Report
1. On 9 September 1996 the following matter was referred
to the Committee of Privileges:
Having regard to the correspondence addressed to the President, whether
any false or misleading evidence was given to the Environment, Recreation,
Communications and the Arts Legislation Committee, and, if so, whether
any contempt was committed.[1]
2. The matter was referred to the Committee following the President's
acceptance of a recommendation from the Senate Environment, Recreation,
Communication and the Arts (ERCA) Legislation Committee that the matter
should be so referred.[2] It
was first raised on 9 November 1995 with the then President of the Senate,
the Honourable Michael Beahan, by Mr Geoffrey Marr, an administrative
officer appointed to Telecom[3]
in 1985, dismissed in 1990 but reappointed following an independent investigation.
Mr Marr claimed that false statements had been made by Mr David Krasnostein,
Telstra General Counsel, to the Environment, Recreation, Communication
and the Arts Legislation Committee in the course of its estimates hearings
of 27 June 1995.[4] On 13 November
1995, a similar complaint was made by Mr Paul Miles, a private investigator,
friend and supporter of Mr Marr.[5]
The President referred both letters to the ERCA Committee on 13 November
1995.[6]
3. Messrs Miles and Marr wrote again to the President of the Senate,
on 17 November 1995[7] and
13 January 1996[8] respectively, and this correspondence
too was referred to the ERCA Committee. However, the general elections
intervened and it was not until June 1996 that the ERCA Committee considered
the claims that it had been given misleading evidence. On 7 August 1996
the Committee, through its Chair, Senator Kay Patterson, duly recommended
to the President that the allegations made by Messrs Marr and Miles be
referred to the Committee of Privileges[9],
the President determined on 22 August that the matter warranted precedence
in the Senate[10], and it was referred by the Senate
on 9 September.
4. The basis of the complaints was evidence given by Mr Krasnostein to
the ERCA Legislation Committee on 27 June 1995. The complaints may be
summarised as follows:
(a) Mr Krasnostein falsely alleged that Mr Marr had threatened violence
against Telstra employees and their families; and
(b) Mr Krasnostein falsely alleged that Mr Marr and Mr Miles had unlawfully
obtained an internal Telstra e-mail message
5. As is customary, the Committee sought written comment from the parties
concerned. It wrote on 13 September 1996 to Mr Marr, Mr Miles and Mr Krasnostein,
inviting their submissions. In a letter of 12 September 1996 it wrote
to the Chair of the ERCA Committee, Senator Patterson, seeking any further
information in respect of the matter; it also wrote, on 13 September,
to Senator Paul Calvert, as the primary questioner of Mr Krasnostein on
27 June 1995, inviting him to make written comments. Senator Calvert had
demonstrated a continuing interest in Mr Marr's dealings with Telstra.
All persons responded, with the ERCA Legislation Committee making
available to the Committee of Privileges relevant documentation, and Messrs
Marr, Miles and Krasnostein and Senator Calvert commenting directly on
the matter before the Committee of Privileges.
6. The Committee, again in accordance with its normal practice, exchanged
the initial submissions between the relevant parties and received further
comment from Mr Marr, Mr Miles and Mr Krasnostein. All submissions and
documents are included in the volume of documents accompanying this report.
7. The matters raised by Mr Marr and Mr Miles, as specified at paragraph
4 above, are, in summary:
8. The exchange at the ERCA Legislation Committee hearing of 27 June
1995 is as follows:
Senator Calvert: Telstra has previously admitted that Telstra
used a firm, J.R. Craig and Associates, to undertake surveillance work.
Not only was Telstra tapping [Marr's] phones, Mr Chairman, but it was
actually using private investigators to follow him. Could you please
tell me whether Telstra employed any other firms to spy on Mr Marr or
his friend, Mr Paul Miles? Mr Krasnostein: In the course of obtaining
answers on two or three occasions for you, I was not aware of any other
private investigating firm that has come to my notice in connection
with this particular matter. From the information we were able to ascertain,
J.R. Craig had two functions. One was their employment as a private
investigating agency, and the other was for protective services to certain
Telecom employees who stated that they had been personally threatened
by Mr Marr and were concerned for their own safety and that of their
families. Some portion of that J.R. Craig account had been allocated
to providing them with personal security protection for a certain period
of time.[11]
9. In his submission to the Committee of Privileges, Mr Krasnostein explained
his response to the ERCA Legislation Committee as follows:
As is apparent from the text of my answer, I did not state that Mr
Marr threatened Telstra employees ... I said simply that "certain
Telecom employees ... stated [Mr Krasnostein's emphasis] that
they had been personally threatened by Mr Marr," and therefore
were concerned for their safety ... The answer did not state that the
concerns expressed by the two Telstra employees were correct; it merely
informed the Committee of those concerns, and that they constituted
the reason for the expenditure on protection services.[12]
10. The matter before the Committee comes about because of a complex
series of events relating to a dispute between Mr Marr and his employer,
Telstra. The Committee does not intend to recount details of the long-standing
dispute in this report but, in order to explain the context in which it
has made its finding in respect of this first claim, it draws attention
to all the submissions in the volume of documents. For its own purposes,
it considered the chronology of events as set out in those documents.
