ATO whistleblower in court: ‘they sabotaged my complaints’

BY CHRIS SEAGE, A TAX CONSULTANT AND FORMER ATO AUDIT MANAGER | SEP 20, 2012 1:04PM |EMAIL | PRINT

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A senior lawyer in the Australian Taxation Office has sensationally claimed that high-ranking senior executive service officers within the ATO sabotaged her whistleblower complaint, writes Chris Seage, a tax consultant and former ATO audit manager.

A senior lawyer in the Australian Taxation Office has sensationally claimed that high-ranking senior executive service officers within the bureaucracy sabotaged her whistleblower complaint and demanded she see a psychologist within five weeks of lodging the complaint.

Serene Teffaha, a senior tax technical specialist of 12 years standing, is suing the ATO in the Federal Magistrates Court under the Fair Work Act 2009, alleging eight adverse actions as a result of lodging a whistleblower complaint she was entitled to make under the Public Service Act. The allegations in the court writ, obtained by Crikey, calls into question whether amendments to the public service whistleblower protection laws currentlybefore the parliament are strong enough to protect whistleblowers.

In 2011, Teffaha and four other senior colleagues lodged the whistleblower complaint with David Diment, a first Assistant Commissioner of Taxation, alleging various issues about the conduct of the ATO’s high-profile pursuit of high-wealth individual Australians worth between $100 million and $250 million a year. Some of the issues identified lack of resourcing in the area to handle the large volume of objections to the assessments as a result of audit action and the lack of technical knowledge held by ATO staff to properly deal with complex matters emanating from the audits.

The complainants believed that taxpayers were being disadvantaged by not having their issues dealt with in a fair and professional way. At risk were current and imminent objections her team was involved in where the tax in dispute was nearly half a billion dollars in revenue. After the whistleblower complaint was lodged, Teffaha and the other complainants allege they have been the subject of bullying by tax office big wigs. Teffaha has been on stress leave since last year and has not returned to work.

In a bizarre twist to the saga, Crikey understands that last month the ATO made an offer of $250,000 cash as a settlement offer to Teffaha on the condition she withdraw her court action. In an email from a senior officer to Teffaha, of which Crikey has a copy, he says:

“If you wanted to be put in the same financial position as you would have been had you drawn a salary for 3 years then my understanding is that would be the equivalent of around $250,000 ‘cash in hand’ today. The fact that I have worked closely with you and have seen first-hand the qualities you can bring to the workplace means that I am in a very good position to provide you with the statement/reference. Ultimately I think that statement may be of greater assistance to you in rejoining the workforce in a job you’re well-qualified for than the outcome of any court proceedings.

“Anyway, let’s keep the channels of communication open and continue our constructive discussions about this matter. I’m really glad we can talk about this because, frankly, I think it’s only the lawyers that would benefit if we keep going down the formal, legal path. And I think the sooner we can bring this to a mutually acceptable conclusion, the better it will be.”

Teffaha rejected the offer as she did not consent to the ATO condition barring her from taking personal litigation against ATO senior officials including David Diment. Teffaha told Crikey: ”The Commonwealth and its agencies are entering into confidentiality and release agreements designed to exonerate senior public officials from their unlawful conduct using taxpayers’ funds. This is a serious breach of the Commonwealth Model Litigant Rules.”

Within five weeks of lodging the complaint, the ATO wanted to refer her to a psychologist and within eight weeks she was referred to a psychiatrist due to the belief she was suicidal. In April 2011 Assistant Commissioner Toni Balik met with Teffaha and the other complainants and expressed the view she was suicidal, according to the court document. Teffaha denies the allegation that she made any threat of self-harm then or at any other time. She toldCrikey that four other complainants at the meeting would dispute the claim.

The court document alleges that Diment:

• Has seriously breached the relevant laws, policies and procedures in handling a whistleblower  investigation by carving out significant points from the complaint and commissioned a formal external investigation into the substance of the allegations
• Assigned Margot Rushton, Assistant Commissioner, from the same area of the alleged wrongdoers to handle the WB complaint without Teffaha’s consent
• Conspired with others to fix the outcome of the whistleblower complaint before investigation (the pre-determined decision that there was no substance to the allegations was handed down on September 8, 2011)
• Singled her out from the other complainants and told her not to enter ATO work premises while the investigation was taking place.
• Bruce Quigley, a second Commissioner of Taxation and the second-highest ranked officer in the ATO, promised Teffaha a permanent transfer out of the problem area but Deputy Commissioner Greg Williams, assistant Deputy Commissioner Richard Collis and Rushton sought to deny Teffaha this permanent transfer and insisted she remain in her position, reporting to them, while she was experiencing hostility and bullying from them.

Teffaha says the public interest disclosures made in the whistleblower complaint have since been validated by the Inspector General of Taxation’s review into the ATO’s compliance approach to small business released on April 24 this year.

When confronted with bullying and being victimised, Teffaha turned to the Tax Commissioner Michael D’Ascenzo for help. In May 2012 she wrote animpassioned letter telling him:

“As a committed public servant, when I saw issues that undermine the integrity and work practices of the ATO, I tried to do my part to flag and improve the issues. As a result, the ugly, abusive managerial style currently entrenched in the ATO culture was laid bare for all to see …

“In an attempt to resolve the various issues that confronted me, I reached out to a number of external scrutineer agencies including the Australian Public Service Commission, Comcare and the Fair Work Ombudsman. Unfortunately, I discovered that they are part of this process of abuse and have collaborated in protecting the perpetrators. Whistleblowers need scrutineer agencies with meaningful powers to intervene and make authoritative decisions, when necessary.”

D’Ascenzo has never responded. Shane Reardon, the acting-second Commissioner of Taxation, told Crikey:

“The ATO cannot comment on individual employee matters or circumstances. In particular it is not appropriate in this case as the matters detailed in the complaint are currently the subject of proceedings before the Federal Magistrates Court. We have a detailed guide for our staff (a Corporate Management Practice Statement) which sets out how the ATO manages whistleblowing.”

Protection for whistleblowers is covered under section 16 of the Public Service Act. It states that an employer must not victimise, or discriminate against, employees because they have reported breaches (or alleged breaches) of the code of conduct to them. Amendments currently before Parliament increase the powers of the Australian Public Service Commissioner to determine complaints, other than whistleblower complaints, which ironically continue to be determined by agencies. Effectively, whistleblower protections remain unchanged.

Teffaha today remains on stress leave without pay. She says the ATO refuses to suspend or sack her, nor make any finding of misconduct against her. She is surviving on savings and with the help of her family while she waits for the commencement of her court action.

“The whistleblower laws are a joke,” she said. “If someone had told me the truth back then, I wouldn’t have lodged the darn thing. But I don’t regret what has happened. The community has a right to expect that public service agencies that serve them don’t sweep information under the carpet and don’t engage in conduct of this type against dedicated and professional employees. I am committed to realising this expectation.”