A lesson in organised corruption

Members of City Tatts have rightly questioned how Tony Guilfoyle has been able to avoid the ongoing scrutiny that would be reasonably expected from the Chairman while pursuing his agenda of destroying the Club and selling out to private enterprise.

When Guilfoyle offically took over as CEO in February 2004 he had already assumed the majority of control in the Club for a number of years. He gradually expanded the responsibilities of his position as Assistant CEO. (His formula was to then retain the power and delegate the workload)

Now, as CEO, Guilfoyle wanted absolute power. To achieve this he knew he had to compromise those in the position of Chairman.

COMPROMISING THE LEADERS

John Healy - Chairman No 1
When Guilfoyle became CEO John Healy was Chairman. Happily for Guilfoyle, Healy's position was already compromised. Healy was content to accept the occasional overseas trip, free meals, free parking and the $10,000 he was paid each year. The $10,000 was paid for supposedly "conducting gym classes". Other members conducted similar classes but only received free gym membership for their services.

Healy would dutifully present whatever Guilfoyle drafted for him at meetings and would sign off on the Guilfoyle-scripted "Chairman's Message" that appeared in the Club's Magazine. Healy was getting old and was easily manipulated by Guilfoyle.

John Kennedy - Chairman No 2
John Kennedy was the Committee's "next in line" under their succession plan for Chairman. When Guilfoyle became aware of the plan by John Kennedy and the other three trustees of the Bookmakers Superannuation Fund to implement a skim operation for their own benefit, he knew that if it went ahead he would have an automatic hold on Kennedy. In the middle of July 2004 Kennedy set up a bogus "promotion" company (Super Promoters Pty Ltd) to skim .615% off the assets of the BSF each year and then appointed Equity Trustees as trustee. For good measure Guilfoyle then merged the City Tattersalls Club Super Fund into the BSF (giving Kennedy an automatic benefit at the expense of the staff who were in the fund).

In 2008 Kennedy's bogus "promotion" company received $2 million from the fund but only spent $24,000 on Advertising and Promotion (a nice little earner).

The Member and Employer Representatives were never democratically elected and were always stooges from either senior management or the Club's Committee. Guilfoyle still retains a representative position to this day. Super Promoters is currently being investigated by ASIC and APRA.

Six months into his reign as CEO, with Healy and Kennedy in his pocket, Guilfoyle had no problem taking $200,000 from the Club without the permission of the Committee. Guilfoyle used this $200,000 to set up a business venture (Springs Resorts) with one of the Club's questionable consultants who has been paid in excess of $250,000 over the last few years (an obvious conflict of interest in itself).

When the $200,000 was brought to the attention of the Committee six years later (2010) it was covered up by Kennedy and current Chairman, Pat Campion. An investigation of this matter is currently under review by the Office of Liquor, Gaming and Racing.

Guilfoyle's incompetence, corruption and bullying went unchallenged by Kennedy with evidence showing he even supported it. Time caught up with Kennedy. For the last six months of his Chairmanship he could not face his "life long" friends in the gym when they became aware of the super fund ripoff (some of them lost heavily). Kennedy did not stand for re-election in 2011 and has not been sighted in the Club since.

Pat Campion - Chairman No 3
Guilfoyle assessed Campion's attitude on the Committee to be similar to most of the other Committee members. That is, accept without notice and without question whatever Guilfoyle put forward, put your hand up when required and sit down to a free lunch.

In 2007 Guilfoyle had to look at Campion differently. Kennedy was being groomed to take over from Healy as Chairman with Campion being endorsed as the next Vice Chairman. 2007 was a testing year for Guilfoyle. Too many members were becoming aware of his obvious mismanagement. He manouvered rule changes to take away members rights. He instigated a fear campaign about the impact of the non-smoking legislation to justify spending $7 million on the "Alfresco Gaming Hole" he proposed to put through the middle of the Club. He also had to convince members to approve the purchase of 194 Pitt Street for $9.25 million when the market value was no more than $6 million. Campion was a solicitor. What if he started to take his position seriously now that he was identified as a future Chairman? Guilfoyle was worried that Campion would learn that due diligence was either never carried out or ignored, because the building could never provide members what they were told to approve the purchase. The Club had bought a virtual derelict building that they would never be able to afford to refurbish.

At the same time as members were being asked to approve the purchase (Nov 2007) Guilfoyle organised for the Club to donate $80,000 to an arm of a charity that was chaired by Campion's brother. Members were misled to to believe that this $80,000 went directly to St John Ambulance (who in 2007 had a turnover of $20m, a marketing expense of $4m and a profit of $8m - the same year CTC ran at a loss). It was never disclosed to members that the $80,000 was used to fund an eye clinic in Moree (the Campion family's hometown) and it involved Campion's brother.

Guilfoyle now had Campion well and truly on the hook. Campion was now a willing servant of Guilfoyle.

Campion failed to act when he became aware of the conflict of interest when Guilfoyle formed Springs Resorts with a consultant that has been paid hundreds of thousands of dollars by Guilfoyle on behalf of the Club.

Campion failed to act when he became aware that Guilfoyle took $200,000 without the permission (or knowledge) of the then Committee in 2004.

Campion failed to act when he knew the $200,000 was a lump sum taken in 2004 and not the accumulation of travel and entertainment expenses that is being offset against accrued annual leave (the charade put up by Guilfoyle)

Campion was party to fabricated evidence in the Supreme Court action taken against the Club by a member.

Campion misled the recent AGM by informing members that there were no legal settlements in 2011.

Campion did not disclose to members the $200,000 taken by Guilfoyle and is implicated in the cover-up.

The danger for members is that Guilfoyle and Campion will fast-track the sale of the Club premises hoping that skeletons of corruption will get buried in the demolition.

The plan by Guilfoyle and Campion is to present themselves to members as "White Knights", the saviours of the Club with a proposal - the Club has no alternative but sell out to developers and/or hoteliers. Ironic seeing that they were the main players in orchestrating the Club's deliberate demise.

Save City Tatts Committee

All in the timing

Guilfoyle and Campion are running out of time in their pursuit to sell off City Tattersalls Club

They are currently under investigation so they have to fasttrack the process. Their latest destruction strategy is to hold out on paying even the smallest creditors and not replace employees who continue to form a long line to leave the Club. They hope this will speed up the decline to justify that the sell-off is the only option for members.

These two destroyers will put a plan to members under the guise of "saving the club". Campion continues to aid and abet Guilfoyle's "questionable" irregularities by repeatedly covering them up and the $64m question is "will the expanded investigations into the Club, the Committee, Guilfoyle, Kennedy and Campion be finalised before they can put the sell-off to members?

"The biggest single threat to the survival of our Club is the activities of ... Campion and Guilfoyle" - Pat Campion's message to members (slightly modified by the Save City Tatts Committee to reflect the truth)

Save City Tatts Committee

Spare a thought for Mark Cooper !

City Tatts CEO Tony Guilfoyle has two "alibi's-on-call" - Jan Ellks and Mark Cooper.

Although Cooper's alibi duties might seem attractive, destinations like Hamilton Island and the Snowy Mountains, the reality is different.

When Cooper attends these Guilfoyle/Purdy getaways he is still required to bring along his computer and put in a 8 hour day. He is put under pressure by Guilfoyle to cover for him both recreationally and professionally. Cooper comes back from these trips needing a holiday himself!

Jan Ellk's alibi duties, more often than not, only cover for Guilfoyle up until 9pm, although there have been some midnighters.

While Cooper is referred to by some staff as Guilfoyle's "pet dog", because of the ongoing bullying, it should be noted that even pets can turn on their masters under certain circumstances.

Every dog has his day, Mr Guilfoyle!

Save City Tatts Committee

Round Table Re(Treat) at Boonoona Ski Lodge !

It became obvious this week who wears the pants in the Guilfoyle/Campion relationship. After being directed by Campion to cancel the Melbourne jaunt because it was highlighted in the Herald article, Guilfoyle blatantly defied Campion and went on his own Round Table Retreat to Boonoona Ski Lodge for the past week (at the Club's expense) so that he wasn't deprived of the valuable time he had earmarked to spend with Tania Purdy.

To give this junket credibility Guilfoyle dragged along the Marketing Manager and the Financial Controller. By the way, the total salaries of these for absent employees is over $1 million per annum. (It should be remembered that Guilfoyle took Mark Cooper and The Hyphenator to Hamilton Island last year as his alibi for his holiday with Tania.)

How Campion tolerates this contempt is a mystery (one of many in City Tatts!) and again raises a number of questions. Over the last few weeks Campion has steadfastly defended Guilfoyle in a number of areas and this is how he is rewarded.

By failing to stand up to Guilfoyle, Campion is proving to be not only a disgrace to the Club but an embarassment to the memory of his late father John who was held in the highest regard by the Club and it's members.