11. Having examined the actual words spoken by Mr Krasnostein
at the ERCA Committee hearing of 27 June 1995, it concludes that in fact
he did not mislead the ERCA Committee in the manner suggested. At no stage
did Mr Krasnostein himself allege that Mr Marr had threatened Telstra
employees and their families: he gave an explanation, in response to Senator
Calvert's question, of the reasons for the provision of protective services
to those employees. In other words, it is reasonable to conclude that
Mr Krasnostein's purpose in answering Senator Calvert's question was to
recount the reasons for the provision of these services. He did not himself
indicate whether the fears of the employees were justified, and nor did
he make any allegations that any threats had been made.
12. This second claim was based on the following exchange during the
hearing of 27 June 1995:
Senator Calvert: Could I also table a letter on 27 March 1995
from yourself, which was addressed to Mr Marr. The letter from you raises
concerns about a possibility that Mr Marr and Mr Miles - who you would
be aware of - may have come into possession of material which you considered
to be confidential. Why were you compelled to write such a letter? Mr
Krasnostein: At a meeting I attended with Mr Miles and Mr Marr,
I was shown by Mr Miles an internal Telecom document obtained from Telecom
internal computers. It was a document that I believed at the time could
not have been obtained through any means other than means that would
have been unlawful. I challenged Mr Miles and Mr Marr to provide a satisfactory
explanation as to how they came by computer records of a Commonwealth
agency like Telstra. Mr Miles and Mr Marr refused to give a satisfactory
explanation. Security of the computer systems of our company, like those
of other government agencies, is a matter of serious concern. They chose
to show that document to me in my capacity as chief legal officer. I
took that matter extremely seriously. I demanded an answer. I did not
receive an answer. I was later informed by Mr Marr that he had provided
a full and satisfactory explanation to the Commonwealth ombudsman. I
then gave him and the Commonwealth ombudsman an opportunity to provide
that answer. No satisfactory answer was forthcoming. I repeated the
demand again to Mr Marr to provide a satisfactory explanation. He failed
to do so and we have had no alternative but to place this matter with
the Australian Federal Police for immediate investigation by the Computer
Crimes Division to see if we can obtain an answer as to how this document
was obtained from our computer records.[13]
In this case, some explanation of the circumstances giving rise to the
claim by Messrs Marr and Miles is required.
13. Mr Krasnostein asserted at the ERCA hearing that, at a meeting held
between him and Messrs Marr and Miles on 24 March 1995, Mr Miles improperly
produced an internal Telstra e-mail from Mr Krasnostein to another Telstra
lawyer. Also on 24 March, following the meeting, Messrs Miles and Marr
complained to the Ombudsman that they had been wrongfully accused by Mr
Krasnostein of breaking into Telstra's internal computer system. On 27
March 1995, Mr Krasnostein wrote to Mr Marr, reiterating the request for
him to explain how he came to have the e-mail in his possession and requesting
the return of the document by noon the following day.[14]
Mr Miles replied, stating that the Ombudsman knew how the e-mail had been
obtained. Mr Krasnostein then wrote to the Ombudsman on 29 March 1995,
seeking the explanation from her.[15]
14. On 30 March 1995, Mr Marr volunteered a written explanation of his
possession of certain documents to the Chief Executive Officer of Telstra,
Mr Frank Blount:
In the spirit of co-operation and reasonableness I am prepared to set
out, to you, the circumstances of the acquisition of those documents.
At the outset I should state that I have a large number of documents
relating to my wrongful dismissal and the vast majority of those documents
were authored by Telstra personnel. My acquisition of these documents
has been over a number of years and through various Courts and Tribunals.
