MUNGANA CASE

Hokitika Guardian, 24 July 1931, Page 5

MUNGANA CASE

CROWN COUNSEL ADDRESS.

(Australian Press Association.)

BRISBANE, July 23

„ At the bearing of,the Mungaua case the prosecuting counsel, Mr McGill, in course of his opening address, which has occupied t.vo days, declared that Mr McCormack, while a Minister of tlie Crown, received a cheque for £ISOO Dom the State smelters, signed by Mr Goddard as manager. The cheque was payable to “F. Reid, or bearer.” That cheque went into McCormack’s bank account on the first off October, 1920. On October 16th, lie withdrew £750. Mr McGill said the Crown suggested somebody else got it. He addressed: ‘Jurors will see that whenever money comes forward, a hand steals out of the shadows to take its share. That hand is the hand of Theodore!” Evidence would be called, added Air McGill, to show Mr Theodore had a share every time that money was paid. Other evidence would lie produced showing that Goddard was definitely corrupted in 1920 with a gift of 1,500 shares in Mungana Minos Limited, other shares in the mines being in the names of MeCorhiacli’s two sistet‘3.

Allegations were made in the Queensland Legislative Assembly hi October. 1929, that presurc had been brought to hear on a former Labour Ministry to build a railway line to Mori lit' Is-:i silver-lead field, and for the Govern ment to purchase the Mungana oil leases -at £49,000 in consideration of pjifts of shares. It was stated that the shareholders of Mount Isa had made a profit of £IOO.OOO at the expense of the public. The Minister of Railways, Air Godfrey Alorgan, declared in the House that a. Labour member, Air Randolph Bedford, had “out of the goodness of his heart,” given shares to certain of his friends. These included Air E. G. Theodore, M.P., and deputy-leader of the Federal Labour Party; Air W. M’Oormack, former Labour Premier ot Queensland; and Air A. J. Jones, exAlinister of Alines. It was further alleged that the gilt of shares was worth thousands of pounds sterling. As a result of discoveries* by Crown Law Officers, during a visit to Chillagoe to investigate the affairs oT the mi eq it was stat/d authoritatively that criminal prosecutions would follow.

David Hughes, a miner, is alleged to have admitted that lie gave an interest to flo'ursnar claims to Air E. G. Theodore. because he was relying on Mr Theodore, as Premier of Queensland, and the influence he would wield to dispose of the oi*e. 5 A Royal Commission was eet Up during the early part of last year to investigate the allegations, and found against Aft' Theodore, Following the publication of the finding, Mr Theodore resigned his portfolio as Federal Treasurer in July, but so strong was the outcry against him by members ol the Nationalist Party that his suspension from Parliament, was moved in the Federal House. This, however, did not succeed. In the meantime, Mr Scullin had 'taken over the duties of Treasurer. After his return from the Imperial Conference, Air Scullin told Parliament that the financial position was so acute that Air Theodore’s experience and ability was essential to the good of the country, and lie was reappoiuted Treasurer in January ol this year.

COMMISSION’S FINDING. The- finding of the commission of inquiry was as follows: 1. The appointment of Peter Louis Goddard was not made honestly in the true interests of the State by those who were responsible for it.

2. The management of the State smelters and the conduct of Peter Louis Goddard in the performance of his duties were generally highly .censurable, as displaying indifference to both moral and legal obligations, recklessness 'in expenditure, unscrupulousness in administration, dishonesty in advice and action in connection with the sale of the Mungana mines to the State, and systematic concealment and misrepresentation of facts material to be disclosed in the public interest in the course of his duties, all of which conduct was actuated by consideration of his pecuniary or other personal advantage. 3. The enterprise was disastrous to the State in its financial results. These results were aggravated by faulty management, but they were largely the inevitable consequence of the policy imposed by 'the Government on th« enterprise. 4. There was a deplorable laxity of control exercised by the Treasury and the Department of Mines oyer expenditure- at the smelters and associated mines, .including Mount Mulligan. Phis laxity must be ascribed to a large extent to the improper Business relations existing between Messrs Theodore, At’C-or mack, Goddard and Reid. 5. Messrs Theodore. M’Cormack, Goddard and Reid were guilty of fraud and dishonesty in procuring the State to purchase' the Mungana mines for £40,000. 6. Moneys shared between them as proceeds of that transaction were fraudulently obtained. 7. Mr Theodore was guilty of the grossest impropriety in becoming secretly associated with Mr Goddard rn the Fluospar Mining Company and the Argentum Mining Company when lie must have known that Mr Goddard’s connection with them constituted not only a serious breach of Goddard’s duty as manager of the State smelters, but was also a breach of the statute under which he had been appointed.

Tlie commissioner stated that the Minister of Alines (Mr Jones) was not free from moral responsibility for intended fraud- noon the State, and bad neither the strength of character nor mentality to cone with the situation. It was his curious conception of bis duty as Minister that he was not there to inquire into the private actions of bis colleagues. One improper and inexcusable feature of Mr Theodore’s secret connection with the Fluorspar and Argentum mining companies was that both companies applied for. and obtained from the Government advances in aid of their mining operations, which conceivably were influenced bv the fact that Air Theodore had a-personal interest in the accommodation. It did not require any observations by -him (the commissioner) to indicate the gross impropriety of the secret connection of Afessrs 1 heoddre and Goddard with the Argentum company.