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Why pay $1m when you can pay PwC $30m, and help yourself to free IP?

by Stuart McCarthy | Jun 26, 2024 | Government, Latest Posts

Allegations have emerged that senior officials from the Departments of Veterans Affairs (DVA) and Defence appropriated the intellectual property of a suicide prevention app from a veteran-owned business. Stuart McCarthy with the investigation.

Consulting firm Deloitte was reportedly paid more than $1M by Defence to develop the mental health phone app HeadStrength, partially based on intellectual property (IP) from another company, RedSix.

The chief executive of RedSix says the theft of his IP “almost destroyed me mentally, physically and financially.” It echoes a similar siphoning of IP from Swiss8 by Defence and Deloitte previously reported in the Daily Telegraph ($).

While the otherwise successful, self-funded RedSix was dumped by government officials after a ministerial endorsement and offers of financial assistance that didn’t eventuate, its competitor Innowell Pty Ltd – part-owned by PwC and co-founded by Professor Jane Burns while she chaired a DVA national advisory committee – was paid $30M to develop discredited suicide prevention software including trials involving DVA staff and clients.

Paid to Not Reform: Veterans’ Affairs chucks $73m at PwC to dodge Royal Commission

Numerous sources have told MWM that RedSix’s mistreatment was part of a wave of cronyism, IP appropriation, contract mismanagement, abuse of procurement procedures, financial inducements, misleading and deceptive conduct, gaslighting and other forms of orchestrated abuse by senior government officials and their consultants, during the controversial billion-dollar “veteran-centric reform” program.

RedSix suicide prevention app

RedSix chief executive Michael Handley, a former soldier who served in Somalia and Bougainville in the 1990s, registered his company in 2016 and developed his suicide prevention app over the next two years. Handley told MWM the process became his “passion and purpose to help others” by addressing “never before seen levels of veteran suicides,” costing $250,000 of his own funds, including a $100,000 personal loan.

Launched in September 2018, within two months, the app was being accessed by up to 260 veterans per week. After further software development and a re-launch over the following 12 months, Handley says

RedSix became the most downloaded mental health app for Australian military veterans by the end of 2019.

In October 2018, Handley met Professor Burns at the Invictus Games in Sydney and was asked to attend meetings and briefings with senior staff from the re-branded Open Arms counselling service, Defence and DVA, health experts, consultants and advisers involved in DVA and PwC’s taxpayer-funded “reform” program. Burns emailed Handley soon after their initial meeting:

“I do love what you’ve created, and when the time is right would love for you to meet with Steph Hodson from Open Arms – I introduced you to the Open Arms peer-to-peer support workers. … I am also really happy to make some connections into DVA and [Defence], and when you’re comfortable to the Minister’s advisors.”

Handley was later requested to tender for mental health software development contracts, which did not eventuate despite RedSix being endorsed in DVA’s mental health and wellbeing strategy and action plan, signed by then Defence Personnel and Veterans’ Affairs Minister Darren Chester in May 2020. The official strategy included the written objective for the department to:

“Continue the partnership between Open Arms and key veteran peer support groups to extend reach and provide support through existing peer-to-peer platforms, including RedSix, Swiss8, and Survive to Thrive.”

When DVA Secretary Alison Frame was asked in Senate Estimates last year about her department’s partnership with Handley, her First Assistant Secretary Program Delivery, Leanne Cameron, said, “No, we have no formal partnership with RedSix,” then deflected the issue to Defence.

RedSix vs HeadStrength

Handley says comparing the RedSix phone app with the content of the HeadStrength app launched by Chester and Defence Force chief Angus Campbell in October 2020 shows Deloitte used his intellectual property without his permission while the firm was engaged by Defence in their million-dollar consulting contract.

MWM does not allege IP theft or other wrongdoing on the part of Innowell or its employees. However, extensive correspondence between Burns and Handley does show that Innowell’s Burns was the instigator and primary facilitator in Handley’s engagement with government officials, their consultants and influential advisers.

In the documents obtained by MWM, during the entire 18 months of her dealings with Handley, Burns at no stage appears to have told Handley she was his commercial competitor with a financial interest in Innowell, a company with $30M in Commonwealth government backing. Nor of the extensive collaboration between DVA and Burns in Project Synergy.

Emails from Burns using her University of Sydney and BUPA email accounts also show that in 2020 she canvassed Handley, other veteran-owned businesses engaged with Open Arms, health information technology start-ups, universities and other organisations for involvement in a BUPA-led “industry consortia” bid for Commonwealth funding to establish a new Well & Productive Cooperative Research Council. One of the emails from Burns suggests involvement in the bid could provide

guaranteed funds over a period of time, and a pipeline to market.

Project Synergy

Project Synergy was initially undertaken using a $5.5 million grant from the National Health and Medical Research Council (NHMRC) to Burns’ Young & Well CRC, then continued under a University of Sydney/PwC joint venture funded by the subsequent $30M non-competitive health department grant.

The funds were used to establish Innowell before it was gifted to the University of Sydney, PwC, Burns and her University of Sydney colleague Professor Ian Hickie.

