29 September 2013

Affinity and embezzlement

'HJ (Iran) and Another - Reflections on a New Test for Sexuality-Based Asylum Claims in Britain' by Janna Maria Wessels in (2012) 24(4) International Journal of Refugee Law 815 comments that
The case HJ (Iran) and HT (Cameroon) v Secretary of State for the Home Department [2010] UKSC 31 was celebrated as a ‘fundamental shift in asylum law’. In this decision, the UK Supreme Court rejects the ‘reasonably tolerable test’ that had been applied in the case of the gay men HJ, a 40-year-old Iranian, and HT, a 36-year-old citizen of Cameroon. On the basis that the claimants could be reasonably expected to tolerate being discreet about their sexual identity in order to avoid persecution, their applications had been unsuccessful. This ‘reasonably tolerable test’, which was fairly well established in case law, was much contested and its rejection was overdue. Yet in their decision, the Justices not only reject this old test, they go a step further and formulate a new approach to be followed by tribunals in asylum claims on grounds of sexual orientation.
This article argues that this new approach fails to discard ‘discretion’ as a concept in asylum cases as a whole, contrary to the submissions of the intervening parties in the case, namely, UNHCR and the Equality and Human Rights Commission. The new test continues to be constructed on ‘discretion logic’ – which is not tenable for a series of reasons. First, the test creates two distinguishable categories, openly demonstrated sexuality and concealed sexuality. Secondly, it assumes that this distinction and the underlying choice are relevant for assessing whether the applicant is at risk of persecution. Finally, the case relied heavily on the subjective element of assessing the ‘fear’ of persecution, which leads to a stricter test than necessary. The assessment of the existence of a well-founded fear of persecution in LGBT cases should instead be made without reference to whether or not the applicants would conceal their sexual orientation.
Last year I noted the exposure of Hohepa Morehu-Barlow, the Queensland Health manager who snaffled a mere $16.69 million between 2007 and 2011, an appropriation disguised by claims that he was a Taghitian or Maori prince. In March this year he was sentenced to 14 years' imprisonment after pleading guilty to eight offences that including aggravated fraud and forgery.

A report by the Queensland Crime and Misconduct Commission has now attributed the fraud to
  • low-levels of compliance with existing policy and procedures by other staff;
  • failures of financial management and accountability;
  • failures in supervision and management;
  • low awareness of the risk of fraud among staff at all levels; and
  • failure to properly investigate information provided in audits and complaints and evaluate that information in a wider context.
Fraud, financial management and accountability in the Queensland public sector: An examination of how a $16.69 million fraud was committed on Queensland Health states
Queensland Health (QHealth) identified a fraudulent transaction of $11 million of public funds paid to Healthy Initiatives and Choices (HIC), a trading name registered to one of its own employees, Hohepa Morehu-Barlow (Barlow). Further investigation identified this transaction to be the latest in a series of 65 fraudulent transactions totalling $16.69 million and committed over a four-year period commencing October 2007. 
Barlow’s fraud may be the single largest fraud ever committed in the Queensland public sector. The real cost to the State would be even greater, not only in the initial loss of millions of dollars of public money, but also in the cost of the multiple agencies required for follow-up investigations and recovery action, and in the damage to public confidence in financial management across the public sector. Given the enormity of the fraud perpetrated against QHealth, two key questions arise: • How equipped were QHealth’s management systems and internal controls to handle the risk posed by an employee intent on committing fraud? • What can other public sector agencies learn from the QHealth experience? 
This report gives an account of the fraud committed by Barlow over those four years. It provides a narrative of the main events surrounding Barlow’s fraudulent activities between September 2007 and December 2011, and describes the impact of that discovery. It is directed to Parliament and the general Queensland community and, most of all, to senior managers and other employees in the Queensland public service. It aims to: 1. highlight public servants’ responsibilities — and accountability — as stewards of public money 2. raise their awareness of the potential for fraud in the workplace, of their own responsibilities to prevent it and, finally, of the high cost of managerial inaction. 
For that reason, the report includes a summary of the lessons to be learned from the QHealth experience — the factors that allowed the fraud to be committed and remain undetected for so long, as well as recommendations to managers and staff of public agencies.
The report notes that
After the criminal proceedings involving Barlow were finalised, the CMC sought formal orders to have the restrained assets returned to the State, and on 13 June 2013 a forfeiture order of approximately $11.88 million was granted by the Supreme Court in Brisbane. 