Footnote
For those (valued?) staff members who are not up to speed with staff terminology, T1/T2, Ken and Barbie, Bill and Monica and TG/TP are one and the same (or should that be two and the same?)

Save City Tatts Committee

Unsolved Mysteries at the Bookmakers Superannuation Fund

After all the publicity in the papers there is still one thing that remains a mystery in the Bookmakers Superannuation Fund and that is the role of Keith Free.

Keith Free and the Bookmakers Superannuation Fund
For those of you who don't know, Keith Free was the Treasurer of City Tatts for 19 years until he retired in 2009.

The more interesting fact is that he also ran the Bookmakers Superannuation Fund for a long time before it became a Public Offer fund in 2004. (The BSF office was located on the second floor of City Tattersalls Club.)

Then John Kennedy came along!
As the whole world now knows (as a result of coverage in the Sydney Morning Herald and the Financial Review) in 2004 there were big changes in the Bookmakers Superannuation Fund.

John Kennedy (Committee member, and later Chairman, of City Tatts) set up a company called Super Promoters Pty Ltd to get fees from the BSF. He did this, by the way, while he was a Trustee of the fund. This nifty little scheme eventually made $11 million for him, and the other three amigos, by the time they sold it to Diversa in 2009.

Here is the real mystery of the Bookmakers Superannuation Fund
Given the amount of money made from the scheme (at the expense of members) you would think that Keith Free must have had strong feelings about it, either for or against.

Since he built up the Bookmakers Superannuation over a long time you might expect him to be totally opposed to what Kennedy had done. But that is not the case:

1. He obviously knew about the Super Promoters scheme and no member ever heard him say anything against it.
2. He worked very closely with John Kennedy on the Committee of City Tattersalls Club especially when John Kennedy became Chairman.
3. He was the Treasurer of City Tatts when the City Tattersalls Staff Super Fund was rolled into the Bookmakers Super Fund (which meant that every member of the City Tatts fund started to pay fees to Kennedy).
4. He was an Employer Representative on the policy committee of the BSF after the Super Promoters scheme was set up.

So he certainly was not against the scheme.

But if he approved of it why did he not insist on his share of the profits?

Save City Tatts Committee

An Open Letter to Patrick Campion

Dear Sir,

In your recent correspondence sent to staff on Tuesday August 7 you refer to staff at City Tatts as Valued Staff Members.

Valued Staff Members?

These are the same valued staff members who don't get a regular roster until a couple of days before the shifts are to start. This is despite repeated requests for rosters to be passed to staff in advance on many, many occasions.

These are the same valued staff members that you and your executive team headed by Guilfoyle thanked last Christmas for an entire years work with a tiny cup cake (which staff had to sign for).

These are the same valued staff members who were not paid public holiday rates, as award requirements dictate, during public holidays over Christmas last year and early this year.

The same valued staff members who only got paid their public holiday rates when they complained about not being paid.

The same valued staff members who don't receive any overtime, even when colleagues are sick or indisposed.

The same valued staff members who are expected to work full shifts with no support often on their own when fellow staff do not show up for shifts.

The same valued staff members who thought you looked like a rabbit trapped in a spotlight when delivering you spiel about the recent newspaper articles.

The same valued staff members who don't believe a word you say!

Signed
The Valued Staff Members Group, City Tattersalls Club

City Tatts are saving costs !!

First there was the cancelled holiday to Melbourne for the committee, executive staff, Ms Purdy and Mr Guilfoyle (that Guilfoyle-Purdy has a ring to it, doesn't it?). Then there was the stripping back of poker machine staff.

In a business that has declining membership revenue and massive losses in all restaurants, that is wholly and solely dependent on gaming revenue, what do they do?  Cut back on poker machine technicians of course !

Now if you are unsure what the issue is here, a poker machine technician is the person who ensures that poker machines are working to full capacity. They are what a motor mechanic is to a car dealership or what a pastry chef is to a bakery. They are as important as the battery in a battery operated torch or the gas in a gas lamp.

Now that we have painted the picture we can advise that Guilfoyle has cut back on technician hours. It is not clear whether he was advised to do so or decided on this foolhardy initiative on his own.

Come to think of it, he must have decided on this himself because it fits in with every other foolish idea he has come up with while he has held office at City Tatts.

Consider the facts:

• Pokies deliver in excess of $20,000,000 revenue yearly to City Tatts club.
• Technicians work for average wages and keep the machines working at all times the Club is open.
• Guilfoyle delivers nothing except heartache and bad decisions while receiving in excess of $500,000 in wages.

The Solution

• Replace Guilfoyle with two technicians and a CEO on a wage more in keeping with a fair wage for managing a registered club. For this swap City Tatts would ensure their only "cash cow" was working to maximum capacity and better decisions would be made, not to mention less staff turnover, improved staff morale, happier members and a club not for sale! All this for $250,000, representing a saving of over $300,000!

Sounds like a good idea to us - and we are sure it will sound like a good idea to most.

Miss Management

Well, who did burn the toast at City Tatts?

Many funny things have happened at City Tatts during Guilfoyle's time in the big chair so what follows will not surprise.

Recently a high-paid City Tattersalls "executive" attended Zest Restaurant for a free breakfast. No, not a breakfast with that genius Keith Free (remember this mental giant annointed Guilfoyle) but a free breakfast - the kind where someone else is paying for it.

The breakfast consisted of items which included at least two pieces of toast. When the toast was brought from the kitchen the "exec" turned their nose up at what was served and declared "it's burnt". Staff on duty tried to appease the "exec" by offering more toast to which the "exec" simply said "I am busy, you can't even serve toast properly. I don't have time to wait for toast that isn't burnt, I have a meeting to attend". As the exec left to attend their meeting they actually took their toast with them. The entire episode was witnessed by a member who thought the show was quite comical, to say the least.

Now was the the toast burnt or not? Obviously not, or at least not too much, because our "exec" didn't mind taking it in the end. Considering the toast was eventually taken by the exec why did they create such a scene about it in the first place? The answer to this is simple. They do such acts because they can, a trait which is plentiful when given the Guilfoyle green light !

Now when Trevelyan Bale was employed in the kitchen on a salary of $250,000 we didn't hear of any cases of executive burnt toast. Does this mean Trevelyan must return to take charge of executive toast production?

Who was the "executive" involved in Toastgate? Tania Purdy, of course - after all who else would complain about burnt toast? Who else at City Tattersalls except for Guilfoyle would think themselves so important to make such a noise about bread not cooked to their liking?

What is most surprising is that Tania was only having toast for breakfast. You could be excused for thinking that she would have more to eat to build strength and energy levels considering she has more than a "hectic workload" to manage most afternoons and some evenings.

Miss Management

The NEWS at City Tatts

Members of City Tatts who take the offer of reading newspapers supplied by the Club noticed that the free newspaper service was somewhat diminished by usual standards the week before last.

On Saturday 11 August, no weekend Sydney Morning Heralds could be found in the Club !

Did the newspaper stop delivering papers to the Club just like the dry cleaner stopped delivering laundered uniforms to the Club because of unpaid outstanding accounts or did Tony Guilfoyle just decide to hold back on the Heralds on that day?

The members didn't think too much about it until Monday 13 August when it was discovered that page 2 of the Sydney Morning Herald was missing.

Why would the Saturday 11 August weekend Herald not be available for members to read in the Club?

Why would page 2 of the Sydney Morning Herald on August 13 not be available for members to read in the Club?

 What makes this even more intriguing is that no such thing happened on Saturday 18 August and Monday 20 August.

Miss Management

Mark Cooper - would you please explain !

Mr Mark Cooper, would you please explain the outrageous salary you take home for delivering nothing.

You are the City Tatts financial controller and your salary is in excess of $200,000, Over the past 10 years the Club has lost money, lots of money, so where have you been controlling the finances?

The members of City Tatts have come to the conclusion that while you masquerade as a financial controller the facts are that you are just a simple bookkeeper. Now there is nothing wrong with being a bookkeeper except as a bookkeeper you would not expect to earn a salary above $60,000.

If you are a financial controller you have failed miserably.

If you are a bookkeeper you are massively overpaid.

So which is it Mr Cooper, are you a failed financial controller or an overpaid bookkeeper?

Remember you are being paid out of members funds so we would like to know.

The gall you have displayed in taking a huge salary for failure as financial controller makes the members ask - is your performance indicative of Mr Cooper or Mr Bean?

The members think Mr Bean is far more appropriate until you can justify your huge salary for delivering absolutely nothing.

Miss Management

Panic at City Tattersalls Club !!!

Something shocking happened at City Tatts last night.

Tony Guilfoyle and Jan Ellks worked late !

Yes, we know that sounds hard to believe but it really happened. It's a shock because nobody can recall this ever happening before. (By the way, Tony Guilfoyle is paid $540,000 and Jan Ellks gets $135,000.)

