MPs cleared of wrongdoing in invoice fraud matter; but time for MPs to stop certifying their own expenses

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Forty current and former Liberal MPs did not know - and could not reasonably have known - of invoice fraud committed by former Liberal State Director Damien Mantach, Victorian Ombudsman Deborah Glass has found.

Ms Glass was asked by Parliament’s Legislative Assembly to investigate the MPs’ knowledge of, and involvement in, the fraud undertaken by Mr Mantach between 2010 and 2015.

Mr Mantach arranged for a printing and mail distribution company to inflate the invoices, with the company believing the extra money was going towards another business providing services to the Liberal Party.

Mr Mantach instead used the proceeds to fund his luxurious lifestyle. He was convicted of fraud in 2016.

“An investigation can result in exoneration and this was the case in this instance, where we found no culpability on the part of any of the named MPs,” Ms Glass said.

“They had paid for printed goods, which they received, and although detail was lacking in many invoices, at a price they could not reasonably have been expected to query,” she said.

The Liberal Party has paid back the amounts overcharged to Parliament through Mr Mantach’s fraud.

However, Ms Glass said that while only Mr Mantach was responsible for the fraud, the fact that parliamentary funds could be diverted in this manner reflected poorly on all involved and the whole system.

“The Liberal Party’s processes were plainly too weak to detect it for years, and the reliance on a single trusted individual meant insufficient checks and balances to protect both them and Parliament from the fraud,” Ms Glass said.

Tabling her Investigation into matters referred from the Legislative Assembly on 8 August 2018 report in the Victorian Parliament today, Ms Glass recommended Parliament change the rules for MPs’ expenses, so MPs are no longer able to certify their own expenses.

“Whether or not an investigation condemns or exonerates, the public should be concerned about the number of allegations being made about MPs’ expenses.

"Relying simply on the mantra that each Member is individually responsible for their expenses leaves Parliament vulnerable to the misuse or misappropriation of public funds.

“It is becoming increasingly difficult to see why the expenses of Members of Parliament should not be subject to the same robust scrutiny that applies to public servants and the broader public sector, who cannot simply self-certify their entitlements from the public purse,” she said.

“Such a system would provide greater certainty for Members, reduce the risk of further scandals, and help to rebuild public confidence about how Parliamentary monies are expended.”

Ms Glass was also asked by Parliament to investigate whether the Member for Lowan, Emma Kealy, had requested invoice dates be altered to circumvent Parliamentary rules on the use of Members’ communication budgets during election periods.

Ms Glass found no evidence of wrongdoing. “Despite the misleading impression given by an email, all parties had acted both honestly and consistently with the Members’ Guide,” she said.

Read the report here: Investigation into matters referred from the Legislative Assembly on 8 August 2018

Media contact: Ainslie Gowan | Mob 0409 936 235 ainslie.gowan@ombudsman.vic.gov.au