The Supreme Court also granted a proceeds assessment order of $20,058,389,8 representing the total benefit derived from Barlow’s fraud. The order offset the value of the forfeited assets against the value of the proceeds assessment order. This returns all possible assets to the State, while recognising the full cost of Barlow’s fraud.
Vetting problems were evident. The CMC indicates that
Joseph Hikairo Barlow was born in New Zealand on 13 February 1975. The curriculum vitae Barlow provided to QHealth stated that he received a number of tertiary qualifications and academic awards in New Zealand between 1995 and 1999. However, inquiries conducted by the QPS confirm that Barlow does not, in fact, possess any tertiary-level qualifications. A Transcript of Academic Record from Victoria University shows that in 1996 Barlow commenced, but failed to complete, a Bachelor of Commerce and Administration and a Graduate Diploma in Professional Accounting. There is no evidence he received any academic awards. 
On 4 August 1999, Barlow was convicted and sentenced in the Wellington District Court for “theft as a servant” and “using a document”. The offences occurred while Barlow was employed in the New Zealand Internal Revenue Department. 
On 10 May 2001, Barlow changed his name by deed poll to Hohepa Hikairo Morehu-Barlow, and on 31 March 2003 he left New Zealand and moved to Australia. In July and August 2003, Barlow was recorded as being wanted in New Zealand for questioning in relation to a fraud committed while employed as a private contractor to a steering group funded by a New Zealand Government department, and in relation to another fraud committed after his employment with a private business was terminated due to theft.
Barlow’s initial employment with Queensland Health Barlow was as contractor in a position obtained through an employment agency. In 2005 he accepted a temporary position as an Assistant Finance Officer. A former colleague said that when Barlow started working for QHealth in 2004 his lifestyle was beyond the means of his QHealth wage. He said Barlow told QHealth employees that he was Tahitian royalty and made it known that he had a trust fund but needed to have a job to access it….
On 29 August 2007, QHealth’s ESU received a complaint alleging that Barlow (under the name Hohepa Morehu-Barlow) had misused an official QHealth vehicle. It was alleged Barlow did not return the vehicle on the date specified in the log book and used the vehicle for an unauthorised purpose. The complaint arose out of a speeding fine. According to the complaints management arrangement in place at the time between QHealth and the CMC, QHealth reported the complaint to the CMC on 4 October as a matter of routine. The matter was referred to QHealth to deal with, and the CMC was to be advised of the outcome of the matter once it was finalised. There was nothing in the first complaint against Barlow that would have identified him as a potentially serious fraud risk. However, due to an extensive delay in QHealth’s handling of this complaint, it was not until December 2010 that Barlow received a letter from an Acting Deputy Director-General (DDG) asking him to explain the allegation. ... 
From September 2007, Barlow began to perform higher duties as an AO7 in the position of Principal Finance Officer (PFO).17 In this position, Barlow gained reporting and monitoring responsibility for QHealth grants cost centres, including the Minister’s Grants in Aid (MGIA) and Non Government Organisation Support (NGOS) cost centres. On 3 October 2007, 12 days after commencing as the PFO, Barlow established Muse Business Inspiration (The Muse) as a QHealth vendor. The Muse was a business registered to Barlow’s neighbours, established to work in the areas of strategy, communications, policy and advocacy, and dealing mainly with not-for-profit organisations and small businesses. Barlow signed the vendor set-up form for The Muse as authorising officer. No vendor address was included in the form and no Australian Business Number (ABN) search was attached to the form. The following day, Barlow authorised the first fraudulent payment of $2200.6120 to The Muse using a GPV. He authorised subsequent fraudulent payments to The Muse on 29 October ($2200.61) and 10 December ($6601.80), bringing the total of money defrauded from QHealth at the end of 2007 to $11,003.02.
The bells weren't ringing, despite  complaints about Barlow’s conduct and work performance
Relatively early in his employment, staff began voicing concerns about Barlow’s poor attendance and work performance. This would be a recurring pattern throughout his time at QHealth.
• Finance Officer 3 said Barlow was never in the workplace before 10 am and was a very inconsistent worker. He would disappear for lunch breaks for hours on end and didn’t complete timesheets. Often he would not turn up for meetings. He also generated more workload for other staff members as he didn’t respond to requests. Finance Officer 3 said he mentioned his concerns to Barlow’s supervisor, Manager 1, on a number of occasions  and was aware other staff had complained about Barlow’s conduct. 