Why did Tony Guilfoyle and Jan Ellks work late?
If you thought that they worked late to do something special for members, like bringing back entertainment or offering restaurants that members actually want, then you are sadly out of touch with the way City Tatts is run now.

The reason for the late shift is that the media have started to take a close look at City Tatts and Guilfoyle is starting to panic.

Guilfoyle doesn't realise that he has shown his true colours
Just stop for a second and think about what is happening here. At the moment City Tatts faces mounting problems, every one the result of sustained mismanagement. This is just a small sample:

• Restaurants losing over $300,000 each every year
• A disastrous purchase of 194 Pitt Street that costs the Club over $700,000 every year in interest alone - while the building is mostly empty.
• Suppliers refusing to deal with the Club because of unpaid bills
• Astonishing waste of members' funds on radio advertising, legal expenses, holidays for the Committee and failed building projects
• Falling membership
• Staff morale at an all time low

Despite the above problems (and many others) Guilfoyle never once felt any need to be in the Club on a Monday night, or any other night. But tell him that his mismanagement is going to be exposed in the media and he drops everything and comes to the Club !

Save City Tatts Committee

City Tattersalls Club - Big Salaries for Dismal Performance (Part 2)

Money is being wasted left, right and centre at City Tatts.

Nowhere is there greater waste than in the inflated salaries and bonuses given to a few favoured employees despite a track record of total failure. Here is another example of where members' money is being wasted on salaries.

Tania Purdy
If you're in City Tatts on a regular basis you will know that staff morale is plummeting. The main cause of this is resentment at the insane salaries given to a few senior employees regardless of results, while the majority of staff are on award wages. The main focus of this resentment at the moment is Tania Purdy.

Tania Purdy is paid $100,000 a year !
That's right, we have been told by a number of sources that she is now being paid $100,000 a year.

Why is Tania Purdy paid $100,000 a year?
Naturally, we were curious to learn why a fairly new employee with no particular role would be paid $100,000, especially when the Club is cutting back in so many areas. Well, we asked around and these were the replies we got:

• "She works closely with Tony Guilfoyle"
• "Tony Guilfoyle takes a keen interest interest in her performance"
• "She has a special relationship with Tony Guilfoyle"
• "She performs certain duties better than Jan Elks"

Here at Save City Tatts we are simple people and we are not sure what to make of these answers. Maybe our readers will understand. We don't care too much about any of the above. We just don't see why the members of City Tattersalls Club should pay for it.

Hamilton Island
Speaking of things we don't understand, there was a trip to Hamilton Island in 2011 by four employees of City Tatts. At the Club's AGM in May members asked the Chairman about it and managed to get some information on it. Like so much about the Club these days the more you find out the stranger it seems:

1. This trip was paid for by a radio station, MIX 106.5. We are not sure why a radio station would be so generous but then they have received at least $3 million from City Tatts since Tony Guilfoyle became CEO so some token of gratitude would probably be in order.
2. The four employees were Tony Guilfoyle, Tania Purdy, Mark Cooper and The Hyphenator (Lisa-Faye Tudhope-Wickham).
3. While at Hamilton Island it seems that Guilfoyle then travelled backwards and forwards between Fiji (where his family was), Sydney and Hamilton Island. No, we don't understand this either.

Will Tania Purdy send the Club broke?
We are starting to worry that Tania Purdy might send the Club broke. And we don't just mean her inflated salary. We mean her cleaning bill.

A recent strange incident highlighted the precarious position of the Club. It seems that a dry-cleaner refused to release uniforms cleaned for City Tatts because they had not being paid for months. This seemed unlikely to City Tatts staff so they asked for copies of the unpaid bills in order to follow it up with the City Tatts accounts department. But when the bills arrived they were found to include dresses which did not come from City Tatts. Apparently the dresses were for Tania Purdy !

Save City Tatts Committee

The Strategic Plan for City Tattersalls Club

There is a strategic plan for City Tattersalls Club. Not the mythical, vague "Strategic Plan" that Tony Guilfoyle used to refer to in his useless slide presentations at AGMs (but that no one was allowed to see). No - we mean the real Strategic Plan. The Strategic Plan that explains what has happened to the Club since 2004.

It is not possible for City Tattersalls Club to trade so badly
It doesn't take a genius to see that City Tatts is struggling. But it is only when you dig a little deeper that the scale of the disaster becomes clear. Basically, the Club has performed so badly since 2004 that it can only be intentional. There is no conceivable incompetence, inefficiency or mismanagement that could produce results this bad.

Just consider the situation Guilfoyle inherited in 2004. City Tatts had thrived for 100 years through recession, depression and world war. It owned a large building in the best possible location in Sydney. It had restaurants, bars, gyms and other facilities that were much appreciated by its loyal members. The population living in the city was growing every year. And one more thing - yes, it had over 400 poker machines making a profit of $24 million every year.

What has happened since then is beyond belief. Everything he has touched has failed. Every building project has failed. Every restaurant is failing. (It is not possible for a restaurant to lose $400,000 every year, when you have no rent to pay.) It has been an 8 year track record of total failure.

How did he get away with failure for so long?
You have to wonder why the Committee let him get away with this for so long. Even the members knew as early as 2006 that he was a complete idiot. One reason is that he always took special care to look after the Chairman. We have provided extensive information in previous blogs on Save City Tatts about the three Club Chairmen since 2004. Here it is only necessary to point out that all three were receiving something from the Club that seems to have made them reluctant to rock the boat. So John Healy got his overseas trip and $10,000 a year for gym classes (even though others doing similar classes got nothing). John Kennedy was allowed to run the Bookmakers Superannuation Fund skim operation, making millions for him and the other Three Amigos. And a clinic in Moree which just happens to be run by Pat Campion's brother gets a donation of $80,000 from City Tatts, but the members of City Tatts are never told.

194 Pitt Street is the key to this sordid tale
More and more it looks like buying 194 Pitt Street is the key to understanding the real game. Other internet blogs provide a detailed account of the purchase. In a nutshell, it has been an unmitigated disaster from the point of view of members.

Given that members got nothing from the purchase you have to look at what they were told when they approved the purchase. Most of the promises made to members turned out to be false. For instance, the promised cafe. restaurant and administration office were instantly rejected by the council. This leads you to question the due diligence supposedly done prior to purchase. Basically, either no due diligence was done or it was totally negligent.

But when you look at the purchase from the point of view of someone who wants to hand the Club's property to a developer at a later date it starts to make sense. For one thing, the $9.8 million debt burden instantly increased the odds of the Club getting into financial difficulties and being "forced" to sell it's building. Buying 194 Pitt Street also does a lot directly for the developers, giving them additional options to maximise their profit.

The timetable for selling the building
Members fear that the storm clouds gathering over Tony Guilfoyle will prompt the parties to bring forward the plan to sell the building:

1. He is under investigation by the Department of Gaming & Racing over the $200,000 he took from the Club, without approval of the Committee. (Not that they could have approved it anyway - loans to employees are prohibited by the Club Rules.)
2. The relentless exposure on the internet of his dismal failure is getting harder to ignore.
3. He is trying to sell his motels in Nowra and Mittagong, so he may have money problems.
4. A few senior employees who were always considered to be on Guilfoyle's side now seem to be discreetly preparing for his departure. (Basically he bought their loyalty with members' money by paying them twice what they would have got elsewhere.) We interpret this as an obvious plan to distance themselves from him for when the proverbial hits the fan.
5. Even the Committee of City Tatts are starting to doubt him. (Here at Save City Tatts we had extreme difficulty believing this. We have watched for years as the Committee let him do whatever he wanted without a squeak out of them. But careful observers of the Club say they have detected the very early signs of the Committee turning against him. As a small example they notice that the level of propaganda in the Club magazine has declined significantly in recent issues.) 

Who are the players in the game?
Reports from inside and outside the Club have identified the frontrunners in the race to get control of the Club's prized asset - it's property. Last year a meeting was held in March in the Club between a well-known hotelier, a person holding high profile racing positions, a financier and a former City Tatts Treasurer. There have been further meetings and the Club Corruption Vigilante is certain that the property is now "in play".

Save City Tatts Committee

Fruitjuice at City Tattersalls Club !

Many of you would be aware that there is a discussion on the internet about the recent Life Membership of City Tatts given to Martyn "Fruitjuice" Berry. Apparently some people have woken up to the fact that Fruitjuice has done absolutely nothing since he has been on the Committee.

While this may have come as a surprise to some, here at Save City Tatts it is old news. In fact, we knew what to expect from Fruitjuice even before he was elected to the Committee. A very shrewd observer of City Tatts in the Dance Club warned us about Fruitjuice as soon as he announced that he was going to run for election. This Dance Club member was certain that Fruitjuice was just a pompous old fool who had been asked to run by the existing Committee precisely because he would not raise any difficult issues, would not tackle management and would not "rock the boat" in any way. This assessment, made back in early 2009, has been proved to be exactly right. Fruitjuice has turned a blind eye to every financial disaster in the Club.