Involvement by the Open Arms veterans and families counselling service in Project Synergy included numerous trials and “participatory design workshops” for the Innowell software platform, published in journal articles co-authored by senior DVA staff including then Open Arms national manager Stephanie Hodson.

Defence and Veteran Suicide Royal Commission evidence

In sworn testimony to the ongoing Defence and Veteran Suicide Royal Commission and in numerous Senate Estimates hearings, former DVA Secretary Liz Cosson repeatedly claimed millions of dollars in external labour hire funding was required to clear an excessive backlog in veterans’ entitlement claims due to an ideologically driven DVA staffing cap imposed by the Turnbull-Morrison government.

However, a 2021 Australian National Audit Office report on the Veteran Centric Reforms program (VCR) says that additional staff funding not forecast in the 2017 business case – prepared by PwC at a cost of $8 million in public funds – was needed to undertake core DVA business including claims processing, while full-time DVA staff were actually involved in VCR-related activities with Burns and other commercial actors.

Open Arms’ involvement in one of the “participatory design” studies alone is estimated to have cost the taxpayer almost $100,000 in departmental operating expenses, over and above the $30 million already provided to Innowell by the health department.

Six months after their first meeting, Burns messaged Handley on 8 April 2019 saying she had spoken to Hodson about RedSix and offering to “make a recommendation to Steph [Hodson] regarding the tech and how it functions.” She continued: “They are doing small pilots of work that is innovative – and also looking at better collaboration across platforms and sites.”

This was a generic summary of the taxpayer funded work Burns was doing with Innowell and Open Arms for Project Synergy, but omitting details about Innowell, her direct involvement in “they” and her numerous conflicts of interest.

When Handley expressed his frustration about the lack of tangible support for RedSix almost a year later, Burns responded by text message on 6 March 2020:

“I’ve Spoken to Steph [Hodson], she will call you but they’re about to offer you a contract so don’t throw the baby out yet. I also thought you were in partnership with Swiss8. If not can you let me know as I’ve been pushing internally at BUPA for your inclusion in a [Joint Health Command] offering.”

BUPA and Request for Tender

Defence’s Joint Health Command had previously signed a multi-million dollar contract for on-base medical support to defence force personnel with one of Burns’ other employers, BUPA. Burns suggested in a message to Handley five months earlier that BUPA might consider designating RedSix as a “charity of choice,” trialling the platform “across a variety of workplace settings” with BUPA’s “wellbeing at work team” or even pitching it to the multinational tech giant Google.

The Commonwealth government’s AusTender website shows DVA officials opened a request for tender on 14 August 2020 seeking to:

“work with a panel of one or more contractors, to provide high quality holistic services, focusing on mental health and wellbeing and ensuring processes, practices and methods of engagement are based on, and respectful of, the needs of veterans and their families.”

After Handley and others were encouraged to submit tenders including commercially sensitive information on their software designs,

the request for tender was closed on 14 October without awarding any contracts. Defence’s HeadStrength app was launched one week later.

Handley told MWM he is “still in shock” after his dealings with Burns and DVA and says the stress profoundly affected his physical and mental health:

“The toll this has had on myself and my family both physically and mentally over the last three to four years has put me in hospital four times and destroyed my faith in the department of veterans’ affairs. This is un-Australian and parallels the behaviour of an organised crime gang. People need to be held to account.”

Since her departure from the Open Arms national advisory committee, Burns has been a member of the National Disability Insurance Agency board and is now employed full-time as the NDIA’s “chief strategy and wellbeing officer.”

When contacted by MWM, Burns declined to respond to questions on her communications with Handley, the overall management of the veteran centric reform program and her proposed Well & Productive CRC. The CRC’s website now lists her as the Acting CEO and says that its mission is “Harnessing human centred, integrated solutions to create mentally healthy workplace and improve productivity.”

Among the other financial inducements paid by DVA to silence criticism and restore the department’s tarnished reputation during the VCR program was a series of “limited tender” contracts totalling $516,500 awarded to another Open Arms national advisory committee member, former Army medic Talissa Papamau, for operating the now defunct ‘Modern Soldier’ Facebook account including “educational resources” and favourable commentary on DVA initiatives.

For Vietnam veteran and Stand Tall for PTS founder Tony Dell, these revelations are

absolutely soul destroying, suggesting DVA staff and consultants involved in the VCR program were corrupt.

“I feel everyone involved should be charged with manslaughter for every veteran who has died since this happened, and we should claw back the hundreds of millions of dollars that could have been used to save lives.”

The Albanese government is expected to table proposed amendments to the “not fit for purpose” veteran entitlement legislation in parliament before the winter recess in July. Advocates have previously told MWM they anticipate the legislative amendments will fail to fulfil the intent of the first recommendation in the Royal Commission’s interim report last year.

Did PwC consult on the final recommendations of the Senate Inquiry into PwC?

 

Stuart McCarthy is a medically retired Australian Army officer whose 28-year military career included deployments to Afghanistan, Iraq, Africa, Indonesia and Papua New Guinea. Stuart is an advocate for veterans with brain injury, disabilities, drug trial subjects and abuse survivors. Twitter: @StuartMcCarthy_

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Pay so everyone can!

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