Icare whistleblower speaks out on culture of corruption at workers’ compensation insurance agency
A senior insider who worked at the scandal-plagued NSW insurance agency icare has broken his silence about a culture of corruption at the organisation.
Former major crimes and homicide detective Chris McCann joined icare as the head of compliance investigating fraud and corruption in 2016.
“I think it’s time to tell the truth and join the dots,” Mr McCann told a joint investigation by The Age, The Sydney Morning Herald and the ABC’s 7.30 program.
Icare, the $38 billion insurance agency, looks after millions of workers when they get sick or injured on the job.
Set up by the NSW government in 2015, it has lost more than $3 billion, despite cutting benefits to thousands of injured workers.
McCann decided to speak out to let people know that the seeds for the current disaster were set back in 2016.
Bad practices, conflicts of interest
Mr McCann was the whistleblower who first discovered what was happening at icare.
Instead of being listened to, he was undermined, blocked and bullied.
He kept diary notes and paperwork that he showed to the joint investigation, detailing his specific concerns and the senior executives that he told.
It also details the removal of crucial information from a report he had put together for the board audit and risk committee.
“The habit to keep diaries was formed when I first became a detective,” he said.
“I would always note the time, date, when I had conversations with people.
“And so each time I would raise my concerns with whomever it was, I would record the fact I had raised my concern and also recorded their response.”
His diaries, spanning 2016 to 2018, include “procurement practices not being followed. Awarding friends and ex-colleagues contracts, not declaring conflicts of interest, approving invoices without substantiation … millions of dollars of contracts being awarded to people with close relationships internally and not declaring their conflicts of interest”.
McCann said his attempts to call wrongdoing to account were blocked.
‘So many cover-ups’
In late 2017, Mr McCann confronted an executive who had failed to declare a trip to Dallas, Texas, funded by RSA Archer, after icare had bought some of its software.
Mr McCann sent emails to the executive asking him to lodge a gifts and benefits declaration, which he finally did weeks after taking the trip, but it was not reported in icare’s annual report.
“There were so many cover-ups,” he said.
Mr McCann told the joint investigation that if the company had followed his compliance and governance framework and internal policies, and management had taken his concerns about misconduct seriously, icare would have avoided its current mess.
In the past few weeks, a joint media investigation with The Herald, The Age and ABC has exposed solvency issues with icare, including a $4 billion taxpayer bailout of the Treasury Managed Fund this year, the underpayment of $80 million to 52,000 injured workers and contracts being awarded without a tender.
The scandal has claimed the scalp of icare chief executive John Nagle after it emerged he had been sanctioned by the board for “deficient” disclosure of a contract awarded to his wife without a tender and had taken a trip to Las Vegas funded by a vendor without declaring it.
On a personal level, Mr McCann said his poor treatment escalated into a homophobic attack shortly after he was diagnosed with a serious illness that he reported to some people in head office.
He was sent a series of emails at work from a fake email address and a package including rubber gloves.
“icare does not want gay … in the workplace. You should get out,” one email said.
“Do not touch our cups, plates or cutlery. Your type are disgusting.”
A later email said: “Eating in our kitchen again, didn’t you get the last message? Don’t you understand you are not wanted.”
Around the same time, he started being excluded from crucial work meetings that made it difficult to do his job.
In December 2017, he was told by a colleague that his job had been advertised.
When he queried it, he was told the ad had been accidentally placed.
“To learn your role has been advertised and other people in the organisation knew about it before I did, it’s crushing,” he said.
At times Mr McCann said he even contemplated suicide.
“I felt gutted, destroyed, betrayed, and they were in effect destroying everything I had built up over those years in my career,” he said.
Icare refused to comment on the treatment of Mr McCann.
In a statement, it said it investigated matters he raised with the assistance of independent third parties.
“Matters that were referred to ICAC did not lead to further investigation,” the statement said.
“Given the confidential and sensitive nature of the relevant matters, icare is unable to comment on the specifics of each investigation.”
In February 2018, the mental stress took its toll and he quit.
He signed a gag order and booked himself into hospital where he was diagnosed with severe depression and PTSD.
“When I left in 2018, I thought that would be the end of it,” he said.
“Nothing would come out about icare; that the story would never come out.
“This, I hope, is going to get the truth out about how this business is run and that will somehow help me move on with part of my life — if I can.”