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

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

Hazardous 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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Trouble at Balmain Leagues Club - could the same happen at City Tattersalls Club?

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 Tatterssals 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.

City Tattersalls Club - Jimmy Chen's Treasurer's Report for 2011

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