Secret commissions and bribes

Matthew Gill Doepel was chief technology officer for the Catholic Education Office in Parramatta Diocese (CEOP) from 2008 to 2013.  This is a big organisation – it effectively (or not, as you will see) administers 56 primary and 22 secondary schools in western Sydney as well as four early learning centres. It employs over 6,000 staff.

This was a period which coincided with a fairly massive roll-out of IT to schools, including the Commonwealth-funded “Digital Education Revolution.”  A lot of money was spent, and CEOP was probably awash with it.

In fact there was enough money sloshing around for Mr Doepel to solicit and receive $750,200 in bribes from one supplier in the period 2008-2012 (at which point Doepel and the supplier appear to have fallen out) and $566,200 from a second supplier.  I say “enough money” because presumably the suppliers expected these amounts to be more than covered by profits they could make in return from CEOP.

Somehow, eventually, CEOP got wind of this and commenced proceedings, in 2014, against Doepel.  They also claimed against the principal of the first supplier and the supplier, though that claim was settled.

Last week the CEOP’s claim against Doepel, who by then had gone bankrupt, was determined by Justice Beech-Jones in Trustees of the Roman Catholic Church for the Diocese of Parramatta v Doepel [2016] NSWSC 1566.

I am afraid I am showing my age a bit, because what I recall from law school as being a rather tricky problem in relation to bribes was treated by His Honour as now being comfortably resolved.  Where an employee has received a bribe (the technical term here is “fiduciary” but surely anyone worth bribing in a commercial context is a fiduciary to the extent of whatever they are being bribed for), you can either recover the bribe (or “secret commission”) from them, or you can claim compensation for the loss you have sustained as a result of their acting on the bribe.  Obviously you will only do the latter if you can prove that your loss is greater than the bribe.  But unless the bribers were also taken for a ride it ought to be – if you could only prove it.

In this case, CEOP elected to claim the bribe in relation to the second provider.  In relation to the first supplier, CEOP claimed compensation for loss, measured by what the first supplier had been able to overcharge it.  CEOP did this by having an accountant analyse how much higher the supplier’s profit margin was with Parramatta Diocese as opposed to other dioceses, and inviting the court to conclude that this was the measure of the overcharging permitted by Doepel conniving with that supplier.

It’s a bit of a broad brush but (to mix metaphors) Beech-Jones took the bait.  It helped that there was no contradictor – Mr Doepel did not turn up to defend the claim, and nor did the first supplier need to, having already settled.  The court held that the first supplier had overcharged CEOP and Mr Doepel by taking the bribes had caused CEOP to lose over $6.3 million dollars.

Pause for [not] audible intake of breath.

First observation – staying away from a losing case always gives the other side a free kick – other examples posted about on this blog include Kathy Jackson and the HSU and young Andrew Farley and the Mrs Mickle music centre at Orange High School.

Second observation, if the first supplier, EDC, really overcharged the CEOP by over $6.3 million, then EDC and its principal, Mr Lowy, got off pretty lightly by settling with CEOP for only $75,000.

Thirdly, what most astounded me, though maybe it shouldn’t have, is that the CEOP has managed to keep pretty quiet the fact that it was so spectacularly ripped off by its employee. Google searches of selected keywords by me have so far drawn a total blank on any press mention of this affair.

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One Response to “Secret commissions and bribes”

  1. Anonymous Says:

    All true!

    [Redacted: unfavourable opinion of Mr Doepel’s personality.] Can’t believe he is still working in a position of power and responsible for money.

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