Thread by @maximumwelfare

https://twitter.com/maximumwelfare/status/1586945887376658438

Made significant progress towards my fundraising goals last week.

If that continues this week, I am going to see if I can't make it work to go to Brisbane and report on Hearing Block 4 in person.

#RobodebtRC

As @SquigglyRick pointed out in his newsletter, he and the ABC correspondent are generally the only media in attendance.

The gallery is largely empty. Plenty of seats for me. What do you think?

#RobodebtRC

gofundme.com/f/robodebt-roy…

The Royal Commission is in session. Link to the stream is below.

Counsel Assisting Angus Scott KC is questioning Annette Musolino, the former Chief Counsel at DHS. She is now Chief Operating Officer at Services Australia (DHS).

#RobodebtRC

robodebt.royalcommission.gov.au

Ms. Musolino's evidence is the only evidence scheduled for today. She is also scheduled to appear tomorrow morning as well, according to the witness list.

robodebt.royalcommission.gov.au/publications/w…

#RobodebtRC

Ms. Musolino was admitted as a solicitor in 1993, working in commercial litigation and debt recovery, as well as employment and criminal law.

SCOTT: You're familiar with the legal requirements of debt proceedings?

MUSOLINO: Yes.

#RobodebtRC

SCOTT: You haven't held a legal role since you were Chief Counsel in DHS between 2016-19?

MUSOLINO: That's right.

S: Legal roles and business roles.

#RobodebtRC

SCOTT: Freedom of Information and Litigation branch reports to you as Chief Counsel?

MUSOLINO: Yes.

S: In October 2016 one of the branches was the Ombudsman Information Release(?) branch? Headed by non-legal SES, Michael Robinson?

M: Correct.

#RobodebtRC

SCOTT: In your statement you described how matters were 'escalated' to you?

MUSOLINO: From time to time issues that required attention of the Chief Counsel and/or executive, means brought to my attention.

S: AAT matters? If one found DHS contrary to law?

M: Yes.

#RobodebtRC

SCOTT: A decision at Tier 1 saying that averaging was unlawful, would you expect that to be escalated?

MUSOLINO: If it was unlawful, yes. If it more simply wasn't available, then no.

#RobodebtRC

SCOTT: Primary responsibility for responding to AAT decisions are with the DSS Secretary, but were delegated in practice to DHS?

MUSOLINO: Yes, as the service provider.

S: Including providing a legal team?

M: In AAT2, yes. In AAT1, Secretary doesn't appear.

#RobodebtRC

SCOTT: One matter that fell within your division was providing prospects of appeal between AAT1 and AAT2, yes?

MUSOLINO: There was a team to review unfavourable outcomes to determine whether an appeal was appropriate to DSS standards.

#RobodebtRC

MUSOLINO: If an appeal was recommended by our AFAR process, it would then go to DSS for approval.

SCOTT: Your role included oversight of that team's compliance with 'model litigant' provisions?

M: My role was to make sure systems ensured model litigant compliance.

#RoboebtRC

MUSOLINO: I'd describe my role as a manager of the team regarding systems and resources, rather than day-to-day supervision.

SCOTT: If you became aware of a breach of 'model litigant' provisions, you would act?

M: We had a process in place to deal with allegations.

#RobodebtRC

SCOTT: You're responsible for ensuring that process is followed?

MUSOLINO: To have the system in place. If I was aware it wasn't being followed I would have taken disciplinary or other action. Would be considered for referral within APS Code of Conduct.

#RobodebtRC

SCOTT: Prior to becoming Chief Counsel permanently, you acted in that role between 2014 and 2015?

MUSOLINO: Yes.

[Brief pause while Scott quizzes her on what's in all the folders and bundles in front of her. She has a chronology, they wonder if it's an exhibit.]

#RobodebtRC

[It's just a timeline of what's in her statement, so we move on.]

We're now looking at her job application for Chief Counsel in 2014, which makes reference to an 'ambitious service delivery agenda' for 2015, in a 'challenging budget environment'.

#RobodebtRC

SCOTT: Did you know at the time if this related to the Robodebt scheme?

MUSOLINO: No. The Department only became a Department in 2011, and from then on a transformation constantly occurring. No particular program, legacy systems and transformation required.

