A senior lawyer at the heart of the disastrous and deadly Robodebt scheme has left her Commonwealth job after it was discovered she was consulting for an outside firm that provides legal advice to government departments.
The former chief counsel of the Department of Human Services (DHS), Annette Musolino, was allowed to resign from her job after the ABC put questions about her case to Government Services Minister Bill Shorten.
Her departure comes nearly 12 months after she was harshly criticised in a report by the Robodebt royal commission.
According to the royal commission, Robodebt was a catastrophic, politically motivated scheme to identify fraud by averaging out welfare recipients’ incomes over an entire year. The dysfunctional and inaccurate method drove at least two young men to suicide and financially and psychologically destroyed others.
Commissioner Catherine Holmes described the scheme as having been born of “venality, incompetence and cowardice”.
She referred individuals to the Australian public service commissioner (APSC), the national anti-corruption commissioner, the president of the Law Society of the Australian Capital Territory, and the Australian Federal Police for possible civil or criminal action.
Last week, the APSC announced seven current and former public servants were found to have breached one or more elements of the code relating to Robodebt. Enquiries are continuing for seven others, with a decision expected in the next month.
The former secretary of the DHS, Kathryn Campbell, was suspended from her $900,000-a-year job with the Defence Department because of the royal commission, and then resigned soon afterwards.
The royal commission found that top departmental lawyer Ms Musolino kept information about concerns over the scheme’s legality from her superiors because she assumed they did not want to know.
“The legal arguments in support of income averaging were weak and unconvincing and involved substantial legal risk,” the commission’s final report found
“Despite this, Ms Musolino took no steps to provide legal advice to DHS executives as to the extent of that risk and the need to obtain independent external advice. She did not do so because she knew that such advice was unwanted by them.”
The report also criticised Ms Musolino for withholding information from the Commonwealth Ombudsman, who was investigating the legality of the scheme, and for minimising doubts over the scheme’s legality to protect her own position within the department.
In 2020, several years after concerns about the Robodebt scheme’s legality were first raised internally within the DHS, Ms Musolino was promoted to the role of chief operating officer of Services Australia.
The ABC last month asked Services Australia (the successor to the DHS) and Mr Shorten’s office whether it was appropriate, given the royal commission’s findings, for Ms Musolino to have left Services Australia and taken up a role at Canberra-based firm AllyGroup, which provides millions of dollars’ worth of legal services to government every year.
Both Mr Shorten’s office and Services Australia confirmed Ms Musolino was in fact on leave while working for AllyGroup as a contractor.
“When allegations were made that Ms Musilino [sic] may have been moonlighting, the minister asked Services Australia to investigate immediately. Ms Musilino [sic] subsequently resigned,” a spokeswoman for Mr Shorten said.
Ms Musolino told ABC Investigations she had written permission from Services Australia to perform outside work during her unpaid leave.
The minister’s spokeswoman said Mr Shorten “stands by his previous statements regarding Robodebt and reiterates that his main expectation is that there is justice for the victims”.
His office did not answer questions about whether the victims of Robodebt would consider the fact Ms Musolino was allowed to resign from her role at Services Australia to be “justice”.
In response to the royal commission’s report, Mr Shorten last year savaged former Coalition ministers and senior public servants who he said had enabled and facilitated the disastrous scheme.
“They betrayed the trust of the nation and its citizens for four and a half years with an unlawful scheme which the Federal Court has called the worst chapter of public administration,” he said.
A spokeswoman for Services Australia confirmed Ms Musolino was “no longer employed” by the agency after it became aware of her work with AllyGroup.
“When asked why Ms Musolino was allowed to resign given the Royal Commission’s findings and her carrying out consulting work for a legal firm whilst still on unpaid leave from her government job, the spokeswoman said: “There is no provision under the Fair Work Act to disallow a resignation.”
A spokesman for AllyGroup said Ms Musolino “provided ad-hoc consultancy services to AllyGroup pursuant to a contract between AllyGroup and a third-party service provider” and that she had not provided legal services to government.
Services Australia employees are entitled to perform outside work with the permission of the department, but they must disclose any real or perceived conflicts of interest.
She refused to disclose whether she had been subject to an adverse finding by the public sector commissioner, or whether she is subject to criminal proceedings as a result of a referral to the royal commission.
She added she had cooperated fully with the royal commission.
The Robodebt scheme stigmatised and traumatised welfare recipients and blurred the distinction between fraud and inadvertent overpayment. It devastated its victims both emotionally and financially, the royal commission found.
Two young men — Rhys Cauzzo and Jarrad Madgwick — killed themselves as a direct result of being accused of over-claiming benefits, and the royal commission’s report states that the two suicides are unlikely to have been the only deaths linked to the scheme.
“That DHS was aware of this likelihood — that it dealt with suicides frequently — makes the implementation of the scheme all the more egregious, particularly when there was evidence that they were raising inaccurate debts,” the report said.
“DHS had a responsibility to deal sensitively with those people relying on its services, and to provide support rather than inflicting distress.
“What is certain is that the scheme was responsible for heartbreak and harm to family members of those who took their own lives because of the despair the scheme caused them.
“It extends from those recipients who felt that their only option was to take their own life, to their family members who must live without them.”