During proceedings in the Federal Court before Justice Hill a subpoena
was issued against Telstra and as a result I was disclosed a large number
of Telstra documents. A further subpoena was issued against Telstra
during proceedings before the IRC and again I was disclosed numerous
documents. Also under an FOI application the Administrative Appeals
Tribunal ordered that Telstra disclose to me another large volume of
documents. More recently during the independent review conducted by
the Hon Kenneth Marks Q.C., Mr Marks in accordance with the rules of
natural justice and procedural fairness directed that all documents
that were forwarded to him also be made available to me.[16]
15. The Marks inquiry had been established to examine whether the procedure
by which Telstra dismissed Mr Marr had accorded with natural justice principles.
Mr Marr did not specify which of the above possible sources was the source
of the e-mail Mr Miles produced in the meeting of 24 March 1995.
16. Telstra searched its records to verify Mr Marr's claim. On 4 April
1995 Telstra special counsel Ms Joy Geary wrote to Mr Marr, stating 'My
enquiries have also determined that there were no e-mails from David Krasnostein
contained in the documents given to the Honourable Kenneth Marks QC'.[17]
This information was wrong, and Ms Geary had been so advised on 31 March
1995. Ms Geary did not acknowledge this until January 1996, advising Mr
Marr in a letter of that date that she had discovered her error only in
December 1995.[18]
17. In response to complaints from Messrs Marr and Miles concerning Mr
Krasnostein's conduct during their meeting on 24 March 1995, the
Ombudsman's office also searched the files. Its senior investigator Geoff
Burton on 6 June 1995 advised Telstra's Corporate Secretary, Michael Montalto,
as follows:
I decided to independently establish whether the document provided
to me by Mr Miles was also included in the documents provided to the
Hon Kenneth Marks QC. If it was, then, as those documents were duplicated
and provided by Telstra's solicitors to Mr Miles and Mr Marr, this would
tend to substantiate Mr Miles' assertion that the document was obtained
lawfully and might resolve Mr Krasnostein's concern over provenance.
These documents in volume form were provided me in May by Mr Robertson.[19]
Mr Robertson was a partner with Holding Redlich, which represented Telstra
during the Marks inquiry. Mr Robertson also responded on Mr Krasnostein's
behalf to the Committee of Privileges, and had earlier conducted an inquiry
into Telstra's handling of the Marr matter.
18. The Ombudsman's reply to Telstra continued:
I subsequently examined the volumes provided and located the duplicate
copy of the document provide [sic] to me by Mr Miles. I found it was
part of the series of E mail documents described to me by Mr Miles,
and in the volume he identified beforehand. I then considered its content.
In their earliest accounts to me of their meeting with Mr Krasnostein,
Mr Miles and Mr Marr had separately said that they challenged Mr Krasnostein's
contention that he supported and was responsible for initiating the
Marks Inquiry. They said that Mr Krasnostein took exception to this
and demanded proof. They in turn produced what they believed was documentary
proof of his opposition. It was this document (an Internal E-mail) that
Mr Krasnostein alleged was not lawfully obtained. A copy of the E-mail
subsequently given to me by Mr Miles is attached. This E-mail is not
inconsistent with Mr Miles' and Mr Marr's contention that Telstra and
Mr Krasnostein were opposed to the holding of an inquiry.[20]
19. This seems to be a reasonable explanation, from an independent agent,
of the provenance of the e-mail. In contrast, the Committee draws attention
to Mr Krasnostein's response to Senator Calvert's question at the estimates
hearing of 27 June 1995, in which he declared that no satisfactory
answer concerning the provenance of the e-mail had been forthcoming from
Mr Marr or the Ombudsman.[21]
20. In his first submission to the Committee of Privileges, Mr Krasnostein
responded that he had 'made no statement that Mr Marr or Mr Miles had
engaged in criminal conduct by obtaining internal Telstra e-mail'.[22] The Committee does not dispute this assertion.
However, the ERCA Legislation Committee was, in the view of the Committee
of Privileges, entitled to draw the implication from his statement that
there was some illegality in the provenance of the e-mail--and yet Mr
Krasnostein was at the time of the 27 June hearing aware of the Ombudsman's
conclusions on the matter. Mr Krasnostein's advice to the ERCA Legislation
Committee that he had initiated an Australian Federal Police (AFP) inquiry
on 21 June 1995, even after receipt of the Ombudsman's report, reinforced
the impression that the e-mail had been illegally obtained.
