World News

Dirty money, dirty trains: IBAC probe shows V/Line still off track

Save articles for later

Add articles to your saved list and come back to them any time.

The ink was hardly dry on a written pledge to stamp out "unfettered cronyism" at regional rail operator V/Line when then-chief executive James Pinder secretly offered a job with a salary exceeding $200,000 to a mate.

“For you brother, everything is possible,” Pinder wrote to Metro’s operational fleet manager Peter Bollas in a text exchange spanning 2017 and 2018.

The cavalier remark was at odds with Pinder's public attempts to champion integrity at V/Line in the wake of a 2017 Independent Broad-based Anti-corruption Commission (IBAC) probe — codenamed Operation Lansdowne — exposing a jobs-for-mates culture that saw managers grant friends lucrative contracts on salaries higher than the Prime Minister’s.

Photos taken during the IBAC raid on sacked V/Line chief executive James Pinder’s home.Credit:IBAC

Pinder and Bollas were close friends, having worked together at Metro between 2012 and 2016, when Bollas was Pinder's direct report. Bollas attended Pinder's wedding.

Poached from Britain and on close to a $500,000 annual salary, Pinder promised a squeaky-clean culture at V/Line, whereby new recruits would be hired on merit, their resumes scrutinised and all conflicts of interest declared.

“V/Line’s commitment to integrity is ongoing and genuine,” he wrote in his final report to IBAC on December 18, 2018.

But IBAC investigators were detecting unusual transactions in the new chief executive's bank account that month, including a $320,000 sum transferred to Pinder from various sources and spent on his $2.5 million Williamstown home. More than $100,000 for his deposit was transferred from a suspicious account the day before Pinder wrote his final report to IBAC.

Investigators moved to tap Pinder's phones, photographed him in secret and raided his home twice in a probe that has uncovered what could be considered the most significant corruption scandal in Victorian transport history.

Three IBAC probes into Victorian public transport — Operation Fitzroy in 2014, Lansdowne in 2017 and Operation Esperance in 2020 — collectively allege that corruption has occurred within the transport bureaucracy in every year since 2006, pointing to a deep-seated cultural problem within the sector.

But never before has such a senior transport bureaucrat in Victoria been sprung for alleged corruption this brazen: accepting cash bribes bundled up in envelopes by a cleaning contractor, handed over in car parks and cafes across Melbourne.

Cash found hidden behind sacked V/Line chief executive James Pinder’s door by IBAC investigators. Credit:IBAC

Pinder repeatedly told IBAC that this money was the proceeds of a gambling syndicate Pinder, Haritos and Bollas were part of.

But this evidence was thrown into doubt when Bollas took the stand and dropped a bombshell.

“I was never in a gambling syndicate,” he said last week in tearful testimony.

Bollas told the inquiry that he and Pinder were accepting monthly payments of between $8000 and $10,000 from Transclean, with Bollas pocketing about $150,000 in exchange for promoting Transclean’s interests at Metro.

The two men had a long-term plan to take over cleaning contracts within Melbourne’s railways and squeeze more taxpayer money for cleaning, boosting their profits, IBAC heard.

They were dutifully wedded to Transclean, despite its woeful performance.

In February, a Transclean cleaner fell under a train in Cheltenham, while a separate incident saw a cleaner nearly electrocuted. Intercepted phone calls revealed that Bollas planned to cover up the safety breach in February.

Pinder knew about the incidents but still called Haritos in March this year to offer him extra cleaning during COVID-19, pitching the pandemic as an "opportunity" to "boost your coffers".

Pinder and Bollas planned to profit from the extra cleaning, with Transclean paid $1.3 million a month by taxpayers despite failing to clean Melbourne's train carriages properly, IBAC heard.



But things started to unravel when Pinder was raided by IBAC on August 19. Investigators seized his burner phone and $10,000 in cash given to him by Haritos.

In panicked letters to Haritos, the V/Line chief started concocting a host of backstories.

“They will try and follow the dollars from you to us,” he wrote after the raid. “They will have been listening to phones and probably still are. This may not end well – prepare for the worst. We need to stick together.”

A familiar destination

Having watched V/Line endure the bruising Operation Lansdowne probe in 2017, Pinder likely understood the seriousness of the investigation to come.

Lansdowne saw IBAC expose a clique of senior V/Line managers bypassing tender rules to grant friends and associates large contracts with eye-watering salaries.

Former general manager of rolling stock Alan Clifford, who was paid more than the Prime Minister, allegedly pocketed more than $18,000 in kickbacks as part of a training rort, with four people connected to the probe now facing criminal charges.

But when the conduct that led to Operation Lansdowne was said to have started in 2013, IBAC was already alleging corruption at Public Transport Victoria and the Department of Transport, which it investigated under Operation Fitzroy.

Two senior officers were siphoning off public funds to line their own pockets, IBAC alleged, by creating dummy quotes, inflated invoices and puppet directors so entities they controlled would win lucrative contracts.

That racket, run by Barry Wells and Albert Ooi, resulted in $25 million worth of corruptly awarded contracts which went undetected by the transport bureaucracy for at least seven years, IBAC alleged.

In response to the probes, the transport bureaucracy has promised tougher policies to ensure public officers declared gifts and conflicts of interest and a tightening of procurement and recruitment rules.

But the alleged corruption has continued and seeped into the upper echelons of Victoria's public transport sector. IBAC heard evidence that another two public officials could be involved in the alleged corruption who are senior to Bollas and Pinder, including someone within the Department of Transport.

Pinder has described a culture at Metro Trains — the only privatised suburban railway network in Australia — where employees socialise with contractors trying to woo them for major taxpayer-funded contracts at bars, casinos and the track. It was in this context that he and Haritos struck up a close friendship.

Metro employees are not subject to integrity standards that exist in the public sector despite handing out publicly-funded contracts, while key data about the suburban network is neither reported in departmental annual reports nor accessible under Freedom of Information laws.

The Rail, Tram and Bus Union's Victorian secretary, Luba Grigorovich, warns the privatisation of Melbourne's railways has led to "standards being eroded, services fragmented".

"Multiple different contracts and outsourced services have led to an incoherent chain of responsibility open to corruption. Now is the time to make this change," she says.

Metro’s tender process is now under way to appoint the next cleaning contractor and evidence heard at IBAC has already raised a red flag.

As recently as February, IBAC heard an unnamed cleaning contractor (not Transclean) offered free football tickets to Bollas, who oversaw Metro's cleaning contracts at the time.

The contractor was acting “like we’re f—ing best mates”, Bollas gloated to Pinder on an intercepted phone call played to the hearings. Why? Metro's lucrative stations contract is “up for grabs”.

Most Viewed in National

Source: Read Full Article