by Chris Griffith
Written October 1994
According to documents, a major United Kingdom lottery conglomerate even offered the government employee's private company a shareholding with a seat on its board in October 1991.
The documents indicate further conflicts of interest, as the official was a director of a Government-owned company running Casket's overseas promotion at the same time he was a director and secretary of his own private company acting in the same market.
And a solicitor who gave legal advice to the Golden Casket Art Union Office on behalf of a Brisbane legal firm also participated in the private company - taking its minutes, compiling its business plan, and signalling a personal stake in the venture.
And there is evidence, too, that some participants believed the new private company, aimed at securing a personal benefit for the participants, would enjoy favourable status with the Golden Casket Art Union Office.
The employee, Mr Mark Harrison, yesterday admitted to running his private company while employed as a director of the government-owned company Golden Casket Systems P/L, a now-defunct subsidiary of the Golden Casket Art Union Office, but said his private venture did not get off the ground and lasted only two months.
The private company, Transaction Technology International Pty Ltd, or TTI, was formed in September 1991 at a time Golden Casket sought multi-million dollar gaming contracts to export locally-developed lotto technology and know- how to the UK, Ireland, the Canary Islands, and Europe.
This drive, monitored by a Government interdepartmental committee, especially targetted the one-off windfall Eastern Europe gambling markets of Hungary and the Ukrain opened after the fall of communism. But no contracts eventuated.
Mr Harrison's company, TTI, was registered following a secret meeting of private-industry computer officials, Brisbane lawyer Bruce Purdue, Mr Harrison, and another Golden Casket employee, Mr Mervyn German.
TTI was registered at Mr Harrison's home address and Mr Harrison was company secretary and one of two company directors.
Mr German and Mr Harrison also held senior government positions with the Golden Casket. Mr German was the manager of Golden Casket Systems P/L, and both men were directors of this government company.
According to hand-written minutes, the meeting proposed the private company be owned equally by those present and sought details of the potential for everyone's involvement. They decreed "no discussion with outsiders, no loose lips, and no loose cannons".
The meeting's minutes were written by lawyer Bruce Purdue, who at that time also held a government role - as a legal adviser to the Golden Casket Art Union Office on behalf of Brisbane firm Clarke and Kann.
The other director of TTI was Mr David Smith, a private industry representative who worked for Tandem Computers Pty Ltd. Mr Smith earlier that year led a Queensland lotto trade mission to Europe.
Yesterday Mr Smith said he regarded TTI's activities as unethical which is why he pulled out as a director after only five weeks. "As its plans were unveiled it became obvious there would be a conflict of interest and it didn't attract any funds," he said.
Treasurer Keith De Lacy said he knew nothing of TTI, nor of its activities, and a senior partner of Clarke and Kann, Mr Ross Clarke, said his firm has never acted for TTI, and he knows nothing of Mr Purdue's involvement in it.
However the Opposition spokesman on Tourism, Sport, and Racing, Mr Mick Vievers said an inquiry was needed into Queensland's lottery industry "in the national interest".
Mr Purdue is in Europe and could not be contacted.
Yet the documents include meeting minutes and a business plan proposal hand-written by Mr Purdue, including a reference by him to the beneficial relationship that could exist between the privately operated TTI and the Golden Casket Art Union Office.
They indicate it was clear the private company, involving at that time at least one public servant, was contemplating business with the organisation to which the public servants owed their government jobs.
For example, a hand-written fax from Mr Purdue to Mr Harrison in September 1991 noted "TTI's distinctive edge is its `association' with GC [Golden Casket] - this is the competitive advantage," it said.
The document listed TTI's "strengths" as its access to GC technology, its established contacts and knowledge of the market. Its "threats" included "GC, Treasury, competitors ... and adverse publicity".
Mr German, the public servant who managed Golden Casket Systems, yesterday denied any involvement in TTI other than at the secret September 3 meeting.
But he did confirm a reference to him in the minutes, namely: "willing to make a commitment BUT will not move until retirement, expected in 1992. Will move to the new company, but precise role to be agreed. The parties consider `MG' can be accomodated."
Mr German said he was concerned about the activities of Mr Harrison and the private company but said its formation was born out of frustration with government middle management hindering operations.
"It [ TTI ] was in lieu of GCS - if GCS didn't proceed."
Mr Harrison yesterday admitted to forming the private company, but said he saw no conflict in pursuing his government and private interests simultaneously as nobody knew whether Golden Casket's overseas promotional activities were "going to be private sector or public sector run".
"It had a life of about four to six weeks - that's it. It didn't do anything," he said.
Yet documents indicate TTI pursued its own interests overseas as on October 16, 1991, Winchester Cox and Company Limited, a major UK lotto company, faxed Mr Harrison and Mr German inviting TTI to "become a shareholder ... with a seat on the Board".
Mr Vievers said: "Even the merest suggestion that there has been any impropriety of any kind whatsoever in the operation and administration of the Golden Casket Art Union Office has absolutely terrifying implications."
"It literally makes the hairs on the back of my neck stand on end to learn that questions have been raised about its tendering process, about associations of the Casket Office with outside organisations, and about matters of self-interest and conflicts of interest," he said.