#RobodebtRC

MUSOLINO: Thinking about recipients holistically rather than as a transaction. We had a lot of work to be getting on with. Lots of 'service delivery reform' projects when I joined, a reference to that.

HOLMES: Well Robodebt thought about them as a transaction...

#RobodebtRC

MUSOLINO: The Department was still forming and the business areas were quite silo'd. No mature understanding of risk. No appreciation or planning for the downwind impacts. Didn't join up end-to-end for customer.

HOLMES: I'd like to hear more about this later.

#RobodebtRC

SCOTT: 'An imperative to meet an ambitious service agenda', you're saying you will assist in assuring that Legal Services help meet that agenda?

MUSOLINO: Yes.

#RobodebtRC

SCOTT: 'Complex legal and political environment gives rise to significant challenges and opportunities', 'identify the desired outcome and roadmap to achieve it'?

MUSOLINO: Within the law.

#RobodebtRC

MUSOLINO: A good legal team will be on top of things. At DHS when I joined things tended to be sent for legals at the last minute, as a rubber-stamp.

#RobodebtRC

SCOTT: Reference to your admission to High Court of Australia, ACT/NSW Supreme Courts, particular expertise in administrative law. You understand the consequences for misrepresenting legal qualifications and experience? This is a true statement?

MUSOLINO: Yes.

#RobodebtRC

SCOTT: A 'deep understanding of FOI law'? The next sentence you identify 'a thorough understanding of administrative law principles'? I suggest you're representing an understanding of admin law beyond FOI law.

MUSOLINO: Studied it, worked at ASIC.

#RobodebtRC

SCOTT: Role of Chief Counsel is broader than FOI law...

MUSOLINO: That statement isn't confined to FOI, but it is a key component of the legal division at DHS.

S: Principles of administrative decision making? Represents you have a good understanding.

M: Yes.

#RobodebtRC

SCOTT: Would you agree with me any limitations in your knowledge of administrative law would lead you to defer to people with greater knowledge of that law?

MUSOLINO: I was not a subject matter expert. I had a broad background in commercial and corporate law.

#RobodebtRC

MUSOLINO: The role of Chief Counsel was to rely on the experienced lawyers in that practice area. I would have deferred to them. Not many areas in which I'd be reading or writing myself.

#RobodebtRC

SCOTT: Given your level of expertise, wouldn't those limitations provide a sound reason to get external legal advice on a significant and complex issue?

MUSOLINO: It would depend on the issue.

#RobodebtRC

SCOTT: As a general proposition it's prudent to seek independent advice on such matters?

MUSOLINO: It depends on the issue. If that was recommended, we would.

S: Significant expertise would be available from AGS, external firms, private barristers?

M: Yes.

#RobodebtRC

SCOTT: You'd agree that the Robodebt scheme was calculated by averaging annual ATO PAYG data?

MUSOLINO: That was my understanding. It was a fundamental element of the scheme that averaging the data led to a valid debt decision.

#RobodebtRC

SCOTT: Debts were raised on the assumption that equal amounts were earned per fortnight?

MUSOLINO: That would be the assumption.

S: Invariably the case where unsuccessful attempts were made to contact recipient?

M: Thresholds it had to pass first...

[Huh?]

#RobodebtRC

SCOTT: In those circumstances the process didn't provide for the compliance officer to attempt to contact employers?

MUSOLINO: The design of the program referred to it as an 'abridged' process. It was part of the process to look at customer record.

[ABRIDGED!]

#RobodebtRC

MUSOLINO: Previously, employers would be contacted. That step was removed, unless the person engaged and said they couldn't contact employer. Then the compliance officer would issue compelling notices.

HOLMES: No-one looked at the customer record at first...

#RobodebtRC

MUSOLINO: I only joined in 2017, that was just what was in the Operational Blueprint.

#RobodebtRC

Scott brings up part of the Operational Blueprint on 'Acceptable documents for verifying income when investigating debts'. The section on 'where fortnightly details cannot be verified'.

#RobodebtRC

SCOTT: 'If every possible means of obtaining actual income information has been attempted', that's what you understood about prior process?

MUSOLINO: You'd issue coercive notices and obtain that information up front, or make an attempt. Robodebt removed that step.

#RobodebtRC

SCOTT: Based on the dates the document says it's valid from, 2016-17, do you accept the Operational Blueprint instructed officers to exhaust every possible means of verifying actual income?