21. Initially, it appeared to the Committee that his action in
drawing in the AFP was unusual, particularly given that
an internal Telstra inquiry had already shown no illegal accessing of
Telstra computers. However, when Mr Krasnostein had first checked, late
in March 1995, the Miles/Marr claim that they had received the document
through the Marks inquiry, he had been advised by Telstra staff that no
e-mails from him had been given to the inquiry. By the time he gave evidence
to the ERCA Legislation Committee, he had convinced himself that the document
produced by Mr Miles at the meeting of 24 March 1995 was different from
the document discovered by the Ombudsman's office in the Telstra files
provided to the Marks inquiry.
22. It appears to the Committee that between the meeting with Messrs
Miles and Marr of 24 March 1995 and the ERCA Legislation Committee hearing
of 27 June 1995 Mr Krasnostein had become so certain that Mr Miles and
Mr Marr had behaved improperly in accessing the Telstra e-mail that no
reasonable alternative explanations, as provided to him, particularly
by the Ombudsman's office, could remove this certitude. The result was
that the ERCA Legislation Committee may have been left with the impression
that Messrs Miles and Marr had indeed been engaged in illegal activity.
The question for the Committee is whether Mr Krasnostein in conveying
this impression intentionally misled the ERCA Committee.
23. On the basis of the evidence before it, the Committee is unable so
to conclude. It appears that Mr Krasnostein was single-minded in his conviction
that the document produced by Mr Miles and Mr Marr at the meeting of 24
March was improperly obtained, particularly when checks made on his behalf
appear to have convinced him that there were no alternative explanations
for their possession of the document. On the face of it, it appears to
the Committee that Mr Krasnostein, who it must be recalled had no direct
knowledge of the matters previously involving Mr Marr and Telstra, was
ill-served by his support staff, given their declarations in March and
April that no e-mails from Mr Krasnostein had gone to Mr Marks.
24. It was therefore not unreasonable for Mr Krasnostein to have concluded
initially that the explanation by Messrs Marr and Miles was incorrect.
That he persisted in this claim following the Ombudsman's report in June
might be regarded as surprising. However, it is clear to the Committee
that his conviction was honestly held, and goes some way towards explaining
his evidence to the ERCA Legislation Committee.
25. In the light of the information provided to the Committee of Privileges,
it has concluded as follows: In respect of claim (a)--no misleading
evidence was given by Mr Krasnostein to the Senate Environment, Recreation,
Communications and the Arts Legislation Committee, in that any allegation
that Mr Marr had threatened Telstra employees was not made by Mr Krasnostein.
The Committee is not therefore required to establish whether any such
allegation is false. The Committee has concluded that no contempt of the
Senate is involved in this matter.
In respect of claim (b)--the effect of Mr Krasnostein's evidence
was to mislead the Senate Environment, Recreation, Communications and
the Arts Legislation Committee, in that the Committee was left
with the clear impression that there were grounds for suspicion that Messrs
Geoffrey Marr and Paul Miles had illegally acquired a Telstra internal
e-mail. The impression was further compounded by Mr Krasnostein's announcement
at the estimates hearing of the instigation of an AFP inquiry
and his declaration that no satisfactory explanation of the acquisition
of the document had been provided by either Mr Marr or Mr Miles or by
the Ombudsman.
26. The Committee has concluded, however, that Mr Krasnostein's preoccupation
with an alternative, although in the Committee's view unreasonable, explanation
for Messrs Miles' and Marr's acquisition of the document convinced
him that he was answering questions posed at the Environment, Recreation,
Communications and the Arts Legislation Committee hearing accurately
and without any intention to mislead the Committee.
27. The Committee has therefore concluded that, in this matter also,
no contempt of the Senate should be found.
28. The Committee, in examining the matter referred to it, noted that
matters relating to Mr Marr had been raised over a considerable period
of time, both within the Senate and in the Environment, Recreation, Communications
and the Arts Legislation Committee and its predecessors. It appears
to the Committee, from the record of matters raised, that Telstra officers
over that period seemed both surprised and ill-prepared when the questions
raised in respect of Mr Marr were pursued. The result was a period of
frustration for senators interested in the subject generally, and in particular
for the most persistent questioner on the matter, Senator Calvert. The
Committee was struck by the number of matters taken on notice and the
modifications of those written answers in subsequent answers, culminating
in a written instruction to Telstra by the Minister then responsible for
the organisation, the Honourable Michael Lee, to ensure that accurate
information be provided in response to Senate questions on notice.[23]
29. As Senator Calvert has, in the Committee's view rightly, pointed
out:
an ongoing point of frustration in my dealings with Telstra was their
continual rotation of officers at estimates hearings. I was constantly
hindered in my ability to gain answers to questions because officers
indicated that they had no knowledge of the prior history in matters
to which I was referring. I believe it would greatly assist Telstra's
performance at future estimates committee hearings if they were to make
available officers who have at least some knowledge of matters which
have been of ongoing concern to Senators.[24]
30. That the ERCA Legislation Committee itself was concerned about the
inadequacy of evidence given to it is indicated by its decision to hold
a special hearing in respect of the annual report of Telstra, at which
matters previously raised at the estimates hearing on 27 June 1995 were
again canvassed.[25] Answers to questions at this hearing continued
to be unsatisfactory, and the absence of any person with a capacity to
answer questions previously raised by Senator Calvert was only too painfully
obvious.