Opportunity went beggingIn the early 1990s Queensland had an unprecedented opportunity to gain lucrative overseas lotto markets, according to a memorandum by Queensland's Agent-General in London, Mr Ray Anderson.
In early 1991 Mr Anderson travelled Europe with Queensland private industry and government employees. Their mission was to seek partners for the state's attempt to corner the multi-million dollar European lottery market, especially those in Eastern Europe thrown open after the fall of Communism.
In August 1991 Mr Anderson reported: "Significant demand exists for gaming operations systems and equipment in Hungary, the Canary Islands, Germany, and the U.K. and probably in most other European countries as well".
But he warned: "The window of opportunity is closing fast for ... the Queensland terminal".
The two government employees who travelled with Mr Anderson were Mr Merv German and Mr Mark Harrison. Both were directors of the government-owned company Golden Caskets Systems Pty Ltd, a subsidiary of the Golden Casket Art Union Office.
Both were regular participants in the State Government's interdepartmental committee meetings chaired by David Barbagello, at that stage Premier Wayne Goss' advisor on Information Technology and Telecommunications.
However documents indicate both also attended a meeting in September 1991 to discuss the formation of a private company, with personal benefits to all who participated. The company, Transaction Technology International P/L, or TTI, was formed by Mr Harrison three days later.
Mr Harrison said the company lasted just six weeks, and did nothing.
Yet according to the documents, TTI pursued its own interests overseas as on October 16, 1991, Winchester Cox and Company Limited, a major UK lotto company, faxed Mr Harrison and Mr German inviting TTI to "become a shareholder ... with a seat on the Board".
Among the documents are meetings minutes, advice, and a business plan proposal, drawn up by lawyer Mr Bruce Purdue.
Mr Purdue at that time was also advising the Golden Casket Art Union office, as a lawyer working for Brisbane legal firm Clarke and Kann.
In his correspondence to Mr Harrison, Mr Purdue referred to the private company's standing with Golden Casket. He noted TTI's distinctive edge is its `association' with GC [Golden Casket] - this is the competitive advantage," he said.
However others were sceptical, for example Mr Rod Dux, the managing director of Gold Coast computer board supplier TRAC Systems, who also attended the secret meeting.
On September 9, Mr Dux wrote to Mr Harrison saying: "TRAC cannot understand why GCAU [the Golden Casket Art Union] would release the rewarding facility management of Bill Pay to TTI under the currently proposed arrangements.
"This would make sense if GCAU had some form of share holding in TTI and thus could benefit in some way from handing over facility management. GCAU would then seem to be bank rolling TTI with some perceivable benefit."
By mid October the TTI juggernaut had apparently ground to a halt after private companies declined shareholdings and director David Smith resigned. According to Mr Smith, the company had no money.
On September 25, 1991 the Director of the Golden Casket Art Union Office, Mr Kevin Leyshon, formalised an agreement with the government enterprise - Golden Casket Systems P/L, to market lotto applications software and to delegate that right.
Regular attendees at the indepartmental committee which oversaw the project were Mr Barbagello (chair), the Assistant Under Treasurer, Mr Glenn Poole, the then Acting Director of the Golden Casket Art Union Office, Mr Warren Bale, Mr German, Mr Harrison, along with other treasury and Premier's Department representatives.
Aims of the partiesOn September 2, 1991, two senior government employees of the Golden Casket Art Union Office met secretly with private industry representatives to discuss forming their own private company aimed at personally benefitting all involved.
The company, Transaction Technology International P/L, was formed three days later.
Here's what the meeting noted about their proposed personal involvement, according to hand-written notes by lawyer Bruce Purdue, who at that time also gave legal advice to the Golden Casket Art Union Office.
According to the minutes, six people attended: Mr Mervyn German and Mr Mark Harrison (Government employees attached to Golden Casket), Mr Purdue, Mr David Smith, from Tandem Computers (a former Queensland industry trade mission leader), and Mr Rodney Dux and Mr Tony Chand, representatives of the Gold Coast manufacturer TRAC Systems Pty Ltd.
The meeting was held under struct confidentiality: "no discussion with outsiders, no loose lips, and no loose cannons."
Mr Bruce Purdue, solicitor, who worked for Clarke and Kann:
"has existing professional career. Invited by Merv German & Mark Harrison and can bring legal/business/ management skills to a new company; BUT must proceed carefully."
"If carefully planned, professionally executed and new company shown to be viable and profitable, willing to make commitment: may be gradual/immediate, as circumstances dictate."
David Smith, industry representative from Tandem Computers Pty Ltd:
"Different approach based on two issues: 1.What will each party bring to a new company? 2.Can I/do I want to go into business with other parties?"
Merv German, Government employee, manager and director of Golden Casket Systems P/L, a government-owned Casket subsidiary:
"Willing to make a commitment, BUT will not move until retirement - expected in 1992. Will move to the new company, but precise role to be agreed. Parties consider MG can be accomodated."
Mark Harrison, Government employee, director of Golden Casket Systems P/L, a government-owned Casket subsidiary:
"Considers that the new information technology under discussion/new company are viable. Willing to move quickly if necessary. We have the right mix of people."
Rod Dux and Tony Chand, representatives of TRAC Systems (Australia) P/L:
"TRAC will remain separate. TRAC still needs to be convinced of viability of a new company. Will make initial commitment."