InDaily yesterday revealed documents showing McGowan was listed as the director of the private company Silver Chain Corporate Services during the first two months of his public appointment – and that its parent company Silver Chain Group had begun work on a $13 million contract for SA Health while he had both roles.
McGowan referred himself to the Commissioner for Public Sector Employment Erma Ranieri yesterday, following enquiries about the matter from InDaily.
In parliament later in the day, Premier Steven Marshall said Ranieri had “conducted all the recruitment aspects of the employment of Dr McGowan”, prompting questions from the Opposition about the appropriateness of her running the inquiry.
“If, as the Premier just said, the Commissioner for Public Sector Employment was the one who conducted the recruitment process of Dr McGowan, why and how could it be that the Commissioner for Public Sector Employment is the appropriate person to conduct an investigation into this matter?” Opposition Health spokesperson Chris Picton asked.
Responding to questions from InDaily this morning, Ranieri that she had decided to appoint an independent investigator to conduct the inquiry.
“Over the past five and half years as Commissioner for Public Sector Employment, I have advised on public service chief executive matters, as part of my role,” she said.
“After much consideration I will be engaging an independent investigator, who will provide me with a report for my consideration.
“It is important we uphold the Code of Ethics, as it is the foundation of our public sector’s conduct, culture and professional integrity.”
Ranieri emphasised that she was an independent statutory officer.
McGowan had been the CEO of the major not-for-profit company Silver Chain Group for a decade before being appointed as SA Health CEO.
Health Minister Stephen Wade told parliament earlier in the week that it was his understanding that McGowan had stepped down from all his roles at private company Silver Chain Group when he started at SA Health in May 2018.
But emails and letters from Silver Chain Group officials to McGowan indicate he continued to appear on company records as the sole director of the company’s subsidiary, Silver Chain Corporate Services until mid-July last year – more than two months into his role as SA Health boss.
Two officials from Silver Chain Group wrote to McGowan in mid-July 2018, indicating that he was still recorded as the subsidiary’s sole director, and asking that he sign documents confirming that he had actually resigned two months earlier.
The emails and letters were obtained by the Opposition under Freedom of Information laws and provided to InDaily.
On July 1, 2018, during the period the documents say McGowan held both roles, Silver Chain Group began a major contract with SA Health – which, according to the Auditor General, has since cost taxpayers at least $13 million.
McGowan stressed that he had no involvement in the negotiation or procurement of the contract and also emphasised that he had not received any remuneration from the company after his appointment to SA Health.
Picton wrote to McGowan this morning, asking for him to clarify when he officially resigned his directorship of Silver Chain Corporate Services.
“We know that ASIC filings say that the resignation took place in May – even though Silver Chain wrote a memo to him as “the director” in July,” said Picton.
“I hope Dr McGowan will release the signed copies of these letters so we can see what dates was included on the finalised documents.
“From the statements in Parliament yesterday it is clear that Dr McGowan did not inform the Premier or the Minister of this matter until it was brought to light by InDaily.”
Asked whether McGowan had any response, an SA Health spokesperson said: “As per protocol, all political correspondence should be directed to elected representatives.”
Responding to Picton’s question about the appropriateness of the Commissioner’s carriage of the inquiry, Marshall told parliament yesterday: “Ms Erma Ranieri is one of the most significant, long serving, diligent, high integrity, capable public servants we have in South Australia, and I find it absolutely disgraceful that the Opposition would be casting any question on her ability to look into this issue.”
The South Australian Public Sector Code of Ethics says that public sector employees:
“…must not engage in employment or other remunerative activity outside of their public sector employment where the activity conflicts with, or has the potential to conflict with, their role as a public sector employee, or if the performance of such outside employment or activity might affect their capacity to perform their public sector duties.”
It also requires that:
“Employees will disclose in writing to their chief executive or agency head any actual or potential conflicts of interest at the earliest available opportunity.”
“Public sector employees will obtain written permission from their agency head or delegate before engaging in any outside employment or remunerative activity…”
SA Health did not respond directly to questions yesterday about whether McGowan’s situation was compliant with the code.
In a statement yesterday, a department spokesperson said an administrative error by Silver Chain had led to a delay in changing officeholder details on a non-operational, dormant subsidiary company of Silver Chain.
“As soon as Silver Chain identified the administrative error, the directorship details were updated,” the spokesperson said.
“Dr McGowan did not receive a salary or any remuneration from Silver Chain following his resignation as Chief Executive Officer on 4 May 2018.
“Dr McGowan had no involvement in the negotiation or procurement of the SA Community Care Program for non-government organisations, including Silver Chain, in May 2018.”
On July 23 last year – exactly a week after he was sent the Silver Chain paperwork – McGowan told a parliamentary inquiry that before the 2018 state election, he was involved in conversations with then-Opposition Health spokesperson Stephen Wade about Silver Chain’s services.
During one of those conversations, McGowan said, Wade sounded him out about an appointment as SA Health CEO.
“We would typically talk to the Opposition so, in that context, we were talking to Stephen Wade about the Silver Chain offerings,” McGowan told the July 23, 2018, committee hearing.
“We had a number of meetings—probably five or six, I can’t recall—but during one of those meetings he asked me would I be interested in the position if it became available and I said, absolutely, I would be.”
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