There were a few clues that members should be wary of him. In his "100 Words" election pitch from 2009 he said "I have had an association with City Tatts for over 35 years". What does that mean ? Did he walk past the front door every day ?  The truth is that he had only been a full member of City Tatts for one year when he wrote that !

In fact, it's hard not to laugh when you read his "100 Words" election pitch from 2009. Back then he talked about his career in financial services with Westpac Financial Services and MLC Client Services. Well, for all the financial acumen he has demonstrated on the Committee of City Tatts, he might as well have had a career of emptying garbage bins.

Save City Tatts Committee

Gravestone for City Tattersalls Club

In life, things generally move in the opposite direction once they reach their extreme, or to explain in another way, in everything there is a beginning, or the time of minimum existence and just before the end, the time of maximum existence. What comes after, we all know, death of a relationship, friendship, business, or of a million other processes, actions and events. If we understand this we might be able to prepare for the end so it is as smooth as possible, and if we are smart it may lead to a new beginning. It seems to me that the CEO and the inner circle of the committee believe in: ‘Luck is when opportunity meets preparation” They have had their “maximum existence” and are now moving to the death phase of the club as we know it. After death there must also be a rebirth or a new beginning.

 Let us all imagine a likely scenario: members are finally told that due to the world recession, the inability of Chinese gamblers to get their visas, change of weather patterns or due to the large number of boat people (you can insert here any excuse you might think of…just to make it more interesting), the club is forced to close its doors, unless a saviour is found who is willing to bankroll a project that guarantees the club’s existence.

In my opinion, and as corporate intellectuals would say, we have finally turned the corner, so members should start working on a plaque that might be placed, possibly on a side entrance of a five star hotel owned by the above mentioned saviour (or his company) and maybe managed by our current fearless leader and the “all the way to court loyal committee team” (or their company). In a way, a gravestone might be more appropriate, but will certainly not be allowed by the new leaders and their PR team or directors.

Let’s all think about this, it could say something like:                      

Here lies over one hundred of years of history, dedication and loyalty of a large body of CTC members, who gave of themselves that a five star hotel might be created and its owners and managers be made wealthy and prosperous.

Of course, some future researcher might find this not quite accurate, he/she may conclude that members were never told the truth, but by that time all will be forgotten, the main players may even be in another country, enjoying the success of their forward planning. The researcher might even come up with a theory that the operation of taking the club away from members was the work of an organized crime fraternity. Crime like this is big business and big business requires elite financiers and professionals. The entrance of elite corporate players, started years ago, and as the directors, advisors, consultants and lawyers of high business calibre, came in, the demarcation line between “legitimate” and “illegitimate” actions blurred. The true plans were protected by hard to understand legal definitions and by an army of advisors and lawyers all working together for a common goal, as the architect of a large offshore mutual fund would say: “Money has a strange kind of purity”.

The goal is soon to be clearly seen, and with it, all the “errors” in management will be shown as just small stepping stones to a Grand New Hotel in Pitt Street.

Club Corruption Vigilante

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City Tattersalls Club - AGM 2012

City Tattersalls Club held it's Annual General Meeting on 22nd May 2012 and a number of very interesting issues arose at the meeting, at least to those who carefully observe everything about the Club.

Financial Questions from members
The main part of the meeting consisted of financial questions from members. That's good because it is the only part where any real information is given to the meeting. The Chairman's and Treasurer's reports basically consist of weak excuses to explain the Club's poor management, with very little useful information.

Before we look at some specific issues we have to highlight something that the Chairman, Patrick Campion, told the meeting before he got on to the questions. He said that the Club would answer financial questions as required by the Club's rules but was only obliged to answer questions if the disclosure was required by the Registered Clubs Act. This is totally false. There is no connection between the requirement to answer members' financial questions at a meeting and the disclosures required by the Registered Clubs Act. The requirement to answer financial questions is contained in the Club's Rules attached to the City Tattersall's Club Act. Even if there was no Registered Clubs Act, the Club would still have to answer financial questions at meetings according to it's own rules ! 

Campion is a solicitor. So whether he deliberately tried to deceive members, or just has no idea, we can't say for sure. Here, at Save City Tatts, we are not solicitors but we spent five minutes looking at this and the legal position is clear. How could a solicitor not know ?

Radio Advertising
One of the very interesting facts to emerge from financial questions was that radio advertising cost $246,000 in 2011. This is interesting because when members asked a few years ago it was $500,000 and a few years before that it was $900,000 (yes, $900,000 in one year, that is not a misprint).

We have known for a long time that the money spent on radio advertising was a disgraceful waste of members' funds but in their own roundabout way the Club has now basically admitted this. Just consider a few basic facts about radio advertising at City Tatts:

1. City Tatts used to spend $900,000 a year on radio advertising but once members started asking questions about it the amount has dropped every year. This makes no sense. If it was money well spent it would make no difference whether members asked about it or not. Clearly, the scrutiny from members exposed it for the fraud it always was.
2. Every time members asked about it, management have always assured them that it was successful, that they were pleased with it, that it was effective etc. etc. The problem is that the same answers were given whether they were spending $900,000, $500,000 or $246,000. It is not possible that spending $900,000 or $246,000 is equally valuable. If spending $900,000 was bringing great benefits to the Club, then they are making a big mistake today in only spending $246,000. If spending $246,000 is enough, then the excess $654,000 was a disgraceful waste. Either they were lying back then or they are lying now.
3. In any case, it is clear from listening to the answers at the AGM that management have no idea if radio advertising brings any benefit to the Club. Any club that spends $900,000 on anything should be able to clearly demonstrate the benefit to the club or else you don't spend it !
4. Apart from the nonsense "explanations" provided by management, it is obvious to members that spending hundreds of thousands of dollars on radio advertising is a complete waste of members' money. Here is our simple suggestion: Cancel all radio advertising today and give the money directly to members in door prizes, free drinks and subsidised meals. This would have ten times the promotional impact.

194 Pitt Street
194 Pitt Street is always of interest to us (and should be of interest to all members who care about their club) because it has been a financial disaster from the day it was bought in 2007 and nothing has changed since. Questions at the meeting reminded us of a few issues about the building.

Campion told the meeting that 194 Pitt Street "completely complies with all fire regulations". We are not sure what to make of this answer. Our sources have always told us that the building does not comply with fire regulations. So who is right? Well, remember that only one floor of the building has ever been renovated for use by members - the other seven floors are vacant (or "used for storage"). Maybe 194 Pitt Street "complies with all fire regulations" as it is currently used - that is, using the ground floor only. And, in this scenario, the other seven floors comply as long as they are not used by members. This may be the explanation - members need to find out more about this.

Another subject that caught our eye was the valuation of the building. One member asked what the current valuation was (a very good question). Jimmy Chen's answer was that 194 Pitt Street was regarded as "core property" of the Club ("core property" is a term from the Registered Clubs Act) and was therefore included in the Club's total premises valuation of $63 million. That is very convenient for management because it allows them to hide the disaster from members. But, hold on. National Australia Bank only has a mortgage over 194 Pitt St - they have no mortgage over the rest of the premises. Well, if that's their only security, they must have a valuation of the building. Maybe Jimmy Chen could ask them what it is and pass it on to the member who asked the question.


Save City Tatts Committee
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Trouble at Balmain Leagues Club - Could the same happen at City Tatts?

That was a very interesting story on the weekend on the front page of the Sydney Morning Herald about the financial problems at Balmain Leagues Club. Naturally we wondered if the same could happen at City Tattersalls Club.

What happened at Balmain Leagues Club
Let's summarise what happened at Balmain Leagues Club and use it as a blueprint, or template, for what could happen at City Tatts:

1. A club gets into financial difficulties and owes a lot of money.
2. Someone close to the club comes up with a plan to "save" the club. This plan is presented to members as the only option to save the club.
3. The "saviour", whose only concern is to save the club, just happens to make millions from the "rescue" - always from redeveloping the club's property..(Property is the key.)

Could it happen at City Tattersalls Club?
With this blueprint in mind, let's look at the present state of City Tatts:

1. City Tatts has been badly run for years and now owes a lot of money (about $20 million to National Australia Bank alone). It was particularly interesting to read that Balmain Leagues Club was "bleeding ... through previous risky property acquisitions and declining patronage of it's poker machines". Sound familiar?
2. We have every confidence that many of the people presently doing so well from City Tatts would be delighted to come up with a plan to "save" the Club. Here we are thinking of top management, builders, consultants and one or two on the Committee. (You only have to think back to John Kennedy's role in the Bookmakers Fund, where he generously agreed to roll all of the City Tattersalls Club Staff Super fund into the BSF, which just happened to increase his own income.)
3. City Tatts owns a prime CBD property and we know that the Committee have dreamed about redeveloping the City Tatts site for a long time. John Healy used to talk about putting a hotel on the site. We would expect that any property developer who made millions on the redevelopment would be very grateful to any insider who could deliver the property to them.

