Archive for March 2015

OLGR Investigation of Parramatta Leagues Club

Here at Save City Tatts we take a close interest in rorts and corruption at other clubs.

Lawrence Shepherd went to the Supreme Court last week to contest disciplinary charges by Parramatta Leagues Club (PLC) against him that would have prevented him standing for election.

Shepherd denies all of the charges believing they have been manufactured in an attempt to prevent him being elected.

But what is of particular interest to us is that the Office of Liquor, Gaming & Racing (OLGR) has already investigated Parramatta Leagues Club and produced a 6,000 page report that recommended disciplinary action against 5 directors and employees of the Club.

Here are just some of the findings and recommendations:

  • Former PLC directors Eric Grothe, Sid Kelly, Mario Libertini, Roy Spagnolo and chief executive Bob Bentley are deemed not “fit and proper” to be on a club board and should be banned for three years.
  • There was a failure by the five to “prevent individuals from obtaining a personal advantage from their involvement in a club”.
  • Other improprieties include unauthorised travel and expense claims and improper pay rises and bonuses paid to key staff
  • The report also identified habitual disregard by the Club, Directors, and the Secretary, to the Clubs membership of ClubsNSW and it’s Code of Practice. These contraventions suggested a “culture of regulatory non-compliance at the Club”.

Now, while we should all be grateful that OLGR (and ILGA) have done valuable work here, the reality is that the problems at Parramatta Leagues Club that concerned them so much are trivial compared to what goes on at City Tatts, and has gone on for years:

  • If OLGR spent ten minutes reading past blogs on this site they would have enough to declare Patrick Campion not “fit and proper” to be on the board of any club.
  • For ten years the committee at City Tatts has repeatedly failed to “prevent individuals from obtaining a personal advantage from their involveemnt in a club”. For instance, Tony Guilfoyle’s partner in a motel receiving “consulting” fees from City Tatts.
  • Travel expenses were one of the more obvious rorts at City Tatts, for example $130,000 for five people to go to London, Paris, Dublin and Las Vegas. Although, strange to say, after members questioned the expense the need for overseas travel just vanished.
  • If improper pay rises are a problem at Parramatta then OLGR would have to take immediate action at City Tatts which has been sucked dry by insane salaries. Tony Guilfoyle has been exposed as a total failure, but is paid $600,000 a year. His secretary, Jan Ellks, who might be worth $50,000 a year actually gets $140,000.
  • City Tatts has shown “habitual disregard” of the ClubsNSW Code of Practice in numerous areas since 2007. Have a look at the Johny Bineham case if you want just one example.

All of the above raises the question that has always baffled us – what is it that causes OLGR to take action on one club, while ignoring similar (or worse) problems at another?

Maybe the Club Corruption Vigilante knows.

Save City Tatts Committee

Any improved deal will only expose the Mirvac deal

Tweedledum and Tweedledee might be putting on a brave face but everyone can see City Tatts has become a minefield for any future developer.

Any deal with any developer faces obstacles on every side.

And every potential developer will have the same mixed feelings that Mirvac had – they know they can pick up a prime development site at a bargain price (because Tweedledum and Tweedledee are desperate), but they also know that City Tatts is so rotten it’s probably better not to touch it.

Just consider one of the potential landmines.

Before the last deal fell over, the committee (led by Tony Guilfoyle) were willing to hand the club’s site to Mirvac for a pittance – mainly in the hope that the development would bury all trace of their role in the destruction of the club.

So the next developer might offer a better deal to get their hands on the site.

But that’s a problem for Tweedledum and Tweedledee (and the committee) – because a better deal will show that the Mirvac deal was so bad for members that it was practically fraud.

So, if any developer is brave enough to take it on, expect the propaganda to claim that the new deal is much better – but at the same time not really all that different to the Mirvac deal!

Save City Tatts Committee

Next Chairman’s Massage – The Accounts!

Tweedledee is working on his next massage – the accounts.

The problem is the money wasted on the failed Mirvac venture and how to conceal this from members.

This was always going to be a problem. Every accountant who follows the decay of City Tatts has been telling us since October that this would be a major headache for Tweedledum and Tweedledee when it came to preparing the 2014 accounts. These two clowns spent millions on the Mirvac venture, and most of it is money down the drain.

