THE RailCorp second-in-command, Gary Seabury, has been told to resign or face the sack from his $379,000 position following the most damning corruption inquiry conducted into NSW railways.
The RailCorp board, led by the former chairman, Ross Bunyon, and the former chief executive, Vince Graham, failed to manage properly the $17 billion state-owned corporation, letting "endemic and enduring corruption" flourish, according to a withering report by the Independent Commission Against Corruption.
Both Mr Bunyon and Mr Graham quit during the inquiry.
In a long-awaited report into RailCorp, released yesterday, ICAC recommends sweeping changes including a spill of the board, reviewing the chief executive’s position, an internal restructure and even new responsibilities for the Transport Minister, David Campbell.
More than $21 million was lost to graft and fraud during the period covered by the inquiry. The commission has recommended more than 660 charges against 33 staff and contractors, and it made 97 separate corruption findings against 31 people.
"Ultimate responsibility for preventing corruption in this critical public organisation is shared by RailCorp’s CEO, the RailCorp board and the Minister for Transport. It is incumbent upon them to break with past practices and improve oversight and action regarding corruption prevention," the report says.
It recommends reviewing the responsibilities of the proposed RailCorp Advisory Board, the chief executive and the minister "to determine whether they need to be restructured to better ensure financially responsible management that would limit the opportunity for corruption".
This is the seventh ICAC inquiry into the railways since 1992, and all have focused on procurement and improper relationships with contractors.
The report found that corruption was widespread despite the repeated findings of past investigations. "It is clear that the importance of preventing corruption in RailCorp was not a priority for the senior executive team," the report says.
"The commission’s investigation exposed endemic and enduring corruption in RailCorp … at many levels."
Like Mr Graham and Mr Bunyon, Mr Seabury, the group general manager of RailCorp’s asset management group, was not accused of involvement in any of the scams the commission uncovered.
But the report has found that "managerial competence" was so poor that all senior positions in his division undergo a review, with the jobs filled externally by candidates "with a demonstrated record in management and probity".
It also recommended that Mr Seabury’s position be similarly reviewed, and an independent expert be appointed for up to five years to oversee an overhaul of his division.
"It’s been agreed by the CEO and myself that that particular officer will be stood aside while there is further consideration to the implications of this report," Mr Campbell said yesterday.
But the Herald understands Mr Seabury’s name was put on a hit list within the Department of Premier and Cabinet more than a week before the report was delivered to Government, along with that of Fran Simons, a former head of human resources at the organisation.
Ms Simons was given notice last Friday. Her removal was not linked to the investigation but to the Government’s pledge to trim the senior public service.
At least two other general managers at RailCorp have also been dismissed as part of the cuts, and the Herald has been reliably informed there are several others to come.
Mr Seabury was told yesterday by the new chief executive, Rob Mason, that he should either resign or face dismissal.
The commission also found the Government must share responsibility for the devastating findings, after a string of poor decisions about how the railways were organised.
The Government gave only nine months’ notice of the 2004 merger of the former State Rail Authority and the Rail Infrastructure Corporation.
"The merger was consequently poorly planned and implemented," the report says.
"Opportunities for corruption were created through management and general staff having unclear roles."
Mr Campbell said he would ask the Auditor-General to advise on the implementation of the report’s recommendations.