It was the conflict of interest surrounding John Nagle’s wife and her contract with iCare that proved to be the last straw. After a week of negative press and calls for his head, on the back of a joint media investigation with The Sydney Morning Herald and Four Corners, Nagle finally fell on his sword. His departure follows the resignation of iCare director Mark Lennon last week.
The conflict with his wife emerged during a parliamentary inquiry on Monday. At 5pm Nagle, who had walked into the hearing confidently, left battered and bruised after being grilled over a trip to Las Vegas that wasn’t declared, a failure to remember what his salary was, underpayment of workers and a drubbing by the regulator over his attitude to whistle-blowers.
For many, Monday’s hearings dispelled any remaining doubts that iCare needs a radical overhaul and cleanout. Late on Monday night it started, with chief executive John Nagle quitting after it emerged that he was stripped of a bonus for failing to properly declare his wife had been given a contract with the agency.
Before COVID-19 hit, this entity was in crisis. Return to work rates are plunging, which means workers are getting sicker and employers are bracing for higher premiums. The financial disaster is palpable with warnings by the regulator since June 2018 of a financial crisis looming. Despite this the board has paid bonuses and big salaries to the executive team and has a tin ear to an array of problems.
It has also failed to undertake a capability review into the culture and governance of the entity, despite requests from the regulator and an independent report that was published late last year.
This is a company that downplayed a treasury document that said 52,000 injured workers had been underpaid $80 million. At the hearing on Monday the chief executive of the State Insurance Regulation Authority revealed that iCare had adopted a policy that if any injured worker files had missing information, iCare would assume they had been paid correctly. Of 100 files reviewed, 60 had no information, which were therefore deemed correct by iCare and of the 40 that did have information, at least an estimated 19 of them had an underpayment issue.
But one of the most damning insights into iCare’s culture came from Carmel Donnelly, who runs SIRA, when she called out Mr Nagle’s description of the public service as having a “culture of complaint”.
“I have not seen a culture of complaint, I have seen a culture of service … whistle-blowers are not a culture of complaint,” she said.
She said CEOs have an important duty to protect whistle-blowers, not to denigrate them on the public record.
Since the joint investigation hundreds of emails have poured in, some from injured workers, some from insiders raising issues about contracts and a toxic culture.
Greens’ David Shoebridge and shadow finance minister Daniel Mookhey asked a series of probing questions about contracts iCare has awarded. These included contracts to insurance brokers, which SIRA is investigating, a $360 million contract with consulting firm Cap Gemini and software provider Guidewire, a trip Nagle had taken to Las Vegas courtesy of Guidewire which didn’t appear in the annual report and the details of how a series of contracts were awarded to former colleagues of Nagle’s who had set up Bridge International.
Nationals’ Trevor Khan also observed that iCare’s method of informing one of its insurance agents, Suncorp, it had lost a contract was, “That’s your throat being cut in a one-on-one.”
Nagle was also questioned about his wife who had worked as a contractor at iCare. He revealed that he had been sanctioned by the board last year on the basis it believed the original disclosure was “deficient”. He said he lost his short-term bonus as part of the sanction and threatened to resign.
“I was disappointed with the board’s decision to sanction me,” he said. But he said the chairman Michael Carapiet talked him out of it and said he had the support of the board to “carry on”. On Monday night, he had another conversation with Carapiet and this time his resignation was accepted.
NSW Treasurer Dominic Perrottet needs to take off the blinkers, stop with the spin, and take decisive action to arrest this disaster.
Source: Brisbane Times