MUSOLINO: [rambling] It seems this part may be about prosecutions?

#RobodebtRC

SCOTT: Let's go back to the part I actually asked you about, though. It's possible that this part just wasn't updated to reflect the new process, yes?

MUSOLINO: The line is correct in understanding the context of the program as it was rolled out.

[Uhhhh nope.]

#RobodebtRC

SCOTT [raising voice]: Shouldn't the words 'every possible means', actually mean what they say?

MUSOLINO: I didn't draft it. Everyone would have understood how it was working...I think.

[Good grief.]

#RobodebtRC

SCOTT: Do you agree that another way of saying 'every possible means' would be to say that averaging can only be used as a 'last resort'?

MUSOLINO: No. I think they mean different things. They're not technical definitions. They have to be understood in context.

#RobodebtRC

HOLMES: An unusual approach, it seems, that words could mean different things based on the context?

MUSOLINO: The only point I'm making is how the officer reads this is based on what they thought they'd been told to do.

HOLMES: Proves my point, thank you.

#RobodebtRC

SCOTT: It's something of a statement of long-established administrative law, isn't it? It's long been the case that an administrative decision must be supported by evidence or information?

MUSOLINO: Yes, that's uncontroversial.

#RobodebtRC

SCOTT: The evidence must be logically-capable of supporting the claim that a debt exists, isn't it?

MUSOLINO: Yes, I'd agree with that.

#RobodebtRC

[Scott brings up the Solicitor-General's advice on lawfulness of averaged debts from 2019. Musolino is familiar with it.]

SCOTT: 'Officers making debt decisions must accord with the usual parameters of administrative fact-finding...otherwise likely to be quashed.'

#RobodebtRC

SCOTT: You were familiar with the legal principles here?

MUSOLINO: The legal side wasn't surprising, what was surprising that it applied to the Robodebt scheme.

[Amazing admission. They weren't expecting the law to ever arrive.]

#RobodebtRC

SCOTT: One of the decisions referenced is a High Court decision, it's clear that this is a principle of law adopted by the High Court in 2010.

MUSOLINO: Yes. No disagreement on the point of law.

#RobodebtRC

SCOTT: You agree the AGS comments on the use of PAYG data to calculate a debt? And the conclusion that the use in that capacity is 'pure conjecture'? The opposite of probative data.

MUSOLINO: We proceeded on the basis it was valid based on what DSS told us.

#RobodebtRC

SCOTT: What did you think, though? It's obvious.

MUSOLINO: I was satisfied by the assurances I was given.

S: The AGS has applied common-sense reasoning.

M: That wasn't our view.

S: It's common-sense reasoning that anyone could apply.

M: I don't agree.

[Idiot.]

#RobodebtRC

MUSOLINO: I don't think we would have disagreed with that, it was a known issue that if people didn't engage the averaging would be applied, it could readily be displaced by better data, that was how it was designed to work.

SCOTT: It's conjecture, isn't it?

#RobodebtRC

I don't know why Ms. Musolino is trying to argue how administrative law and basic logic works with Mr. Scott. She is not succeeding.

She is clearly another senior person who holds anti-social views and is deluded as to the level of responsibility she had.

#RobodebtRC

MUSOLINO: Our 'characterisation' was that the information was probative enough to make a decision.

SCOTT: How can a person reason that someone has earned the income in the ATO data in equal amounts per fortnight, without any evidence of it?

#RobodebtRC

MUSOLINO: I relied on people to make my decisions, DSS made it crystal-clear that they were of the view it was a lawful process.

[That was directly, a lie.]

MUSOLINO: The Ombudsman cleared us. I took advice from my legal team and I was comfortable.

#RobodebtRC

HOLMES: Who from DSS made it 'crystal-clear'?

MUSOLINO: In my statement, during compilation of material to Ombudsman, 2014 and 2017 advices.

H: Did you look at the 2014 advice?

M: I did but it was clear that DSS were retreating from it.

#RobodebtRC

HOLMES: You're a lawyer, didn't you look at the 2014 advice and think it was right?

MUSOLINO: It didn't relate to whether attempts to contact were exhausted.

H: And how did that exclude it?

M: It seemed we could do it as long as 'procedural fairness' respected.

#RobodebtRC

HOLMES: How does that fix your lack of evidence?

MUSOLINO: I agree with you that it doesn't.

