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- 25 June 2001
NRMA Chairman Mr Nicholas Whitlam
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Page: 15207
Mr E. T. PAGE (Coogee) [5.38 p.m.]: Constituents of mine who are longstanding members of the NRMA are concerned about the amount of money the organisation is spending on legal fees without board approval. The NRMA has stepped up its consumption of legal services with the launch of a spate of actions that, while delivering big bags of money to lawyers' bank accounts, are of questionable value to the ordinary NRMA member who is facing a 10 per cent hike in membership renewal this year, branch closures and the payment for services—such as accommodation guides— which used to be free. NRMA Chairman Nick Whitlam has two separate actions against former adviser Robert Dempsey: one for alleged breach of confidentiality over the leaking of some of Nick Whitlam's personal faxes and one for alleged defamation when, having been accused of leaking those same documents, Dempsey denied the accusation and defended himself in the media.
The NRMA is suing Channel 9 over a recent program exposing a number of questionable transactions and a 1998 annual general meeting voting irregularity which would have given every director a $10,000 pay rise and trebled that rise for the chairman, Nick Whitlam, who was in charge of the proxy votes. The subject of the program was Nick Whitlam, not the NRMA, and the legal action is being taken by Whitlam without NRMA board approval. The transactions and the voting irregularity are currently the subject of a major investigation by the corporate regulator, the Australian Securities and Investments Commission [ASIC], and I await its report and action. More recently the NRMA has taken its sister company, NRMA Insurance, to court over what it claims is a breached agreement over the proposed closure of 21 branches.
This matter should never have gone to court and should have been settled by negotiation. During the case the legal representative of the insurance company pointed out to the judge that the legal action taken by the motoring arm was undertaken without board approval. My questions are: Why are there so many separate court actions, which are only to silence critics of the NRMA and of Chairman Nick Whitlam? Who is paying for these actions? The first two actions emerge from the breakdown in the business relationship between Nick Whitlam and his former strategic adviser, Dempsey. The documents sought relate to personal faxes sent by Whitlam to others, including Dempsey, while Whitlam was overseas and relate to Whitlam's ambition to be given the $1 million-plus job of acting chief executive officer three years ago.
Acting for Whitlam in these two actions are the NRMA's lawyers, Corrs Chambers Westgarth. A number of questions have been asked by members of the board as to who is paying for these actions, but the NRMA has been silent on that question. Can I have the NRMA's assurance that Whitlam, and not the NRMA, is picking up the tab for this private spat between him and his former adviser? The action against Channel 9 was launched by the NRMA in recent weeks and I seek the NRMA's assurances that this potentially very expensive action is being taken in the best interests of the NRMA and not because Nick Whitlam was embarrassed by the program or because it exposed the sources of funding for his and his factions 1995 board election campaign. None of these actions was put to the board for approval before the commencement of legal action.
None of the board members involved in this matter ever disclosed any interest in it. Half of the NRMA board is now heading for another election. A longstanding member of the NRMA, Bill Snodgrass, has been trying without success to discover who funded the 1999 election campaign when the NRMA's advertising agency Saatchi and Saatchi provided heavy advertising exposure to the Whitlam-led Members First team. There were other suppliers of services, including printers and distributors, who provided free or discounted services to the Whitlam team during the 1995, 1997 and 1999 election campaigns. The 1999 election was a noticeably big spending campaign by Members First and featured billboard, radio and print advertisements that cost hundreds of thousands of dollars.
The Members First faction has never explained where those funds came from, and Snodgrass's attempts to obtain that information for members by calling a special general meeting—now seven months ago—has been thwarted by the NRMA's legal stonewalling. The matter will go to the Court of Appeal for hearing in September, but by then the current election campaign will be almost over, again without any disclosure as to where candidates obtained their funding and services to run the campaign; how much was obtained; and whether any of the donors are also suppliers of services to the NRMA. This action has been taken by the Whitlam-controlled NRMA board without ever having received board approval.
It now appears that the resolution requiring directors to expose their election funding will not be able to be put to a meeting of NRMA members before November, by which time the current half board election campaign will be over. It will be too late to get that information. I am concerned, as my constituents are, about the legal action that has been taken by the NRMA without board approval. I now call on ASIC to investigate the bringing of these legal actions without board approval and the use of NRMA members funds for personal vendettas.
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