Realistically, isn't this where City Tattersalls Club is heading?
When you look at how City Tatts has gone since Tony Guilfoyle became CEO, you have to worry that the Club is heading the way of Balmain Leagues Club. Even back in 2006, many members speculated that his real agenda must be to run the Club into the ground. They came to this conclusion by simply observing his actions as CEO. He inherited a thriving club with a fantastic location, great facilities, and loyal members and with every major decision or project he has taken the Club closer to collapse. Even a complete idiot would have got a few right by pure chance.


Save City Tatts Committee

Artwork at City Tattersalls Club !

Some of you may have noticed new paintings around City Tattersalls Club. As with everything else in the club. there is more to this than meets the eye.

City Tattersalls Club pays $54 000 to display these paintings
Thanks to members who asked questions at the recent AGM, we now have some information on the arrangement, in particular that City Tatts pays $54 000 a year to have these paintings displayed.

From what we have been able to find out, it seems that these paintings belong to some Aboriginal art gallery and while on display at City Tatts are available for sale. If a member does happen to buy one, the gallery makes a commision and the artists gets what's left.

And for providing a showroom for the gallery- City Tatts  pays them??
This seems like a really good deal for the gallery and the person that introduced it to the City Tatts Club, but it certainly has no benefit to the Club or the members. This has only created more unreasonable and unjustifaible spending by the management and the committee.


Save City Tatts Committee

City Tattersalls Club - Jimmy Chen's Treasurer's Report

The City Tattersalls Club Treasurer's Report for 2011 was presented to members at the AGM on 22nd May 2012, and also included in the May-July Club magazine.

Jimmy Chen's Treasurer's Report
Overall, the Treasurer's Report told members very little. As has been the trend at City Tatts in recent years, most of the important financial problems were ignored or explained away with lame excuses.

But Jimmy Chen showed that he has fully embraced the concept of disinformation to members with his latest report. His comments about how the Club's restaurants and bars performed can not be left unchallenged.

What Jimmy Chen told members
In his report, Jimmy Chen said "It is pleasing to report that Food and Beverage revenue has recorded year on year growth for the past seven (7) years. For 2011 our Food and Beverage departments increased revenue by 1% or $68,000." That's it - that was his only reference to Food and Beverage.

How Food and Beverage actually performed in 2011
These are the the facts of how Food and Beverage performed at City Tatts in 2011, which emerged only because members specifically demanded the information under the Club's Rules:

1. Food and Beverage at City Tatts lost $650,000 in 2011.
2. The Esperanto restaurant lost $400,000 in 2011. That is not a misprint - it actually lost $400,000. In fact, it managed to lose $409,000 on sales of $919,000. When you realise that they have no rent to pay, that might make it the worst restaurant performance in Sydney. Obviously, looking at these figures would cause anyone to question management's ability, to put it mildly. But we have checked with people in the restaurant trade and they have told us that even total stupidity would not produce results this bad. And Jimmy Chen? He doesn't even mention it. Maybe he doesn't know.
3. Zest restaurant lost $300,000 in 2011.
4. They even manage to lose money on beverage. The Esperanto managed to lose $105,000, and Zest managed to lose $82,000, on beverage alone ! Since the Club would charge customers, on average, twice or even three times it's cost price, this also must be some kind of record for losing money.
5. Remember, they "had to" close the Smorgasbord because it was losing money. In the three years that Jimmy Chen has been Treasurer, the Club's top two restaurants have lost a combined $2,200,000 !
6. The other notable point about the Esperanto and Zest is that they are not cheap. If the meals were being given away at half-price you could understand some losses. But they are charging top dollar for everything, which makes these losses all the more inexplicable.

This is not acceptable !
To tell members that revenue has risen and make no mention of the horrendous losses during the year, or indeed for the past seven years, is a disgraceful attempt to mislead members. Besides, what is the point of increasing revenue if you are losing money on every meal?


 Save City Tatts Committee

City Tattersalls Club - Big Salaries for Dismal Performance (Part 1)

Money is being wasted left, right and centre at City Tatts.

Nowhere is there greater waste than in the inflated salaries given to top management for dismal performance. Here is an introduction to where members money is being wasted on salaries.

Tony Guilfoyle
Guilfoyle has been a failure as CEO from day one. Almost everything he has tried has been a flop. If you were to examine his top 10 projects as CEO, whether restaurants, building jobs, property purchases or just general management duties, you would find that 9 of them are failures, sometimes hilariously so. In fact, you will have to look hard to find the one that is a success. But a track record of failure is no longer a barrier for top management at City Tatts. Instead they get increases and bonuses. Here is what City Tatts has paid Guilfoyle since he became CEO -

Year Ended 31 December 2004          $410,000
Year Ended 31 December 2005          $410,000
Year Ended 31 December 2006          $430,000
Year Ended 31 December 2007          $430,000
Year Ended 31 December 2008          $460,000
Year Ended 31 December 2009          $530,000
Year Ended 31 December 2010          $540,000
Year Ended 31 December 2011          $540,000

Some things about City Tatts are so strange that it is no wonder people don't believe them when they are told for the first time. Here is someone who clearly has no ability of any kind to run the Club and yet he has been given $3,750,000 in 8 years. And the best part is - he is only there 3 days a week !

Michelle Abbey - Million Dollar Baby !
Michelle Abbey was the first high profile appointment by Guilfoyle after he became CEO. She was paid an insane salary of $250,000 per year as Marketing Director and was a total failure. In the four years she was at the Club she received a cool $1 million. She would not have brought in enough revenue to cover her own salary, never mind contribute anything to the Club.

She is also a perfect example of everything that has gone wrong with City Tatts. The whole notion of a Marketing Director on $250,000 at City Tattersalls Club is ridiculous. The Club's facilities, lacation and tradition provide all the promotion necessary. City Tatts was a thriving club for years without any Marketing Director. And, with the greatly increased population living in the city centre, it should be doing even better now.

There is another reason why paying someone $250,000 a year to promote the Club is nonsense. At the same time that Guilfoyle hired her to promote the Club, he started to take away the very things that used to bring people to the Club !  So the Smorgasboard (probably the Club's greatest attraction) was closed down, Then entertainment was reduced and eventually stopped. Other restaurants and bars were closed before spending millions on new restaurants and bars that members rejected. It simply makes no sense to pay huge salaries to attract people to the Club while you remove the very things that have proven in the past to attract people to the Club.

Members are being deceived in other ways by these insane salaries. By paying someone $250,000 a year, Guilfoyle is trying to convince everyone that City Tatts is a large complex business that is difficult to run. In fact, it is a very simple operation that anyone could run using basic common sense. If you stopped somebody at random walking past the front door they would run the Club better than it is now.

Trevelyan Bale
Trevelyan Bale was a chef who was hired on a salary of $250,000. That, in itself, tells you how insane City Tatts had become by then. The idea of paying $250,000 for a chef in any club is madness but squandering members' money was in full swing by then. (Bale's salary dropped to around the $200,000 mark later - we're not sure why.) Meanwhile, of course, the majority of the staff were paid minimum wages.

It goes without saying that he was a total failure. During the time he was there, restaurants were probably the worst performing part of the Club. The losses racked up while he was in charge were staggering. Someone calculated that restaurants and bars lost over $4 million while he was there. Obviously his own bloated salary contributed to these losses, but aside from that there must have been astonishing incompetence to lose that kind of money.

What is even more amazing is that restaurants and bars used to do well at City Tatts. In the past they were run much better by people on half that salary. And don't forget that back then each restaurant had it's own kitchen. By the time Bale arrived the Club had a centralised kitchen which was supposed to provide big savings. So, if anything, it should have been easier for him. So, either he is even more incompetent than he appears or the centralised kitchen was another grandiose building project that failed.

Jan Ellks
Jan Ellks is Guilfoyle's secretary. We are not sure what her qualifications were to get the job but it should be a fairly easy job given that Guilfoyle is only there three days a week on average. But this is City Tatts, so it will not surprise you to learn that she is now paid $135,000 a year !  That's right - City Tatts pays Jan Elks $135,000 a year.

This is how members' money is being wasted. Do you really think that Jan Elks would get $135,000 a year if Kevin Smith or Bill Hurley were paying it from their own pockets ?  Not a chance - but if members are paying it (and the members don't know) then don't worry about it. Incidentally, we have checked around the CBD and the maximum salary for what she actually does is $50,000. So, how much has she been overpaid in the five years she's been there - $200,000? $300,000?  How's that for waste?