H: The 2014 advice makes reference to actual fortnightly income.

M: But it's how you ASCERTAINED that.

H: Yes...

M: My key takeaway was that DSS were satisfied.

#RobodebtRC

HOLMES: Did you see anything in the 2017 advice that actually supported the use of averaging? Any case law or legislative reference that would satisfy you?

MUSOLINO: I was comfortable that whatever they were representing, they had a reason for.

#RobodebtRC

HOLMES: As a lawyer, you turned no critical eye to this?

MUSOLINO: We're a service delivery agency. It's not our job to look behind the budget measure. We had to implement and deliver. Nothing in my reading of that material alarmed me, DSS made their position clear.

#RobodebtRC

HOLMES: What about the massive media attention?

MUSOLINO: No-one was in any doubt that there were implementation issues. I agree that the media told us there were problems. In 2017 the focus was to try and fix the online system, that was where the attention was.

#RobodebtRC

SCOTT: As a general question, you understand that it's not consistent with your role as a Government lawyer to simply accept the assurances of others?

MUSOLINO: I don't accept that. I was entitled to accept representations from DSS' lawyers.

#RobodebtRC

SCOTT: Do you understand DSS' Russel De Burgh isn't a lawyer?

MUSOLINO: Yes, but I understood his email as a factual representation of what had occurred.

#RobodebtRC

[Briefing to Stuart Robert on the Solicitor-General's 2019 opinion]

SCOTT: It provides that a decision-maker cannot rely on apportioned PAYG data for debt raising. It also says 'considerable legal and reputational risk to administer the program in current form'.

#RobodebtRC

SCOTT: Says the current form also carries personal risk to then-Secretary Renee Leon relating to her obligations?

MUSOLINO: Yes.

S: May amount to 'misfeasance in public office', relating to recovering debts in bad faith?

M: Yes.

[LET THERE BE TORTS]

#RobodebtRC

Breaking my rule on exhibit screenshots because this one will be very important.

#RobodebtRC

SCOTT: Had external advice to this effect been received between 2016-18, this would amount to misfeasance?

MUSOLINO: It would depend on when we got that advice, but I'd agree with that. If the advice had been accepted.

S: Same exposure for the Secretary?

M: Yes.

#RobodebtRC

SCOTT: You had knowledge of the implications of external advice to this effect during 2016-18?

MUSOLINO: I would have understood those at the time, had we been in that position, yes.

[Well, you were. That's precisely the position they were in, to be fair to DHS.]

#RobodebtRC

They take the morning recess. Expect the Royal Commission into the Robodebt Scheme to return 10-15 minutes from now.

We have the rest of today and some of tomorrow morning with Ms. Musolino, who has aptly proved herself another one of these fixated Grammar Nazis.

#RobodebtRC

They are back. Ms. Hogan-Doran SC (Cth) is explaining she's had a look at Ms. Musolino's chronology and decided it was worth withdrawing because it was quite extensive.

Commissioner Holmes doesn't seem to have a problem with it, but they'll have a chat later.

#RobodebtRC

[Mr. Scott brings up the Standing Operational Statements on Social Security Litigation (agreed between DHS and DSS).

It provides that DHS manages litigation on social services matters, and the principles and directions to which they are bound in doing so.]

#RobodebtRC

[There is a section on determining whether to appeal AAT decisions. There is a section on 'protecting the integrity of the social security system'.]

SCOTT: Generally, it sets out that a decision to appeal an AAT decision relates to the integrity of those systems.

#RobodebtRC

SCOTT: And to consider whether or not there is an important matter of law to be clarified or defended. This would be addressed by the AFAR process in DHS?

MUSOLINO: Yes.

S: It requires an assessment of impacts of a contrary decision, if left unchallenged?

M: Yes.

#RobodebtRC

SCOTT: When such an important matter of law arises from an AAT1 decision, should there be an appeal?

MUSOLINO: No.

S: Why's that?

M: It's clear there's a range of factors. The paragraphs aren't in hierarchical order. You need to look at all the factors.

#RobodebtRC

SCOTT: In the Robodebt context, when an AAT decision states a fundamental aspect of that scheme is unlawful, these principles would require an appeal? If the AFAR supported the prospects?