31. Given this pattern of behaviour, it is not surprising to the Committee
of Privileges that senators and others have had some difficulty in determining
whether the organisation has deliberately misled the Senate and its committees.
This Committee's tentative judgment, which is to some degree reflected
in its conclusions above, is that, rather than setting out deliberately
to mislead, the organisation is inappropriately equipped to deal with
its accountability responsibilities to each House of the Parliament and
its committees.
32. In the Committee's experience, this is not unusual, as evidenced
by several of its previous reports. In this regard, it draws particular
attention to a resolution adopted by the Senate on 21 October 1993, following
its less than flattering report on another statutory organisation, as
follows:
That the Senate is of the opinion that all heads of departments and
other agencies, statutory office holders and Senior Executive Service
officers should be required, as part of their duties, to undertake study
of the principles governing the operation of Parliament, and the accountability
of their departments, agencies and authorities to the Houses of Parliament
and their committees, with particular reference to the rights and responsibilities
of, and protection afforded to, witnesses before parliamentary committees.[26]
The Committee appreciates that certain departments and agencies have
already taken positive steps to respond to this resolution. The Committee
encourages other executive departments and agencies to make a concerted
attempt to follow suit.
33. The Committee also reminds officers of statutory authorities of the
long-standing resolution of the Senate in respect of statutory authorities
generally:
That whilst it may be argued that Statutory Authorities are not accountable
through the responsible Minister of State to Parliament for day-to-day
operations, they may be called to account by Parliament itself at any
time and that there are no areas of expenditure of public funds where
these corporations have a discretion to withhold details or explanations
from Parliament or its Committees unless the Parliament has expressly
provided otherwise.[27]
34. This statement of principle, first enunciated in 1971, has been reaffirmed
on several occasions since, and the Committee recommends that it
again be asserted.
35. The Committee finds that no contempt of the Senate has been committed
in respect of the matter referred to it.
Robert Ray
Chairman
Endnotes
[1] Journals of the Senate,
9 September 1996, p. 532; see Submissions and Documents, p. 219.
[2] Senate Hansard,
22 August 1996, p. 2873; Journals of the Senate, 22 August 1996,
p. 491; see Submissions and Documents, pp. 217-218.
[3] The domestic trading name
of Telecom Australia changed to Telstra in July 1995. The latter name
has been used throughout this report.
[4] Submissions and Documents,
pp. 1-4.
[5] Submissions and Documents,
pp. 27-29.
[6] Submissions and Documents,
p. 213.
[7] Submissions and Documents,
p. 30.
[8] Submissions and Documents,
pp. 5-6.
[9] Submissions and Documents,
p. 216
[10] Journals of the Senate,
22 August 1996, p. 491; see Submissions and Documents, p. 218.
[11] ERCA Legislation Committee,
Hansard, 27 June 1995, p. 210.
[12] Submissions and
Documents, p. 166.
[13] ERCA Legislation Committee,
Hansard, 27 June 1995, pp. 215-216.
[14] Submissions and
Documents, pp. 72-73.
[15] Submissions and
Documents, pp. 186-187.
[16] Submissions and
Documents, pp. 188-189.
[17] Submissions and
Documents, pp. 190-191.
[18] Submissions and
Documents, p. 155.
[19] Submissions and
Documents, p. 79.
[20] Submissions and
Documents, pp. 79-80.
[21] ERCA Legislation Committee,
Hansard, 27 June 1995, pp. 215-216.
[22] Submissions and
Documents, p. 168.
[23] Submissions and
Documents, pp. 205-6.
[24] Submissions and
Documents, p. 212.
[25] ERCA Legislation Committee,
Hansard, Review of the annual reports for 1994-95 of Telstra Corporation
and the Australian Postal Corporation, 17 November 1995.
[26] Journals of the
Senate, 21 October 1993, p. 684.
[27] See Standing Orders
and Other Orders of the Senate, February 1997, p. 130.