Save City Tatts Committee

City Tattersalls Club - Sydney's Leading Club (For Excuses)

One of the best indications that someone can't do their job is the amount of excuses they use. Ever since Tony Guilfoyle got the top job at City Tatts, members have been subjected to a barrage of jargon, hype and propaganda like never before. There is an underlying thread to this propaganda onslaught - they are all excuses to hide his inability to run the Club.

City Tatts is a very simple operation. It has a few bars and restaurants and 400 poker machines. In the past every part of the Club was easily managed and no excuses were necessary.

The list of excuses used in recent years has grown so big that it's hard to remember them all. So to help you, here is a selection of the excuses used since 2006, together with the reality they are trying to hide. Some of these are truly hilarious, although they show the decline of a once great club.

"..the difficulty of being landlocked on all sides.." (John Healy December 2006)
City Tatts owns a large building in a fantastic location in the centre of Sydney. The passing trade alone guarantees a successful club. Only a complete idiot (or a con-artist) would see that as a disadvantage.

"..we are behind on our building works program due to Management of the operations being directed towards Member issues.." (John Healy June 2007)
It was Healy's decision to embark on a spiteful campaign to reduce members rights - no one forced him to do that. Besides, what possible effect would that have on a building program ?

"..being able to position the Club closer to the Pitt & Market Street intersection and the Pitt Street Mall is of huge significance.." (John Healy March 2008 on buying 194 Pitt St)
When you read something like this you have to wonder if Healy even read it himself before he sent it to members. This is coming from the man who thought our city centre location was a disadvantage. Now he is happy to spend $9 million on an old run-down building - to get us 6 metres closer to the corner. Basically, he is trying to convince us (or himself) that everything in the Club would be so much better if only we were 6 metres closer to the corner ! But the most hilarious part of all this is that, to this day, the additional street frontage has never been used. Now that is something of huge significance !

"..the club continues to trade reasonably well in spite of all the negativity which is being peddled by the media.." (John Kennedy May 2009)
Yes, he actually said that. It's a pity he never stopped to ask why City Tatts was the only club in Sydney whose trade was affected by this "media negativity".

"The closure of Centrepoint has impacted negatively on club trading.." (John Kennedy November 2009)
They used this excuse for about 2 years. The only problem was that the re-opening of Centrepoint did not impact positively on club trading - which exposed this "explanation" for the excuse it always was.

"..a postal ballot...will cost the club of a minimum $30,000.." (John Kennedy August 2010)
Obviously Kennedy feels that money spent on members is wasted. But in the same magazine he talks about a "research trip" to Singapore, Macau and Hong Kong but does not mention the cost. It cost $56,000 for 4 people ! (including Kennedy)

The other hilarious aspect of the "research trip" is the reference to how casinos in Macau have coped with "the restrictions on Visas for mainland Chinese". Apparently, "their strategies will be of great interest as to whether they are applicable to the CTC circumstances" !! Really ? How Exactly ? Is Clover Moore going to require visas to travel from Parramatta to Sydney CBD ?

"..abnormal expenses were attributable to a handful of members.." (John Kennedy February 2011)
The handful of members were the ones who knew how badly the Club was being run and consistently tried to alert other members before it was too late. Kennedy knows he should have taken action years before on Guilfoyle's incompetence. That would have removed the cause of member protests. The "handful of members" were doing what Kennedy should have done.

"..there will be ongoing costs to adequately defend this matter.." (John Kennedy February 2011 on the Supreme Court case)
Another blatant attempt to deceive members. What Kennedy does not say is that the member took action in the Supreme Court only after the Club refused to have the case heard by an independent arbitrator - where Kennedy would have to prove his allegations, not have them "rubber-stamped" by a weak committee. The Committee are entirely responsible for the costs of the Supreme Court case (now up to $150,000).

"..the recent long period of wet weather didn't help matters.." (Patrick Campion May 2012 "explaining" the Club's poor trading)
Well, it had to happen. It was only a matter of time before someone blamed the weather for how City Tatts is doing !


Save City Tatts Committee
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The decline of City Tattersalls Club - who is to blame? (Chapter 4)

There is no question that City Tattersalls Club has gone downhill dramatically since Tony Guilfoyle started in the top job. But he is only an employee, answerable to the Committee. It is the Committee who are supposed to be in charge, in this or any other members club. So who is to blame ?

Jimmy Chen - gone to the dark side ?
In City Tatts one of the best guides to whether a Committee member is doing anything is to watch the reaction from the rest of the Committee. Anyone upsetting the Committee is probably acting in the interests of members. And this certainly did apply to Jimmy Chen. He was very unpopular with the established Committee from the time he was first elected. We don't know what exactly he did to upset the others but presumably he was asking questions about things that they felt should be left alone.

But he really had them hopping mad when he decided to run for Treasurer in 2009 - against the Committee's nominee, Paul Cavallaro. (Both Chen and Cavallaro are accountants.) To say that the Committee were unhappy about this does not begin to describe their reaction. They were fuming. (This will tell you what the Committee thinks about democratic elections in the Club.) This anger, at his decision to run, reached it's high point (or low point) when another Committee member called him a "chinese c**t" !

Jimmy Chen as Treasurer
Jimmy Chen managed to get elected by a narrow margin. And this gave his supporters some hope that at last someone would probe the mysterious finances of City Tatts. But they were in for a letdown. Jimmy's first Treasurer's Report turned out to be a replica of the useless propaganda that used to flow from Keith Free. All the same empty jargon was there to conceal the facr that the Club was incredibly badly run. In fact Jimmy may not have written the report. Certainly at the AGM he gave every impression that he was seeing it for the first time.

So what has gone wrong ?  Basically there are two possibilities -

1. Jimmy's gone to the dark side - ie. decided to go along with the Committee and stop asking the tough questions. Why would he do that ? Hard to say - but he may have a long term goal to be Chairman and thinks this is the best way of achieving it. If that's what he is thinking he will be very disappointed - the Committee will never support him.
2. He has done nothing as Treasurer because he has been denied the information that would allow him to do anything. This is a real possibility. In reality Mark Cooper (Keith Free's nephew) controls the financial information and may supply Jimmy with the minimum possible. It could be that Jimmy really doesn't know much about the finances of the Club.

But whatever the reason it is clear that Jimmy Chen has been a total failure at discovering the real story of what happens to all the money at City Tatts.


Save City Tatts Committee

The decline of City Tatts - Who is to blame? (Chapter 3)

There is no question that City Tattersalls Club has gone downhill dramattically since Tony Guilfoyle started in the top job. But he is only an employee, answerable to the Committee. It is the Committee who are supposed to be in charge, in this or any other members club. So who is to blame ?

Patrick Campion - a study in weakness
When John Kennedy decided not to run again, because of the rising anger over his role in the Bookmakers Superannuation Fund, he was replaced by Patrick Campion. Campion, a solicitor, had been the Vice Chairman under Kennedy and had been on the Committee since 2005. Campion's key personality trait is that he is weak. He never really takes a stand on anything - he just goes along with whatever others have decided. There is no record of him ever standing up for members.

Campion;s track record - before becoming Chairman
Since Campion's time on the Committee coincides exactly with the the decline of City Tattersalls Club we need to have a closer look at his track record:

• First and foremost, since he joined the Committee, Campion has gone along with everything that Tony Guilfoyle has done to the Club. And that means everything. Every reduction in member amenities, every bit of waste (fees to consultants, overseas trips, legal fees etc), every failed project (Zest, the Coffee Cart, 194 Pitt Street etc) - you name it, Campion supported Guilfoyle om it. Not once did he question anything. And it also means that he voted for every pay increase and bonus that Guilfoyle has ever received.
• Campion blindly followed John Healy and John Kennedy on everything they did to restrict or remove the rights of members trying to save the Club.
• Campion was on the Committee when a donation of $80,000 was paid to a clinic in Moree run by his brother, Michael Campion (but never disclosed to members).
• Campion was Vice Chairman when he, along with most of the Committee, discovered that an employee had taken over $200,000 without their knowledge. Naturally Pat decided to do nothing about it.
• Campion's role in the Supreme Court case deserves special mention (see below).

