The Temby Inquiry: The Findings and the Fallout

Of the allegations against Cowan, only one was found to have been made out. It concerned the withholding of information about his remuneration and the nature and extent of the Club’s financial dealings with Phyro Holdings. Although members of the executive knew about Cowan’s remuneration, the full Board did not. Nor did directors generally know the extent of the financial arrangements involving Phyro.

Cowan responds that trust was a major issue with him at the time.

If I believed that I could trust everyone on the Board, it would never have got as bad as it did.

But I was being attacked publicly and quite viciously by Ron Mulock and it was obvious that he was getting confidential information from someone on the board. So I continued to insist on the confidentiality clause in my contract. There was no legal requirement to disclose these matters to the full board or to the members. The criticism by Temby was that I had insisted on confidentiality.

My guess is that if you asked Terrence Lynch or Ian Temby what they earned last year they would quite rightly tell you to mind your own business. Most people prefer confidentiality of their earnings. When I was insisting on confidentiality, it was just as legal for me to do so as it still is for both Terrence Lynch or Ian Temby. It was perfectly legal.

In August 2004, following the circulation of an issues paper indicating that Ian Temby might make findings of corrupt or improper conduct, Panthers commenced proceedings in the Supreme Court to clarify the limits of his powers under section 41X of the Registered Clubs Act.

As described in the preceding Part — Part 72 — the Government responded by introducing legislation that would have extended the powers of special inquiries, including inquiries already underway. The proposal encountered strong parliamentary opposition and ultimately failed to become law.

Grant McBride had one final present for Panthers leading up to Christmas 2004. Ian Temby had heard final evidence in the Inquiry on 27 October. Roger Cowan was the last witness. All that he, Panthers’ management and the Board of Directors could do now was wait. Their information was that Ian Temby would deliver his report to Ken Brown, the Director General of Liquor and Gaming on 12 December.

Had this happened, however, state politicians in NSW would have been off on their Christmas break, and most members of the parliamentary press gallery would have packed up for the year. Influential media personalities were also about to break.

We can only imagine what might have been going on within the halls of power in Macquarie Street up to that point. By then, the evidence presented during the Inquiry must have given the Government some indication that its most serious allegations against Cowan were unlikely to be sustained. They did not need Ian Temby’s report – their own legal experts would be keeping them well in the loop. The Supreme Court decision had dampened the potential for headlines that would do more damage to Cowan, or Panthers – headlines which would have justified the enormous expenditure in time and money over the previous six months. The ruling prevented Temby from expressing an opinion that, for example, a certain matter might have been evidence of corruption. Not much perhaps, but a skilled journalist would have been able to create negative headlines

Cowan describes the tight spot Michael Egan and Bob Carr were in with an analogy:

The government had chartered and expensive boat to trawl the waters for big fish. Now they were returning to the harbour with a small jar, only quarter filled with fingerlings

But the government might still salvage something from the failed fishing trip if it could get hold of the report before the promised release date. Minister McBride could report to parliament that he had received the report and frame his speech in a manner that would spark the sensational headlines they craved. The early release would deny Panthers the opportunity of preparing a media release which reflected the full report, and which could have been authenticated by those journalists who pursue the truth. The surprise tactics would prevent leading broadcasters, including Alan Jones and John Laws, getting in first with the facts and spoiling a good story.

Sensational headlines would also divert the media from some very pertinent questions – not the least, what a wasted exercise had it been, and how much did it cost? Were the allegations investigated before the Inquiry was called?

Government press releases had been distributed and all was ready for the final announcement before the Christmas break.

McBride’s presentation concentrated on Temby’s criticisms of Cowan’s secrecy and the Club’s governance, without mentioning that the Commissioner had rejected the most serious allegation against him. The timing gave the Minister an opportunity to establish the initial public interpretation of the report before Panthers could examine it and respond.

Towards the end of question time on 9 December, the final day of sittings for 2004, McBride made his play for the headlines. The Hansard record has him stating:

Allegation 6 reads, in part:
The Club is, and has since at least 1 June 1994 been, to a large extent run by and for the benefit of Mr Cowan and his close associates, including members of his family and Phyro Holdings Pty. Limited, and not in good faith for the benefit of all members of the Club.

Ian Temby’s report says:

I find Allegation 6, fairly described by Counsel for the club as “the most serious allegation” – not to have been made out.

Part of the Commissioner’s conclusion was:

I do not find that Cowan’s involvement with the club has, on balance, been against the best interests of members, generally. He has done it, and them, much good.

In the face of that report, Grant McBride was able to stand up in Parliament, look at all the members who had not yet had the opportunity to read the report, and tell them something completely different. He told the House that Temby found that:

The club has, to an extent, been run for the benefit of Cowan and Phyro Holdings Pty Ltd since at least June 1994.