#RobodebtRC

MUSOLINO: It would depend on the other factors. A paramount consideration is the circumstances of the recipient in bringing the appeal. The agency wouldn't likely appeal and put a customer through that if they could simply implement the decision.

#RobodebtRC

MUSOLINO: An appeal wouldn't necessarily have resolved the 'threshold issue'

[Still dunno what she means by that]

SCOTT: It was a significant decision on the scheme's viability, with whole-of-Government implications?

M: AAT1 is non-binding, we'd have regard to it.

#RobodebtRC

SCOTT: When you say you wouldn't disregard it, the Social Security Administration Act requires the Secretary to regard it?

MUSOLINO: That's what the AFAR system is for. That's how we regard them. Every less-favourable decision is looked at and assessed.

#RobodebtRC

SCOTT: In the SSA Act, unless that decision is appealed, that'd mean an end to the use of averaging? By implementing the decision?

MUSOLINO: No. It's non-binding. You have to give regard to it. Other AAT decisions upholding, don't want to drag customers through AAT.

#RobodebtRC

MUSOLINO: AAT2 members may not have turned their mind to it, as it was a merits review.

HOLMES: So you just end up with a patchwork of things? You treat different social security recipients differently on the same facts? Isn't that a problem?

#RobodebtRC

MUSOLINO: The AFAR system was very transactional. More often than not, they're not going to recommend an appeal to avoid putting the customer through that.

HOLMES: By putting the REST of the customers through it?!?!?! You said your role was based in these systems.

#RobodebtRC

MUSOLINO: The framework in which these decisions is important to understand. There are a large volume, tight timeframes etc.

[blah blah we're very busy. You're too busy. Stop chasing hard-working people for debts then if you're so fucking busy!]

#RobodebtRC

HOLMES: Whatever the reason, you felt free to disregard the part of the AAT decision that said this was unlawful.

MUSOLINO: A legal view doesn't necessarily mean it's an error of law...

H: If you were going to implement the decision, you would stop averaging.

#RobodebtRC

MUSOLINO: The AAT views were all over the place. Views did not necessarily reflect the views of all members.

[A LEGAL TRIBUNAL IS NOT A MARKETPLACE OF IDEAS.]

SCOTT: What if your AFAR advice identifies that there was no error at law? How do you continue averaging?

#RobodebtRC

MUSOLINO: I'm sorry?

SCOTT: Where the AFAR states there's no error of law in the AAT decision, that holds averaging is unlawful, how do you continue to apply averaging? And not appeal the decision?

M: I'm confused.

[Yes, you are.]

#RobodebtRC

MUSOLINO: Not appealing an AAT decision isn't accepting the reasoning, as long as you're able to implement the decision in line with legislation. It's not equivalent. They're not endorsing that it's unlawful.

HOLMES: But...how?

M: It's hard to read an AFAR [???]

#RobodebtRC

HOLMES: How can it NOT be an acceptance of the lawfulness of the program?

MUSOLINO: Trying to think about how to explain it...they set out legal principles in respect of the facts. You're applying legal principles to a facts situation.

[This is fucking drivel.]

#RobodebtRC

MUSOLINO: The principles aren't contentious...you need probative evidence...

HOLMES: Your idea of an 'error of law', is VERY different to mine.

#RobodebtRC

SCOTT: Isn't an appeal necessary to resolve the conflict here?

MUSOLINO: The AFAR process was about reviewing the decision in front of you....

[We actually have all heard exactly how it works, so there's only one reason she'd feel the need to try and explain this]

#RobodebtRC

SCOTT: One of the principles is a significant matter of law where principles need to be clarified. Surely this is triggered when there are different views being expressed within AAT?

MUSOLINO: I don't think it's unusual for different members to differ on this.

#RobodebtRC

HOLMES: When would it EVER be triggered, then, if not in this circumstance?

MUSOLINO: The Secretary appealed later...the paramount consideration-

H: Yes, we've already heard about this. You wouldn't want the recipient to go through the trauma of an application.

🙄

#RobodebtRC

I support Ms. Hogan-Doran's actions regarding Ms. Musolino's 'chronology'. It was apparently quite detailed, and likely had the effect of providing Ms. Musolino with her preferred, pre-prepared responses.

#RobodebtRC

[Minutes from a quarterly liaison meeting in 2016 with the Commonwealth Ombudsman attended by Ms. Musolino.]