Patrick Campion and the Supreme Court case
Campion's role in the Supreme Court action is very interesting for two reasons - he is a solicitor, and he specialises in defamation, which would be central to the case.
The basic facts of the Supreme Court case are fairly simple. A website devoted to City Tatts posted two articles - one explaining John Kennedy's role in the Bookmakers Superannuation Fund and another detailing a potential conflict of interest involvimg Tony Guilfoyle. A member was expelled by the Committee on the grounds that he was responsible for the website and he took action to have his membership reinstated. It is clear that there was no benefit to members from the Club's action. It was done purely to protect Kennedy and Guilfoyle. From a variety of sources we have been able to piece together Campion's role in the case:

• Kennedy and Guilfoyle were watching the website, and getting legal advice on it from Bartier Perry, from January 2010 but did not tell the Committee until April 2010.
• This is the explanation for the so-called Committee Executive mentioned in the Club magazine. There is no Committee Executive - that was just a way for Kennedy to justify the delay in informing the Committee. In fact, the Club rules have provisions for setting up a Sub-Committee. But they didn't suit Kennedy because they would mean that the Committee would set the terms of reference of the Sub-Committee and also require that minutes be kept of any meeting - which defeated the purpose of what Kennedy wanted to do.
• Campion's initial reaction was that the website was fairly harmless and that there was no need for the Club to do anything.
• When the rest of the Committee decided to expel the member Campion agreed with them !
• The Club (ie. Kennedy and Guilfoyle) claimed that the website was defamatory. Every court in the country would have rejected that idea since the website basically pointed out what had been obvious for years - that the Club was going downhill under present management. And truth is an absolute defence to defamation. If Campion knew anything about defamation he must have known that the defamation case was nonsense.
• After the member served notice of his intention to take action in the Supreme Court, Campion altered the minutes of the earlier meeting to make it appear that he had given the member a fair hearing before voting to expel him. (Bet you never thought anyone would find out about that  - eh Pat ?)
• The Club's legal tactic was essentially to bully the host of the website. They basically said to him - "just sign an affidavit to say that the expelled member was responsible for the website and we will drop any action against you". Did Pat have any problem with this blatant blackmail? - Not at all, he specifically mentioned in his own affidavit how he was confident in expelling the member because of the credibility of the web host's affidavit !
• But Campion's key move was during the week leading up to the hearing in the Supreme Court in September 2011. The case essentially rested on whether the Club had given the member a fair hearing or had just decided to get rid of him without any real cause (the legal term is "pre-judgement"). The problem for the Club was that the summons served on the member before they expelled him pointed strongly to the latter - that they had pre-judged the member. Campion's legal tactic was to get the entire Committee, including himself, to swear an affidavit that they were not aware of the contents of the troublesome summons !
• Let's just stop and consider what Campion is asking the court to believe here:

1. In a case which will be decided on the issue of pre-judgement, Campion simply swears an affidavit to the effect that he has not pre-judged - how simple is that !
2. Campion, a solicitor specialising in defamation, never bothered to read the summons - in a case where the Club's stated reason for taking action was the website's alleged defamation !
3. Campion was happy to spend over $100,000 of members' money to expel one member with no knowledge of the contents of the summons.

Save City Tatts Committee

The Bookmakers Superannuation Fund

The Bookmakers Superannuation Fund (BSF) pays .615% of its assets each year to Super Promoters Pty Ltd to be its "promotor". This has generated millions for the shareholders of Super Promoters since 2004 and enabled them to sell the company for $7 million to Diversa Limited, a company listed on the Australian Stock Exchange. From its formation in 2004, until its sale in 2009, Super Promoters had four Directors (who were also the shareholders) - three of whom were members of the fund's policy Committee and one was the fund's Administrator.

Documents lodged with the ASX revealed for the first time the full extent of this arrangement and it is hard to believe that a scheme like this could be acceptable to supervisory authorities.

The following are just some of the issues that arise from this arrangement:
A Super Promoters received almost $2m from the BSF in 2008 but it's operating expenses were less than $500,000 resulting in a profit of $1.5m to be distributed to the four principals. (In fact, Super Promoters only spent $24,000 on advertising and promotion in 2008.) The obvious question is - Why didn't the Trustee of the BSF insist on paying these expenses directly and save at least $1.5m of members funds ?

B Apart from the cost of this arrangement, there is no benefit whatsoever to the members of the BSF from this "promotion". Part of the arrangement is that the total fee to Super Promoters is fixed at 1.108% of fund assets. This means that increases in total assets could not lead to reduced expenses for existing members - but did result in extra fees to Super Promoters. It also means that the statement in the accounts that it is important that the fund "grow and thereby provide economies of scale" is simply false. Where was the benefit to members ? In reality the average member paid $800 each year to Super Promoters in an arrangement where the only party that could possibly benefit was Super Promoters !

C The announcements by Diversa released to the Australian Stock Exchange were very revealing. They openly state that "the opportunity exists to generate attractive returns from the Super Promoter's business by growing the Funds Under Management". And this is due to the "relatively low cost base which results in an increasing margin and increasing profitability". But this artificial "business" only exists because the fund paid $2 million for expenses that in reality cost less than one quarter of that. The "increasing profitability" is coming directly from member's retirement savings.

D How many superannuation funds pay "promoter" fees ? Is there another superannuation fund in Australia that pays fees to a "promoter" in a scheme like this ? The most likely answer is that in other funds someone in a position to protect members interests, whether a Trustee or a Member Representative, would have rejected a scheme like this at first sight.

E In the Annual Report members are told to direct any enquiries to the Administrator. But the Administrator has been part of the "promotion" from the start (and was able to get $1m from Diversa for his business). Likewise the normal procedure for a concerned member is to contact the Member Representative on the Policy Committee. But in the BSF the Member Representatives were often the same shareholders who received substantial amounts from the arrangement. It seems that in the BSF the very people who would normally protect members interests were part of the arrangement to extract fees from the fund.

F Many members of the BSF joined the fund on the recommendation and high praise from the Committee and senior management of City Tattersalls Club. Almost all of the leading players have been or still are connected with the Club -

• Of the four individual Trustees before it converted to a Public Offer Fund in 2004, three were Committee members or senior employees of City Tattersalls Club.
• The former Treasurer of City Tattersalls Club, Keith Free, managed the BSF for many years.
• The Policy Committee of the BSF, even in 2010, was still composed entirely of Committee members or senior employees of City Tattersalls Club.
• The BSF operated from an office in City Tattersalls Club for many years.
• The City Tattersalls Club Staff Super Fund merged with the Bookmakers Superannuation Fund in September 2004. (It would be very interesting to know how this came about.).

G When Super Promoters was set up in 2004, the four Directors and Shareholders were the same four people who had complete control of the Bookmakers Superannuation Fund -

• The Trustees of the fund, before it became a Public Offer Fund were John Kennedy, Peter Mueller, Peter Hayes-Williams and Ian Buxton. (It would seem to be a blatant breach of fiduciary duty for any Trustee to set up a scheme for their own benefit by exploiting the very assets they are holding in trust for others. And it must be a serious matter when it is done in a Superannuation Fund which has far more stringent regulations to safeguard member' funds.).
• The Manager of the Fund was Peter Mueller & Associates (who employed Peter Hayes-Williams)
• The Member Representatives were John Kennedy and Ian Buxton.
• The Employer Representatives were Peter Mueller and Peter Hayes-Williams.

Incidentally, these Member Representatives seemed to get appointed and replaced without any input from members.

Given the circumstances outlined above it is easy to understand that APRA or ASIC would want to have a close look at this "promotion" scheme. It is hard to believe that a scheme like this could be legal. 


Save City Tatts Committee

The decline of City Tattersalls Club - Who is to blame? (Chapter 2)

There is no question that City Tattersalls Club has gone downhill dramatically since Tony Guilfoyle started in the top job. But he is only an employee, answerable to the Committee. It is the Committee who are supposed to be in charge, in this or any other members club. So who is to blame ?

John Kennedy - Started with a bang, ended with a whimper
When John Kennedy started as Chairman in 2008 he told everyone in the gym that he wasn't going to take any nonsense from those "troublemakers" that caused Healy to quit. By 2010 he was afraid to show his face in the Club. In between, his performance was a mixture of comedy, failure and tragedy.

City Tattersalls Club with John Kennedy as Chairman
If you were even a casual observer of City Tatts you would know that Kennedy was a complete failure as Chairman. Everything that was going badly under Healy got even worse under Kennedy. Restaurants, bars and just about everything else in the Club continued to go downhill. But Kennedy deserves special mention for his particular contribution to the decline of City Tatts in the following areas:

• The purchase of 194 Pitt Street. This has been explained in detail elsewhere so there is no need to elaborate here. Suffice to say that Kennedy watched and did nothing as this disaster unfolded
• Misleading members became standard practice with Kennedy. For instance, he would lament the cost of a General Meeting ("in the order of $37,000") called by concerned members but say nothing about going on an overseas trip that cost the Club $125,000 for 5 people !
• Kennedy set a new low for neglecting the interests of members. He was Chairman when the Committee discovered that a senior employee had taken $200,000 years before. Kennedy apparently saw nothing wrong with this - maybe he secretly admired someone who exploited their position (given his track record in the Bookies Super Fund - see below)

It is worth noting that Patrick Campion was Vice-Chairman during Kennedy's time as Chairman and never once questioned anything that Kennedy did.

