RailCorp executive Joe Camilleri’s loans: ‘no business ramifications’, ICAC told

Former Railcorp employee Joseph Camilleri leaves the ICAC inquiry on Wednesday. Photo: Ben RushtonThe executive of infrastructure company UGL, who helped win a $1.4 billion train maintenance contract with RailCorp, said there were no business ramifications behind more than $400,000 in loans he later made to RailCorp’s head of train maintenance.

Kevin McCarthy, UGL’s general manager of rail projects and tenders, was appearing before a corruption inquiry investigating the millions of dollars in loans obtained by a sacked RailCorp executive, Joseph Camilleri.

Mr Camilleri allegedly obtained the loans from RailCorp employees and contractors to help his daughter, who had a gambling problem. But Mr Camilleri told those he was borrowing from that his daughter had been the victim of identity theft, and would soon receive a multimillion-dollar payout.

Mr McCarthy’s $428,000 in loans to Mr Camilleri are the largest yet exposed by the Independent Commission Against Corruption, which is investigating whether Mr Camilleri and those who lent money to him could have been committing a criminal offence.

The two men had known known each other for more about 30 years and been friends for at least 20, Mr McCarthy told the inquiry in Sydney on Wednesday.

At the end of 2010, the two rail executives and friends met to discuss the contract that UGL had held for 17 years to do maintenance on Sydney’s trains. After the meeting, Mr McCarthy told his company that Mr Camilleri was “no longer a strong supporter of UGL” and there was a perception UGL “owed” RailCorp.

The contract was put to tender, which UGL won in December 2011 for $1.4 billion over seven years.

In October 2012, Mr Camilleri, who was paid more than $300,000 annually, approached Mr McCarthy for a $20,000 loan, as he had approached more than 50 other RailCorp employees.

Mr McCarthy lent him the money, and went on to lend him another $408,000.

Counsel assisting the commission, Nicholas Polin, asked Mr McCarthy how Mr Camilleri could impartially oversee the maintenance contract in the context of the loan.

“How on earth was he going to rigorously enforce his particular task … when he owed the bid director for UGL half a million dollars?” Mr Polin asked.

But Mr McCarthy said Mr Camilleri had a history of impartiality. “I have witnessed Joe using his impartiality in every other decision that I had made,” he said.

Mr McCarthy said he made the loans because his friend was stressed and his family appeared to be in trouble.

“I think there is a clear distinction between the personal loan and business,” he said. “I believe there were no ramifications in a business sense.”

Mr Camilleri was ultimately dismissed by RailCorp in February 2013, when the train operator discovered he had also been taking loans from contractors. Among the RailCorp employees to lend him money was the chief executive, Rob Mason.

Mr McCarthy’s evidence in front of commissioner Megan Latham will continue on Thursday.

Correction: The original version of this story said Mr McCarthy, rather than Mr Camilleri, was dismissed by RailCorp.