He went on to say,

The Temby report shows the type of unhealthy practices that have developed in parts of the New South Wales industry, bring discredit on the vast majority of decent clubs … highlighting the need for reform in the clubs industry and in club practice and governance.

How the minister could get it so wrong is a mystery. But it is an error that fits neatly if one accepts the theory that the real intention of the inquiry was to discredit Cowan and Panthers – and ultimately the club industry. Truth and factual evidence were totally passed over by the minister. Because of the timing of the distribution of press releases, and the minister’s speech, most radio and television news headlines reflected only McBride’s very skewed interpretation of the report.

Fortunately for Panthers, there were a lot of members of parliament who had followed the story and developed sympathy for Panthers and Cowan. As soon as they realised what was happening, one of them actually left the chamber and made a quick phone call to Steve Bowers. A hastily organised trip to Sydney, a faxed copy of Temby’s report, and some urgent media releases by Panthers media manager Rob Weaver were able to dampen the government’s unfair advantage, slightly.

In his breakfast show on 10 December 2004, Alan Jones said:

I just don’t know if the government is aware of the damage they have done.

Jones commented that the government had been crying poor about not having enough money to maintain the state’s schools,

… but we can spend one and a half million dollars… trying to find out that Roger Cowan’s a crook.

He called it a spiteful inquiry into Panthers, simply because of opposition to the poker machine tax.

He quotes Temby’s words that “Cowan seeks only to benefit members” saying,

The sadness is – if not the disgrace – that we all knew that before the inquiry began.

In the early stages of research for this book, Grant McBride’s office was contacted several times with a request for an interview. There was no response. In late 2006, just before the book was published, the minister was approached to ask about the manner in which the report had been released, and whether he felt he had misled parled parliament in his interpretation of Mr Temby’s findings.

Quite late in the research, rumours also surfaced that DGR investigators advised the government, some time before the Inquiry was called, that they had completed their investigation and recommended that no further action be taken. Mr McBride was asked for a comment on both issues, by certified mail. McBride’s office acknowledged the first inquiry and advised that the matter was being examined. No substantive response had been received by the time the manuscript was completed.

In his speech to the parliament, the minister also made reference to the Supreme Court ruling by Justice Hamilton, insinuating that it had prevented the Commissioner from doing his job.¹ As a minister of the crown, one could expect that the minister understands the judicial process, and that he had read Justice Hamilton’s judgement. It said in part,

The Commissioner’s function is to investigate. He is to gather material. He may make findings of fact … The Commission is primarily an investigative body whose investigations are intended to facilitate the actions of others in combating corrupt conduct.

It was also the judge’s view that the usefulness of the report was not ‘compromised by a lack of findings in terms of corruption or impropriety. The Director will still have the benefit of the investigative procedure, together with findings as to particular factual matters …’

Fifteen months later, Minister McBride’s contention that the ruling somehow obstructed the government was perpetuated by the DGR when director-general Ken Brown finally released his report on the Inquiry. It had taken until 1 March 2006 – the day of his retirement from the position.²

The delay in the release of the report was almost farcical, except that for the people waiting in limbo, there was absolutely no humour. It said, in part:

The Director considers there is sufficient evidence to support complaint proceedings against the Club under … the Registered Clubs Act 1976, which provides:

“A club shall keep correct accounts and books in respect of the financial affairs of the club showing the particulars usually shown in accounts and books of a like nature.“

However, and after careful consideration of the potential financial implications facing club members and the community in general, together with the remedial action taken by the club, the Director has decided not to commence complaint proceedings in the Licensing Court of NSW.

Was there any truth in this communication to the club?

In 50,000 pages of Inquiry documents, there is not slightest shred of evidence that the Club had not kept correct accounts. The DGR itself has never issued a complaint nor has there been any qualification by auditors that reflected on the standards of accounting at Panthers. The only criticism arising from the Inquiry was that Phyro Holdings Pty Ltd had not kept the Club informed accurately about the amount it was owed under its contracts.

There is an enormous question left hanging here. The government mounted an inquiry to find evidence that could be used against a club or a club official – and enable the appropriate measures to be taken. It cost millions and caused disruptions for a year. Now the Director was saying ‘there is sufficient evidence to support complaint proceedings’– but that he had decided to take no further action.

It just does not add up!

A compliance notice was served on the club secretary the same day, requiring the Club to comply with certain provisions in the Act. The notice was also to be placed on the agenda of the next board meeting. The Club would be monitored and audited by special inspectors during 2006, it said. The DGR followed the compliance notice with a Notice of Determination, which gave a more detailed account of Mr Brown’s deliberations.

Brown mentioned what he described as the

regrettable comments of individuals associated with the club who loudly and publicly contended that Mr Temby had not found either the club or Mr Cowan guilty of corrupt or improper conduct.

He also stated that,

Mr Temby was prevented by the decision of Mr Justice Hamilton of the Supreme Court from making any such findings.

