Liberal Party lobby firm Crosby Textor was awarded a secret contract, not put to tender, when Scott Morrison was managing director at Tourism Australia. Jommy Tee investigates what the bloody hell happened.
Two procurement processes run by Tourism Australia in 2005 coalesced to form a maelstrom of maladministration involving irregular and collusive practices by the government agency – at the time Scott Morrison was managing director.
These were the secret commissioning of a research project by Liberal Party lobby firm Crosby Textor and Tourism Australia’s tender to appoint a new advertising agency, a role consequently won by M&C Saatchi.
Crosby Textor was the most influential government lobbyist during the government of Scott Morrison, having its advisers – including Morrison’s principal private secretary Yaron Finklestein – posted inside the former prime minister’s office.
The relationship between Crosby Textor and Morrison stretches back almost 20 years. In a highly unorthodox deal, Crosby Textor’s work for Tourism Australia on “values and brand strategy” was kept off the books, not tendered for, or procured, by the government agency, but instead by the advertising agency, M&C Saatchi.
The deal occurred ahead of M&C Saatchi being awarded the lucrative advertising contract with Tourism Australia. Indeed it occurred before evaluation of the short-list tenderers was completed.
M&C Saatchi then later billed Tourism Australia for Crosby Textor’s work, months after the dust had settled on their controversial appointment as the new advertising agency for the tourism peak body.
The tender and the pollster
At the same time Crosby Textor, together with Tourism Australia, were conceiving the research project, Tourism Australia was running the tender for a new advertising agency to deliver global creative services.
M&C Saatchi won the advertising agency job producing the much maligned “So where the bloody hell are you?” campaign. Scott Morrison led the evaluation panel that selected M&C Saatchi from the short-listed bidders.
Recently released FOI documents confirm the government agency secretly worked with Liberal Party polling firm, Crosby Textor, to undertake tourism research in the United Kingdom (UK).
The work was never separately put out to tender by Tourism Australia.
Tourism Australia has confirmed the Crosby Textor work was not “directly contracted” by them but rather by their “global creative agency at the time” and later confirmed the agency was M&C Saatchi.
The previously undisclosed joint venture between the government agency, regular Liberal Party pollster, and advertising agency with links to the Conservative Party in the UK, tellingly occurred:
- prior to the final evaluation of the tender being concluded;
- prior to the Board of Tourism Australia making its recommendations; and
- before the then Minister, Fran Bailey, signed off on the process and the contract.
The covert collaboration can be described as ethically dubious, involving a collusive three-party arrangement between the participants.
At a minimum, it was a breach of procurement guidelines by Tourism Australia officials.
In short, Tourism Australia was actively collaborating with a subcontractor of a company while that same company was bidding for a tender which had not been finalised and awarded.
According to the FOI documents, M&C Saatchi submitted an invoice to Tourism Australia in June 2006, well after they were awarded the advertising agency contract, seeking payment for a curiously titled invoice “Crosby Textor – ATC Values.”
This appears to relate to the body of work that Tourism Australia co-designed with Crosby Textor. It is worth noting that prior to the formation of Tourism Australia in mid 2004, its functions were carried out by its predecessor, the Australian Tourism Commission (ATC).
The relevant amounts for M&C Saatchi’s invoices were redacted as part of the FOI so we are unable to glean the value of work Crosby Textor undertook.
A close look at the invoice listings reveals that on at least four separate occasions Crosby Textor are named in production billing jobs. The invoices relate to focus groups, qualitative research, and research stimulus materials for in-field testing.
Who knew what?
The tender for global creative services and any work Crosby Textor was doing for the government was a white-hot political potato at the time.
The nod and wink arrangement and the lengths to which it was kept secret and the timing of the arrangement point to the involvement of senior Tourism Australia officials. In fact it is inconceivable the arrangement between the three parties – which if exposed at the time would have had serious political repercussions – could have occurred without the concurrence of the most senior Tourism Australia bureaucrat, Scott Morrison.
MWM approached Tourism Australia with questions seeking details about the Crosby Textor work, how it came to fruition, who in Tourism Australia approved it and whether the Tourism Australia board and the minister, Fran Bailey, were aware of it.
Tourism Australia declined to make an official comment, citing that the board and its management had undergone significant change in personnel since 2005 and could not comment on the knowledge of individuals and their relationships at that time.
MWM has previously obtained via FOI the Tourism Australia’s Internal Audit Committee minutes of June 2, 2005, the board meeting papers of June 3, 2005 and July 7, 2005 which dealt with the creative agency contracts and they contained no reference to Crosby Textor.
It is plausible that the board (and Minister) were blindsided and unaware of the work Crosby Textor had undertaken. If they had known it would have been a less than functional board to not have heard the alarm bells in relation to the propriety of the arrangement.
A week before M&C Saatchi was announced as the winning tenderer, but after the Crosby Textor work had commenced, Tourism Australia was asked to respond to a Question on Notice by the Labor opposition. The question asked whether Crosby Textor had been “engaged for any purpose” during the course of that year and preceding years Tourism Australia could find no evidence of engagement or payment and communicated the information to the Minister, via the portfolio department.
It would not be the first time a national tourism board had been misled. The New Zealand auditor-general noted similar circumstances with external consultants and the Board of New Zealand Tourism when Scott Morrison was heading up the NZ Office of Tourism and Sport in 1998.