• An officer who worked with Barlow in 2007 said Barlow was very difficult to deal with: ... because of his spotty attendance at work and he wasn’t very responsive ... For a whole year that I was involved with budgets, we had many meetings with Ho ... He would say he would sort it out, but wouldn’t and in the end we would go through the same thing again and it was never sorted ... 
• Finance Officer 2 said Barlow bullied him and other staff and recalled a number of staff members crying because of the way Barlow treated them. He said Barlow did not complete timesheets, regularly started work late and sometimes left early, and took a lot of leave without pay in block periods; however, he appeared to be on top of his work requirements. 
• Sometime in 2008, Manager 1 asked an officer to reconcile a budget previously managed by Barlow. The officer identified that there were no controls over the payments being made and told Manager 1 that “budgeting wasn’t Barlow’s strong point”. Once he had reconciled the budget, the officer said Barlow bought him a new iPhone to thank him for not making an official complaint about Barlow’s mismanagement of the budget. However, he had refused to accept the gift. The officer also said Barlow regularly arrived at work between 12 and 3 pm, and treated junior staff with contempt — for example, telling them to pick up his dry cleaning and get him coffee. The officer reported both the gift and his concerns about Barlow’s conduct to Manager 1 and another senior officer. He said Barlow’s supervisors tried to deal with his conduct, but Barlow would just take leave to avoid the issue. Manager 1 did not remember any complaints about Barlow’s ability to do his job, but recalled speaking to Barlow twice about his unexplained absences. 
After Barlow was chastised, his attendance improved for a period of time but then deteriorated. When Manager 1 again raised the issue, Barlow explained that he had a serious illness and was having some difficulty coping with the resulting mental and physical demands. Manager 1 said he gave Barlow considerable latitude with leave because of his alleged illness. The considerable extent of Barlow’s leave can be seen in QHealth records: during the period from December 2005 to July 2009, in addition to over 16 weeks of recreation leave, he took over 11 weeks of “other” leave.
Despite the recurring performance and conduct issues, Barlow was permanently appointed as PFO in May 2009. Throughout 2008, he continued to engage in fraudulent behaviour. For example he signed a letter to Queensland Transport in relation to demerit points accumulated by a friend and referred to himself as a “solicitor” and “legal counsel” and in a letter to the Fortitude Valley Police Station  referred to himself as a solicitor for the state government. For his final payment to The Muse, Barlow attached supporting documentation which included an unsigned and undated Ministerial letter, purportedly from the then Minister for Health Barlow acknowledged that he exploited the trust of staff he asked to sign documentation, saying
they all knew me as ... the Prince ... so what would I want with a lousy $200,000 dollars ... So for them you know, maybe trust was a big issue.
Fraudulent payments for “consultancy services”  were paid into Barlow’s neighbours’ joint bank account, with electronic  transfer to Barlow’s bank account. Barlow’s neighbour indicated he never gave Barlow access to or control of this account but said Barlow had the opportunity to obtain the internet banking details when he looked after their apartment in 2006.

Barlow prepared and authorised the vendor set-up process to establish “Healthy Initiatives and Choices” (HIC) as a QHealth vendor. HIC was a trading name registered to Barlow as the individual operator and owner, and was registered to his home address. The ABN was registered two days after the date of the HIC invoice attached to the vendor set-up form.  The QPS established that Barlow opened the bank accounts associated with HIC and had sole access to them. When interviewed by CMC officers, Barlow confirmed he established HIC for the sole purpose of perpetrating frauds against QHealth.
When asked what he considered to be the likelihood of being caught submitting the vendor set-up form for HIC, Barlow said: ... a simple ABN search would have stopped this in the beginning and later, ... it could of easily been found out and stopped had the Finance Business Centre done its due diligence. 
Asked what would have happened if the checks had been done, Barlow said “I would of had to deal with it but it was a gamble”. He said that he thought there was a very good chance the form wasn’t going to get through, but he was prepared to take that risk.
In June 2009 Barlow authorised another two fraudulent payments to HIC, bringing his total fraudulent gains in the first half of 2009 to $482,494. In February he had hosted and paid for his birthday party at a Fortitude Valley bar, which was attended by some QHealth staff and was reported to have cost about $130,000. In  August the CMC received an anonymous email complaint alleging that Barlow (under the name Joseph Hikairo Barlow) was defrauding QHealth and was due to leave Australia on 24 August 2010 “to start a new life of luxury” in Paris. The complaint also listed a number of his aliases.