John Kennedy and the Bookmakers Superannuation Fund
It is impossible to understand John Kennedy's time as Chairman of City Tatts until you know about the Bookmakers Superannuation Fund. The story of the Bookmakers Superannuation Fund is so bizarre that anyone who had not followed it closely for years would find it hard to believe (see separate post).
Many members of the Club had their money in the Bookmakers Superannuation Fund and a few of them knew about Kennedy's skim operation in the fund. But when the Australian Financial Review devoted a full page article to it everyone knew. This was especially bad news for Kennedy who would meet these members in the City Tatts gym, where he was a regular attendee for 20 years. As the fund members got more agitated Kennedy simply stopped going to the gym. In fact, he avoided going to the Club if at all possible - only going in for Committee meetings. It was absolutely comical to watch the Chairman rush from the Club at 3.45 just before his old buddies would show up for gym classes. After about six months of this he realised that he would find it difficult to be re-elected as Chairman so decided not to run.


Save City Tatts Committee

The decline of City Tattersalls Club - Who is to blame? (Chapter 1)

There is no question that City Tattersalls Club has gone downhill dramatically since Tony Guilfoyle started in the top job. But he is only an employee, answerable to the Committee. It is the Committee who are supposed to be in charge, in this or any other members club. So who is to blame ?

The rot started with John Healy - the Chairman in 2006
If you want to understand why City Tatts is the way it is today, you have to go back to 2006. In 2006 it was already obvious that Tony Guilfoyle was a disaster for the Club. In an attempt to get the Committee to take action before it was too late, members called a Special General Meeting to pass the following four motions:

1. That the International Buffet be reopened
2. That major building works be approved by members
3. That remuneration of the highest paid employees be reduced in line with industry averages
4. That the Committee stop the reduction in facilities and amenities in the Club

Not only were these problems obvious at the time but everything that has happened since then proves just how right members were in seeking action.

John Healy's reaction to the four motions
If Healy had any brains he would have prosposed these ideas himself long before the members did. And if he had an ounce of integrity he would have supported the members after they proposed them. Instead he embarked on an insane, spiteful crusade to crush the proposals:

• First, he got legal advice to deny members the right to vote on the motions at the meeting !
• Next, as Chairman of the meeting, his spiteful performance set a new low in dealing with members of City Tattersalls Club
• Following the meeting, he then took the astonishing step of removing the right of members to put forward a motion at any meeting (and got this approved with the aid of postal voters)
• And finally, he did absolutely nothing about the problems that caused the motions !

It is worth noting that Patrick Campion was on the Committee at the time and fully supported everything that Healy did.

John Healy has a lot to answer for
Apart from the damage he did while he was there, he set new low standards for running City Tattersalls Club that are still there today. He was the first Chairman to spend insane amounts of members' money on legal advice to use against members - something that continues to this day. In fact, since that 2006 meeting the Club has spent over $500,000 on legal fees, mainly to silence members. He was also the first to put more effort into attacking members who noticed problems in the Club than he did in fixing those problems - again something that still happens today. The one good outcome of the 2006 meeting was that within a year he decide not to run again for Chairman.

But make no mistake - in the decline of City Tattersalls Club the rot started with John Healy.


Save City Tatts Committee

The Current State of City Tattersalls Club (Part 2)

Here are some more observations on the current state of City Tattersalls Club compared to what it was in 2004, when Tony Guilfoyle started as Secretary/Manager.

Removal of Members' Rights
The decline of City Tattersalls Club is clearly evident in the systematic removal of member's rights. An obvious example is the incredible decision move by Guilfoyle and the Committee in 2007 to remove the right of members to propose and pass a motion at a General Meeting. Another was the change to make it more difficult for members to call a General Meeting. These, and other measures, were done for one purpose only - to silence the concerned members who by then knew how badly the Club was being run.

Propaganda instead of information for members
Since 2004, City Tattersalls Club members have been subjected to propaganda, hype and management jargon like never before. It truly has been a sight to behold. Every failure, no matter how bad, is explained away by excuses, hype, corporate jargon and all-out propaganda. Restaurants that have cost millions to fit-out are always "well received by members" - even if they are empty. Continual declines in membership are "in line with our Strategic Plan". Any drop in revenue or profit is not a problem because it is "ahead of the budget". Even the Club's city centre location, probably it's most precious asset, is not spared the propaganda onslaught - Guilfoyle has repeatedly tried to push the idea that the location is a disadvantage, in order to excuse his failures.

This kind of propaganda has no place in a club like City Tatts which is owned by members and whose only function is to provide amenities to members.

The "Strategic Plan"
The most hilarious aspect of the new "management jargon" approach is the "Strategic Plan". It deserves a special mention because so many recent failures are linked to it. The first thing you need to know about the Strategic Plan is that members are not allowed to see it !. You may find that hard to believe in a members club like City Tatts but it's true. This is why Guilfoyle (and the Committee) love the idea of a Strategic Plan - because they can use it to explain any failure and no one can contradict them because no one else knows what's in it !. So, for instance, continual declines in membership are "in line with our Strategic Plan" ! (Yes, they actually said that). But the real issue with the Strategic Plan comes from observing the track record of the past 8 years. When you consider the long list of projects that flopped, were cancelled or were simply abandoned (like the Coffee Cart) you have to wonder if there is any Strategic Plan !

Building Works at City Tattersalls Club
The mismanagement of building works is one of the greatest areas of waste during Guilfoyle's time in the Club. It seems that when it comes to building works, he is always happy to spend the Club's money. (You can contrast that with the incredible penny-pinching in other areas of the Club.) But the members are rarely happy with the results. How many times has the Club spent millions on a renovation or refurbishment only to rip it all out a few years later ? For instance, how many botched attempts have there been to get a proper entrance on Pitt Street ? Actually the latest attempt is probably the worst of the lot. And it was supposedly managed by the Club's own building supervisor, Mark Lonngren. Well, anyone who watched it in progress last year said it was like an episode of the Three Stooges. First, they tried the cheapest possible floor covering, concrete - painted black "to look like marble". (This, in what was being called a "Grand Entrance" and costing over $1 million !) Then, after about 10 people had fallen over in the first week due to the shiny floor, they decided to carpet it. But then the carpet made the rise in the middle of the lobby harder to see, so older members still stumbled on it. Next, it was clear that they had never considered where the doorman's podium was going to be. So that became another comedy episode as they tried one position after another - and noticed, apparently for the first time, that there are pillars in the entrance lobby.

Still, while City Tattersalls Club may suffer from waste on building works, it has been a highly beneficial relationship for the lucky builder who seems to get most of the Club's business.


Save City Tatts Committee

The Current State of City Tattersalls Club

The Current State of City Tattersalls Club
It is interesting to compare the current state of City Tattersalls Club to how it was in 2004, when Tony Guilfoyle started as Secretary/Manager.

Membership has dropped from 29000 to 17000
If you had only one indicator to tell you how City Tatts has gone in recent years just look to the number of members. Membership has fallen steadily from 29000 in 2004 to 17000 today. This one statistic tells you everythimg you need to know. And it has happened at a time when the population living in the vicinity of the Club has increased. Other clubs, like the Bowlers Clun, have increased membership during the same period.

Loss of Member Amenities
It is no surprise that membership is falling. Every you look in the Club, the very things that brought members to the Club are being taken away, run badly or allowed to decline. City Tatts was known for having entertainment 3 or 4 nights a week - now there is none. It was known for having a variety of restaurants that members wanted - now it has overpriced restaurants that are usually empty. It used to have bars with style like the Cocktail Lounge or the Members Bar - instead management spent a fortune on the Omega Lounge which was a flop from day one.

City Tatts now owes $18 million to National Australia Bank
City Tatts owes $18 million to National Australia Bank. This is now a major constraint on everything the Club does - because the bank will not lend any more money. Even a relatively small project like the front entrance alteration was delayed because the Club didn't have the money, and couldn't borrow more. And, of course, work on 194 Pitt Street has come to a halt for the same reasons. But the biggest question of all is how can a club that makes a profit of $20 million on poker machines every year be in the position of owing $18 million to the bank.

Waste and Mismanagement are taking City Tattersalls Club down
Part of the explanation for the dire financial straits of the Club is the amount of money being squandered every year. While the Club is suffering, and members are ignored, some are doing very well out of City Tatts. This is just a small sample:

• A few favoured employees are paid staggering salaries, regardless of performance. The Secretary/Manager is paid almost $600,000. And his secretary, Jan Elks, is paid $125,000.
• Fees and payments to various consultamts amounted to $796,000 in 2010. The Club's solicitor alone received $185,000 !
• The Club has spent $500,000 each year on radio advertising. Everyone who has looked at this knows it is a total waste as far as the Club is concerned. But it is a nice bonus for the radio station - and the agent who receives the commission.
• Overseas Travel cost $56,000 in 2010 - for 4 people to go to Singapore, Hong Kong and Macau !

Just cutting back on these, and other obvious examples of waste, would add $1 million each year to the funds available for member amenities. That in itself would put the Club on the road to recovery.


Save City Tatts Committee