SCOTT: According to your statement, it was this meeting where you became aware of the Robodebt scheme?

MUSOLINO: The first time I'd seen details, yes.

#RobodebtRC

['Customer Compliance Briefing' describing the use of ATO PAYG data on a new platform for compliance.]

SCOTT: Do you recall who presented this item?

MUSOLINO: I believe it was Scott Britton as manager of compliance branch.

#RobodebtRC

SCOTT: Was the use of PAYG data described as averaging?

MUSOLINO: I don't recall.

S: In this paragraph the Ombudsman raised several potential issues with the process? Including that it shouldn't be seen as reliable relating to periods of employment?

M: Yes.

#RobodebtRC

SCOTT: A problem for the calculation of actual fortnightly income, as required in the Social Security Act?

MUSOLINO: I didn't turn my mind to it at the time, but I follow your logic.

HOLMES: Did you ever hear any explanation as to how that would be addressed?

#RobodebtRC

MUSOLINO: I haven't looked for that, so I don't know.

SCOTT: You certainly don't have a recollection of that, do you?

M: I don't know.

S: You don't have a recollection, or you don't know?

M: [Answer that somehow suggests both]

#RobodebtRC

[Email from a Counsel in the FOI division at DHS reporting on AAT response to the Online Compliance Intervention.]

SCOTT: You're CC'd to this email? And the response from Mr. Britton?

MUSOLINO: Yes.

#RobodebtRC

['Current AAT1 appeal numbers' describes increase of AAT appeals, but the numbers don't represent a threat to the program at a rate of 0.28%, and are unpublished at AAT1 level. It also notes the AAT has been 'more strident'.]

#RobodebtRC

SCOTT: It's a strange kind of comment, that they aren't published?

MUSOLINO: Statement of fact, I wouldn't attach significance to it...

S: In the context that AAT has been strident in its criticism. It's pointing out the criticism won't be published?

#RobodebtRC

MUSOLINO: I'm not in the mind of the person who wrote that. It's difficult to say. It seems a statement of fact.

[Imagine thinking anyone is buying this lmao]

#RobodebtRC

SCOTT: Reference there to a case of a recipient with Asperger's syndrome, asked Centrelink to write to him to explain themselves? You'd understand why he'd want that?

MUSOLINO: Yes.

#RobodebtRC

SCOTT: You were aware the process was the initial letter identified the relevant employers based on the ATO data?

MUSOLINO: Yes.

S: With no indication of how the recipient's entitlements were being calculated?

M: That's correct of those letters as they were then.

#RobodebtRC

SCOTT: There's a quote from the decision that states 'the applicant's correct rate of pension in relation to a fortnight depended in part on his earnings that fortnight'?

MUSOLINO: Yes.

S: 'The best evidence would be the employer's payroll records'?

M: Yes.

#RobodebtRC

SCOTT: 'If Centrelink cannot obtain those records it may need to resort to averaging.' It's obvious, isn't it, that in this passage the AAT was criticising the use of averaging without making an attempt to get actual evidence.

MUSOLINO: Criticising the process, yes.

#RobodebtRC

SCOTT: And this was the mechanism by which the Robodebt scheme operated?

MUSOLINO: It was by design. That was the design of the program.

S: So it wasn't using averaging as a 'last resort', was it?

M: Depends what you mean by 'last resort'...

[No, it does not.]

#RobodebtRC

SCOTT: The design of the process was that NO steps would be taken to obtain that information.

MUSOLINO: Correct. It removed that step by design.

S: Therefore it's clear however you interpret the phrase 'last resort', it wasn't being used as one under the program.

#RobodebtRC

MUSOLINO: It was becoming more of a default position, yes.

[IT WAS THE DEFAULT POSITION!]

SCOTT: By design it didn't use averaging as a last resort.

M: Blah blah blah customer's fault, in a sense those are steps(?) So it's sort of last resort.

#RobodebtRC

SCOTT: According to the plain and ordinary meaning of 'last resort', the scheme could not have been described as operating in this way.

MUSOLINO: How do I answer this...(she answers by babbling more drivel)

S: Can you say if you accept my proposition, Ms. Musolino?

#RobodebtRC

MUSOLINO: I accept your proposition in the way I've articulated it...

HOLMES: Mr. Scott, I think we've heard all we're going to on this.

