One of NSW's most senior public servants shared in $2.5 million payments from a charity he directed, payments that potentially breach state law and that are the subject of an ongoing state government investigation.
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Fairfax can reveal that Jim Longley, chief executive of the $2.7-billion Department of Ageing, Disability and Home Care, is part of a charity payments probe which has already triggered the resignation of the national RSL President. The affair has now been referred to the NSW Police and is the subject of an ongoing NSW Fair Trading investigation, Fairfax Media has learned.
Mr Longley, a former state Liberal MP, was one of 10 directors of charity nursing home provider RSL LifeCare who shared in a total pool of more than $2.5 million in "consultancy fees", financial statements show. Annual instalments of up to $370,000 were divided between all 10 directors of the company from 2010 to 2016.
State law prohibits directors of a charity from being remunerated unless they have express approval from a government minister.
"Thanks very much; goodbye," said Mr Longley when asked if he had broken the law.
In a report last December, forensic auditor KordaMentha said it appeared that the payments had never been approved by a minister.
RSL LifeCare was founded 115 years ago on volunteer labour and donations, according to its website.
It is owned by the NSW RSL and receives hundreds of thousands of dollars a year in small individual donations from RSL sub-branches, women's auxiliaries and independent charitable organisations.
The NSW Better Regulation Minister Matt Kean said: "This matter has been referred to NSW Fair Trading. The matter was also referred to the NSW Police Force for further investigation."
Mr Kean declined to say if any of the RSL LifeCare payments had ever been approved by a minister, because he said that was a focus of the ongoing investigation into the organisation by his department.
"The government needs to make a clear statement," said NSW Opposition Leader Luke Foley. "Did it give permission for a senior bureaucrat, and former Liberal MP, to share in millions of dollars of 'consultancy payments'?"
Mr Longley was an MP representing Pittwater in the NSW parliament for a decade until 1996. He spent three years on the government frontbench, including as Aged Care Minister.
The fees, totalling amounts of between $315,000 and $370,000 each year, were divided between all directors of the charity from 2010 but an unknown number of select directors began receiving "consultancy fees" in 2007.
A total of between nine and 10 directors are listed on recent annual financial statements.
Mr Longley won't say how much he was paid or when he began receiving the payments but he joined the board in 2007.
A spokesman for Ageing, Disability and Home Care did not answer questions about whether Mr Longley should stand aside, other than to say that his position with RSL LifeCare did not conflict with his bureaucratic role.
Ageing, Disabilities and Home Care had a budget of more than $2.7 billion, according to a 2013/14 report on its website.
RSL LifeCare received $120 million in government subsidies and $45 million from its residents in 2015, according to an annual report. It has $1 billion in assets.
"Under RSL LifeCare's constitution, board directors are entitled to earn consultancy payments where services performed are above and beyond normal director duties," said a spokeswoman for RSL LifeCare.
The spokeswoman said Mr Longley was chosen for "his extensive aged care and retirement living experience as well as his business and financial expertise".
Mr Longley began his state government role in 2012, a position that also makes him a Deputy Secretary of the broader Family and Community Services department.
National RSL President Rod White stood aside last November after Fairfax revealed he had shared in the payments and resigned last month.
Advice from law firm Henry Davis York provided to the NSW RSL last October recommended two of its serving state councillors stand aside pending investigations into the consulting payments.