Cowan was appalled at this statement;

There was no restriction on Temby’s powers to find and report evidence. The Supreme Court decision only restricted his power to express a personal opinion regarding corrupt or improper conduct.

Strictly speaking, Ken Brown’s remark about regrettable comments was correct. The individuals should have loudly and publicly contended that “Mr Temby had not found any evidence that suggested corrupt or improper conduct.” It seems to be playing with words rather than facts but it would have been more accurate

On 19 April, then Panthers group CEO Glenn Matthews responded to Mr Brown’s notice on behalf of the group board:

… you appear to criticise the club’s action in bringing the Supreme Court proceedings concerning the conduct of Mr Temby’s inquiry. Those proceedings were successful. The principle of the judgement was to confine Mr Temby’s report to findings of fact and preclude the expression of his merely personal opinion.

The letter continued that Temby had found no dishonesty in the dealings between either Cowan or Phyro Holdings and the Club. Further, Matthews said that if Brown was suggesting that the Supreme Court proceedings precluded the Commissioner from such findings, he was incorrect.

The Board and senior management were incensed by the Notice’s claim that during their investigation in 2003, the department’s special inspectors had not received ‘full and forthcoming assistance’ from the Club. ‘Had the club co-operated fully from the outset’, said Ken Brown, ‘there might not have been the need for me to commission Mr Temby to conduct an inquiry.’

To Panthers’ management, Brown’s explanation appeared to shift responsibility for the Inquiry onto the Club itself, despite the failure of its most serious allegation against Cowan. A classic case of “blaming the victim”.

Matthews’ view on the level of cooperation with the DGR is clear:

From the day I started at Panthers more than twenty years ago, Roger always insisted that we give full co-operation to all the department’s inspectors. And with a club our size, they were often in there. I think even the DGR inspectors – if they were allowed to say it – would tell you how open we always were with them.

Matthews described the suggestion that Panthers didn’t co-operate as ‘untrue to the point of offensiveness’, pointing out that the Club received no complaints from the DGR at the time, nor any compliance notices.

The suggestion of non-co-operation was never put to any club witness appearing at the Temby Inquiry, especially in the context of Mr Cowan having asserted “full” co-operation with department inquiries at all times.

Matthews remembers instances where the Club had legal advice that the DGR was requesting information that went beyond its powers to request. But, in order to co-operate fully with the investigations, they did provide the information, he said.

Ken Brown’s Notice of Determination also said that some matters emanating from the Inquiry were being referred to other government bodies, such as the Licensing Court, Taxation Department and the Department of Commerce. Matthews acknowledged this statement, but in his response letter concluded:

It remains the club’s impression that it was subjected to the 41X inquiry not because departmental inquiries suggested corrupt or other improper conduct as to the matters of the Terms of Reference for that inquiry, but because those inquiries did not tend to confirm the rumours reflected in those terms and that such an outcome was unacceptable to the powers that be.

The Instrument of Appointment notice inaugurating the Inquiry first appeared on the DGR website in May 2004, listing the six allegations against Roger Cowan and Panthers. Temby delivered his report to Ken Brown on 8 December that year. The allegations remained on the department’s website as apparently unanswered accusations until Brown released his notices on 1 March 2006.

Had the Temby report provided evidence that supported proceedings against Cowan or Panthers there is no doubt there would have been headlines to that effect immediately in the Sydney Morning Herald. It probably also would have been proudly and loudly displayed on the DGR website along with the allegations.

Such a prize eluded the government.

Ian Temby had found only one of the allegations against Cowan to be ‘made out’ and it related to activities that were not illegal and could not possibly have led to any action against Cowan or the Club by any government or legal body.

Although the allegations against Cowan and Panthers remained on the DGR website for almost two years, Temby’s findings never appeared there.³

Immediately following the release of Temby’s Report, Steve Bowers prepared a report for the Panthers Board of Directors. This report included a section showing Temby’s findings against each of the initial allegations. This summary is available in What Temby Actually Found — Steve Bowers Reports to the Board.

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1. In Penrith Rugby League Club Ltd v Brown [2004] NSWSC 932, Justice Hamilton held that section 41X of the Registered Clubs Act 1976 did not authorise the Commissioner to make definitive findings that a person had engaged in corrupt or other improper conduct. The judgment did not prevent the Commissioner from making factual findings, including findings that might reflect adversely on individuals. See The Series Part 72 — The Panic Amendment for details on how the Labor Government attempted to push through an amendment to Section 41X to retrospectively change the rules of the Inquiry.
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2. Ken Brown, Director-General of Gaming and Racing, issued his determination on 1 March 2006, more than a year after the Temby Report was delivered. The determination and Panthers’ response are discussed here as recorded in the original manuscript. A complete copy of the determination has not yet been located for independent verification.
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3. Max’s note: I am unsure about this final phrase. I think Temby’s Report was eventually available on the department’s website. It was hard to find. I think the digital copy I have of the report was downloaded from that website. ↩︎

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