#RobodebtRC

HOLMES: Common language in the DHS legal division that AAT decisions may not be 'sensible'?

MUSOLINO: Not the most respectful word we could have used there.

H: Was the AAT commonly spoken of like this?

M: Not my experience, no.

#RobodebtRC

Musolino says in her statement she returned from leave in January 2017 and was made aware of a draft legal advice.

Mr. Scott asks if it's the one he's produced written by Lisa Carmody. Musolino explains while she saw the email she has a slightly different version.

#RobodebtRC

[There are some other documents referenced in that part of her statement, one of which being the email from Russell De Burgh they had discussed earlier. It also references the 2017 advice.]

SCOTT: How did you find these documents all together?

#RobodebtRC

MUSOLINO: It's possible they were stapled together but I'm not sure why they came together as a pack.

HOLMES: Who is 'Sue Kruse'? The advice is addressed to her, do you know why?

M: Not sure what her interest was, no.

#RobodebtRC

SCOTT: What was the context for coming across the draft advice?

MUSOLINO: Handover meeting with Lisa Carmody, didn't have much awareness on returning from leave. Can't take a Commonwealth phone overseas.

S: Substantial adverse media publicity about OCI?

M: Yes.

#RobodebtRC

MUSOLINO: I'd probably figured that out before the handover.

SCOTT: You were aware the public criticism related to the use of income averaging?

M: Yes.

S: Ms. Carmody explained the circumstances of drafting her note?

M: It's likely she did, yes.

#RobodebtRC

SCOTT: Given the media publicity, you'd have read the draft note carefully on it being provided?

MUSOLINO: I would have read it in detail, yes.

S: It would have been expected by you that there was a prospect of a request for legal advice on this issue?

M: Yes.

#RobodebtRC

HOLMES: Were you not a bit concerned about this? An attempted justification of averaging as being reasonable, on the basis it was 'efficient'?

MUSOLINO: A lot isn't known. I didn't have much of an understanding of the program. Don't think many people in DHS did.

#RobodebtRC

HOLMES: So you're all busy giving each other advice, but no-one knows what's going on?!?!? You must have looked at this and thought 'this isn't a legal advice'.

MUSOLINO: None of us knew enough to form a view. It was 'all hands on deck'.

#RobodebtRC

HOLMES: Part of the information that seems to have been left out here, is the Social Security Act.

MUSOLINO: It refers to the Social Security Administration Act, but yes I take your point. It's not unusual to form a preliminary view. It's more instinctive.

#RobodebtRC

HOLMES: It has the tenor of 'we need to defend the Department's position', do you accept that?

MUSOLINO: I do, yes.

#RobodebtRC

SCOTT: 'We think there are some reasonable arguments that could support this approach'? Hardly a ringing endorsement, and reveals some hesitation?

MUSOLINO: I agree, there's uncertainty with whoever is drafting this. We were in the dark on the details of this thing.

#RobodebtRC

SCOTT: 'We understand fortnightly averaging has been used for some time'? Given the context, that statement has been made with very limited information on the historic use of averaging?

MUSOLINO: At that stage, yes. Based on what we'd learned to that date.

#RobodebtRC

SCOTT: Do you accept that whatever the historical use of averaging, that is irrelevant to its lawfulness?

MUSOLINO: [I think she basically accepted this one, I'm not sure. I didn't turn my mind to it.]

#RobodebtRC

It is 1300AEST, so the Royal Commission adjourns for lunch.

They will return in one hour (1400AEST/1500AEDT).

We have several more hours of Ms. Musolino's attempts not to answer a series of basic logical propositions.

My joy at knowing this is immeasurable.

#RobodebtRC

Despite her feeble attempts at arguing her way out of basic questions put to her by superior lawyers, it is very clear that most people with a hand in the senior management of DHS are facing a significant level of professional trouble.

#RobodebtRC

https://twitter.com/maximumwelfare/status/1619863975080108032

Thanks all for joining me this morning, and for the incredible support I've received since the start of this hearing block.

If we can keep this up, at this rate, I'll start making arrangements to attend Hearing Block 4 in person ASAP!!!!!!!

#RobodebtRC

gofundme.com/f/robodebt-roy…

This way, I'll be able to tell @SquigglyRick to tell the ABC guy to sit in a gallery seat where everyone can see him, too.

