “introduction of a single, unified Australian statutory regime for the regulation of charitable fundraising” as well as to simplifying the regime.
“Each charitable fundraiser is governed by many different and overlapping provisions in the act, the regulations and the standard and particular conditions of their fundraising authority,” the report said.
“There is the real prospect, as happened with each of the entities in this inquiry, that fundraisers may lack familiarity or clear understanding of the detail of the statutory regime. It is therefore recommended that consideration be given to some simplification of the regime by removing the duplication and overlapping provisions and consolidating them into one place, preferably the conditions of the fundraising authorities that are granted, with the act providing the key provisions.”
Bergin called for the RSL NSW executive members of the governing body and management team members involved in fundraising to complete fundraising courses with the FIA.
FIA CEO Rob Edwards said he welcomed the findings about the need for simplification.
“The NSW Charitable Fundraising Act and Regulations are particularly complex, confusing and overdue for review and simplification, as FIA has been urging for several years,” Edwards said.
But he told Pro Bono News that the latest findings could also add weight to arguments in favour of the government retaining the regulations.
“A couple of years ago when there was call for the act to be repealed or reviewed there was a view then that maybe it should be simplified or there should be a national regulator looking after the issues of charities and or fundraising and that went nowhere,” Edwards said.
“When we met with Minister Kean six months or so ago he made it quite clear that the provisions of the act were going to stay because that gave them the opportunity to take this action they had with the RSL.
“So far from seeing it going away, we could be more likely to see it retained more than anything else.”
Edwards raised concerns that a single statutory regime required “getting the states to agree”.
“The report does recommend something that most of us have been working on for many years and that is the holy grail of one single statutory regulatory regime for fundraising, but it seems many have tried and few have succeeded,” he said.
“It does make recommendations in respect to the ACNC having some jurisdiction in that area and broadly we would support that, but getting the states to agree on anything is almost impossible, and again many have tried to do this in the fundraising space and it just hasn’t worked.
“But I think this is just another indication that there is a need for a long hard look at fundraising regulation in this country.”
He said the report showed there was a lack of education, and understanding of “not only the statutory requirements at a director level but also around the role of ethical fundraising at an operational level too”.
“It has made some quite specific recommendations that quite surprised me that the management should be undertaking, for example FIA’s certificate in fundraising, and that advance managers should do the diploma. And I think, take our self interest out of it, but it does indicate that there is a need for better education in the fundraising sector and not only around practice but moreover around the context that it is in,” Edwards said.
He said the actions described in the report served to erode “what we all want, trust and confidence”.
“Trust is one thing but confidence is another issue again. This is just another issue where we believe charities generally need to have a high level of trust in the community and things like this aren’t helping,” he said.
“In respect to the code, we have maintained that regulation can set high level principles. But at the end of the day you need people at a granular level who can deliver fundraising in a manner that is going to create trust and confidence in the community and respect donors wishes.”
Following the report, Rowe has been referred to the NSW police for further investigation.
Meanwhile 13 current and former RSL councillors have been referred to ASIC and the ACNC in relation to the cover up of Rowe’s misconduct, with eight former and current RSL LifeCare office-holders referred in relation to their conduct as directors.
The NSW government has also amended the conditions on RSL NSW’s fundraising authority to stop its fundraising until its auditor EY has certified that RSL NSW has the processes to comply with the law.
Kean said he hoped trust could be restored.
“There’s no doubt the RSL has been through a devastating experience as the astonishing level of rorting, cover-ups and cronyism was exposed for all to see,” Kean said.
“However, with James Brown and Andrew Condon now stepping up to the plate to take the RSL into a new era, I’m confident that trust can be restored.”
The report comes 18 months after Fairfax Media first reported concerns within the veterans’ league over the way some board members were spending allowances.
Minister for Veterans Affairs David Elliott said the recommendations of the inquiry provide the veterans community with the closure they deserved.
“The RSL can now move forward with its core responsibilities of supporting veterans and their community,” Elliott said.
“Our veterans have so much to look forward to during the Centenary of the Armistice including the Veterans Employment Program, Invictus Games, initiatives to address homelessness, and a number of war memorial grant programs.”
The full report can be found here.