Based on set criteria established by the CMC, the CMC officer responsible for handling the complaint determined: • The complaint did not meet the criteria of a Category 1 (the most serious) complaint because it did not specify that a substantial amount of money was being defrauded, did not allege that the fraud was being committed by a very senior officer, and did not indicate that the fraud was systemic. • The matter did not involve a public interest disclosure (PID), as set out by the Public Interest Disclosure Act 2010. PIDs about official misconduct can only be made by public sector employees and there was no information to indicate that that was the case. Because the complaint was made anonymously, there was no way to contact the complainant and seek further detail about the allegations. 
Criminal history checks were not done as the complaint concerned an agency whose Ethical Standards Unit included a seconded police officer who could do them. Barlow’s complaints history was not checked, as this was the responsibility of QHealth under the complaints management process in place at the time. 
The CMC officer did not respond in a timely way to the information in the email stating Barlow’s proposed date of departure from Australia. However, that part of the anonymous complaint was not accurate, as Barlow did not in fact leave the country for Paris on that date. As a result, the complaint was not sent to QHealth until the day that Barlow was allegedly intending to leave the country. …
Barlow’s conduct and performance continued to be erratic -
• An officer who worked with Barlow said he “was pretty much always late for work. I don’t think he would have got to work any day before 10.00 am.” 
• A senior officer in Barlow’s previous work unit said he complained to Manager 3 about Barlow’s poor work performance: that he failed to complete normal processes, hardly ever showed up for work, and failed to deliver on what he promised to do.  The senior officer also spoke to Manager 2, Barlow’s direct supervisor in Finance, about Barlow’s poor work performance. The senior officer said he believed that Barlow could not fulfil the functions of the PFO position and thought Barlow provided poor service to his unit.   Manager 2 said the senior officer did not raise any issues with him about Barlow’s work performance. 
• An officer who worked with Barlow said: I used to think it was strange that Ho used to come to work at about eleven o’clock then leave about two and worked so little. He then got promoted to manager of governance. He also used to come into work later after we had all left. He would sign in using Facebook to let everyone know he was working late. 
• Finance Officer 3 was asked to fix some budget reporting problems, which were Barlow’s responsibility. He discovered the budget reports were being “flatlined” (no variance was recorded) and did not reflect the true state of the budgets. Finance Officer 3 said he spoke to Barlow “lots of times” while he was trying to fix the budget reports, and Barlow was “not impressed” with his inquiries. 
• Manager 2 said he had concerns with Barlow’s conduct including timeliness of reports, non-completion of timesheets, and hours worked. He brought these issues to Manager 3’s attention and he assumed that Manager 3 raised the issues with Manager 4. 
• Manager 3 was aware of various issues related to Barlow’s conduct, such as working irregular hours, providing questionable reasons for his sick leave, and not providing payroll forms (such as sick leave and annual leave) despite constant requests. 
• Manager 3 said he often spoke to Manager 4 about his concerns with Barlow, but Manager 4’s response was “well that’s Ho”. He believed Manager 4 defended Barlow and had faith in his abilities.  During the period from August 2009 to December 2010, Barlow took over four weeks recreation leave and over ten weeks of “other” leave. During that period, he was absent from work 23 per cent of the time. Manager 3 said he attempted to address Barlow’s attendance issues.  According to Manager 3, he met with Manager 4 sometime in late 2010 to discuss his concerns about Barlow’s performance, saying he thought he needed to put Barlow on a performance management plan. Manager 3 said Manager 4 said he was going to put Barlow into an AO8 position in Governance. According to Manager 3, Manager 4 said “leave him to me, he’s not going to be a problem anymore, we are going to put him in the Governance role”.  Although Manager 4 says he does not recall this conversation, this move did occur.
And on it goes.

The report notes that
The CMC located an unsigned personal character reference for presentation to an unspecified court, dated 11 January 2011, in which Barlow stated he was a qualified solicitor admitted to the Supreme Court of Queensland and was the “1st son of the Royal Family of Tahiti”. The CMC also located a personal character reference in Barlow’s name for presentation to the Presiding Magistrate, Southport Magistrates Court in relation to a “family friend”. The document was written on official QHealth letterhead and included the qualification “LLB”  in his signature block.