MWM also put a series of detailed written questions to Scott Morrison, Crosby Textor and M&C Saatchi. All parties failed to respond.
The lack of transparency, secret reports that never saw the light of day, the use of external consultants to lend a facade of credibility and cover, and hiding information from colleagues have been the hallmarks of Scott Morrison’s political and public sector roles.
What work did Crosby Textor undertake?
The off the books arrangement most likely commenced in the second quarter of 2005 when an interview protocol “was developed with the Crosby Textor and Tourism Australia team input”.
The research work involved Crosby Textor, together with Tourism Australia officials, designing a personal interview protocol to ascertain long haul travelling intentions from UK residents – at the time Australia’s largest market for inbound tourists.
Crosby Textor then conducted 99 interviews in the UK over a two month period with the first set of interviews conducted on May 18. The last tranche of interviews was conducted on June 14.
Coincidentally two days later on June 16, Crosby Textor donated $10,000 to the Liberal Party.
The results of the research were then delivered in a 138 page report on 25 July 2005 – Values, Decision Driver & Branding Strategy Research (July 2005),
The report flagged follow-up work including a “strategy workshop/brief agency” – “agency” referring to Tourism Australia’s global creative agency.
An additional layer of camouflage was involved as the report was badged as the work of another polling marketing company, Harris-Wirthlin.
However the report is littered with references to the true architects.
As exclusive partners to Harris-Wirthlin Brand and Strategy Consulting in Australia, this project was designed, directed and managed by Crosby Textor senior personnel.
The report adds that “The protocol was developed with the Crosby Textor and Tourism Australia team input.”
Before becoming the co-founder of Crosby Textor, Mark Textor, was the Australasian managing director of Harris Wirthlin. Tourism Australia also confirmed Harris-Wirthlin was not a vendor to them for this body of work.
Steers and whispers
At the time, the tender was criticised by the Australian advertising industry with cries that the tender appeared to be set up for one company – M&C Saatchi.
The criticism covered the tender criteria being cast to favour a global advertising firm, and possible conflicts of interests of Scott Morrison and his marketing director, Ian Macfarlane, Morrison and Macfarlane had previously worked for New Zealand government tourism agencies when M&C Saatchi won a major tourism advertising contract in that country.
Morrison was also questioned by the AFR on M&C Saatchi’s chances ahead of the tender outcome being decided, and about his friendship with Lynton Crosby, the other co-founder of Crosby Textor.
Morrison dismissed suggestions the tender would be influenced by his friendship with Crosby.
Crosby at the time was working with M&C Saatchi’s boss Maurice Saatchi on the UK Conservative Party’s election campaign. Crosby Textor cofounder, Mark Textor, also worked on the campaign.
According to the AFR Morrison said: “I’ve never met Maurice Saatchi. It is irrelevant that Lynton is a friend of mine”.
As the FOI material reveals a month after the AFR article, Crosby Textor commenced interviewing UK residents as part of the research that was co-designed by Crosby Textor and Tourism Australia but procured by M&C Saatchi and kept secret.
Why wasn’t the connections between Crosby Textor and Tourism Australia discovered at the time?
Despite the Labor opposition asking multiple questions in parliament, across multiple years of ministers as to whether Crosby Textor was undertaking work for government agencies, the answer invariably came back saying that no contracts had been entered into.
Without a direct sourcing contract (that is no paper trail) between Tourism Australia and Crosby Textor, the relevant minister could answer, hand on heart, that no contract existed.
Additionally, the camouflaged report with the innocuous title of “Values, Decision Driver & Branding Strategy Research” was not publicly released and not an official government report and not directly paid for by Tourism Australia.
The interviews as part of the research were also conducted in the UK – well away from the prying eyes of the Labor opposition and press gallery journalists.
Crosby Textor at the time was a much smaller operation than they are today, they had only just begun operations in the UK launching their London public affairs agency in July 2005. However, an inkling of what was afoot may have been contained in the UK trade press, which at the time said the London branch had three unnamed founding clients, one being in the tourism sector.
Reviews and audits
The entire tender process was shambolic. The Minister was concerned enough to order the department of Prime Minister and Cabinet (PM&C) to review the short-listing process of the final three contenders for global creative services.
The PM&C review resulted in the tenderers being re-scored with different weighting systems but the result remained unchanged.
The veneer of a probity audit around the process – up to the short-listing stage – was also undertaken by KPMG and used by Scott Morrison to assure everyone that everything was hunky dory. MWM has previously uncovered that process. Tourism Australia’s audit committee and Board heard a verbal report from KPMG and decided KPMG, or any other external consultant, was required to keep tabs on the evaluation of the short-listed bidders.
In a subsequent audit of the tender process the Australian National Audit Office was scathing in its criticism of the tender, finding the Morrison-led Tourism Australia failed to follow its own guidelines in the procurement process. The Auditor-General’s report was also critical of work commencing prior to contracts being signed but this was in the context of the successful tenderer having been announced and awaiting contract signing.
One wonders what the Audit Office would have made of secret deals and collusive behaviour that involved work being commissioned ahead several months before the successful tenderer was announced.
Jommy Tee is a long-time career public servant, having worked in the policy development field for 25+ years as well as an independent researcher interested in politics, current affairs, and Nordic noir.