In fact, very few members know the full extent of the madness that went on while Mirvac were involved. Mirvac, as experienced property developers, came with a full team of architects, designers and anything else needed to design a building. What most members don’t know is that Tweedledum also assembled his own complete team even though Mirvac were already doing everything. So Mirvac had an architect and Tweedledum had a separate architect. Mirvac had a quantity surveyor and Tweedledum had a separate quantity surveyor. This continued right down the line. (We keep hearing rumours that some of the Tweedledum team have still not been paid)

To avoid this waste being recorded in the accounts as an expense, Tweedledum and Tweedledee are trying to claim that this money has created an asset which will have value in the future. This is mostly delusion, since any new developer will simply do their own design. Which means that the money spent to date will have to be written off as an expense. Even Cameron Roan of KPMG is saying it has no value.

Speaking of Cameron Roan, he has been the auditor at City Tatts for 10 years. Isn’t it time he was replaced by rotation?

Save City Tatts Committee.

AFR highlights sorry legacy of Tweedledum and Tweedledee

Last week’s Australian Financial Review story really is a sad milestone in the decline of City Tatts.

It again highlights the sorry legacy of Tweedledum and Tweedledee, in collusion with the worst committee of any club in Australia.

Only 10 years ago, City Tatts was a club that had every possible advantage a club could wish for. It had a large building in the best possible location in Sydney – owned free and clear. It had 420 poker machines generating a profit of $23 million every year. It had successful restaurants, bars and gyms.

And, most of all, it had 34,000 loyal members.

All of the above meant that a profit of $3 million every year was easily achievable, and the club should be debt-free.

Now, after of 10 years of insane mismanagement by Tweedledum, it has sunk so low that it’s own bank and it’s own property developer are bickering over how to divide the scraps after it goes bankrupt.


Save City Tatts Committee


Latest News Shows Mirvac Are Still Worried About City Tatts

One thing is clear from the AFR article – Mirvac are still very worried about the potential fallout from the City Tatts deal.

Mirvac dropped the City Tatts development in October last year without saying why, at least not to members. But within a week they were telling their contacts in the media how much dealing with City Tatts worried them.

But they are finished with it now and have plenty of other projects so there is no need for them to continue briefing the media about their side of the story. The fact that they are doing so shows how worried they are.

Mirvac knew within a few weeks of being appointed that the whole deal was a complete fraud. They knew that they were picking up a prime CBD site worth $75 million for less than $20 million. They also knew that handing the Club 7 floors of raw concrete shell, to be fitted out by the Club meant that the deal made absolutely no sense for members – and would be the end of City Tatts. (For more detail on why Mirvac walked away, see “Mirvac’s Sticking Points” on this blog)

So Mirvac always suspected that the development would be the end of City Tatts, and when that happened their role in it would be closely examined.

This latest report is a continuation of their attempts to claim that they were the ones to blow the whistle on the shonky deal.

Save City Tatts Committee


Financial Review Only Hinted At The Real Problem

There is far more to yesterday’s Australian Financial Review story than meets the eye.

Or, to put it another way, the Financial Review know far more than they said.

Just consider the impasse between Mirvac and ANZ Bank over “security” that derailed the proposed development. In property, “security” means either you own the land or you own a mortgage over the land. The members of City Tatts own the land so the only other security for a developer is a mortgage – now held by ANZ Bank. And that is the biggest landmine of all for any potential developer.

As the Financial Review well knows, Patrick Campion granted a mortgage over the Club’s premises at 196-204 Pitt Street to ANZ Bank in 2013 without the approval of members. This is a clear breach of the City Tattersall’s Club Act – for which Campion (a solicitor at Clinch Long Letherbarrow) will eventually be struck off.

This is the real problem for all developers. Mirvac and ANZ knew the mortgage was illegal and could be challenged by members at any time, before or during a development.

And this applies to any developer, whether it is Mirvac, Toga, Grocon, David Jones or Benny Elias.


Save City Tatts Committee



Financial Review Article – A Real Milestone For City Tatts

There is a very good article by Samantha Hutchison about City Tatts in the Australian Financial Review today.

In fact, it marks a real milestone in the history of the Club.

The article says that Mirvac dropped the City Tatts deal because they couldn’t reach agreement with ANZ Bank that provided suitable security “in the event the club fell into insolvency or financial hardship”.

This is the first time a newspaper has openly stated that parties involved with City Tatts are worried that the Club might collapse. And this is a financial newspaper – not a tabloid.

It also clear that this was not just a passing concern – it was real enough to derail the deal.

So make no mistake, when a major financial publication prints that the Club could go under, you know it’s serious.


Save City Tatts Committee