#RobodebtRC

Me when there's a conspiracy about the ABC suppressing Robodebt Royal Commission coverage because the ABC guy keeps sitting out of shot or, as he was this morning, directly behind the questioning Counsel Assisting and only recognisable to me by his hairline:

#RobodebtRC

I missed the last comment made by Ms. Musolino and mischaracterised it somewhat, please read Chris' commentary:

#RobodebtRC

https://twitter.com/chrisrudge/status/1619899531935772674

The Royal Commission has returned from lunch.

SCOTT: Do you agree the paragraph we were looking at before, attempts to justify the Robodebt scheme by purporting that affording an opportunity to the customer to respond qualifies as 'procedural fairness'?

#RobodebtRC

MUSOLINO: I don't see it as justifying it, it's describing the process.

SCOTT: In any event, procedural fairness is distinct from the requirement that decisions be based in evidence, yes? It's still unlawful if not based in evidence.

M: If not probative, I'd agree.

#RobodebtRC

SCOTT: It's purporting to be a draft advice on the lawfulness of averaging, isn't it?

MUSOLINO: It's marked 'draft', so yes.

S: The subject matter is the question of the lawfulness of averaging, in the context of the Robodebt scheme?

M: Broadly, yes

#RobodebtRC

SCOTT: Next paragraph identifies principles of the Social Security Administration Act? One of the principles not mentioned here is that the Secretary needs to apply Government policy in accordance with the law?

MUSOLINO: It doesn't call that out, no.

#RobodebtRC

SCOTT: And you reviewed this? Principle that abuses of the social security system are to be minimised...none of these provide a proper basis for administrative decisions to be made contrary to the principles?

MUSOLINO: They need to comply with law, I'd agree.

#RobodebtRC

SCOTT: It couldn't justify procedural fairness, or that decisions could be made without probative evidence?

MUSOLINO: I'd agree.

#RobodebtRC

[Going through the Public Governance Accountability Act, which regards Departments have to be managed in a way that promotes proper use of public resources, and that Secretaries have a statutory obligation to recover debt unless uneconomical]

#RobodebtRC

SCOTT: Nothing here that overrides the general requirement for probative evidence?

HOLMES: There's nothing here that provides a justification for averaging, is there?

MUSOLINO: No.

#RobodebtRC

SCOTT: In light of that, would you accept the draft advice you reviewed provided no basis to be confident that averaging was lawful?

MUSOLINO: It's not sufficient to form that view, no.

HOLMES: It's poor advice from DHS, it really doesn't offer any justification.

#RobodebtRC

MUSOLINO: DSS turned their mind to the legality when they put it to Cabinet, and it's more than this.

HOLMES: Interesting to hear you describe it that way, as DSS characterised it as DHS' process.

M: Okay. I couldn't speak to that as I wasn't involved in the NPP.

#RobodebtRC

[January 2017 email (while Musolino was on leave) about draft instructions for the Australian Government Solicitor (AGS).]

[We are now looking at the attached draft instructions, which Ms. Musolino was able to review last night.]

#RobodebtRC

DHS wanted to ask the AGS to answer whether they could use averaging by reference to legislation, or by any capacity via administrative or business principles.

SCOTT: You weren't made aware that draft instructions had been prepared by lawyers in your division?

#RobodebtRC

MUSOLINO: No. I don't recall at all.

HOLMES: Is that an unusual scenario?

M: I was on leave, I'm not sure what happened there.

#RobodebtRC

Mr. Scott produces an internal draft advice compiled by Sue Kruse, A/g Deputy Secretary of Enabling Services in DHS.

Ms. Musolino hasn't seen it before.

It's not just Clayton Utz anymore.

Suddenly all sorts of advices we haven't seen are spilling out everywhere.

#RobodebtRC

Kruse recommends that external advice be sought given '...the complexity of legislation and the significance of the issue'

SCOTT: Clearly the prudent step to take?

MUSOLINO: Someone's formed that view around 10 Jan 2017. I dunno what that's based on.

#RobodebtRC

MUSOLINO: Like I said, I doubt legal services had a good understanding of the scheme around 10 January.

SCOTT: But can you think of any reason why it wouldn't be prudent to obtain external legal advice at that stage?

M: It might have been. It may have changed.

#RobodebtRC

MUSOLINO: That call is made at a very premature point of the process of understanding what's going on with the program.

[That is an utterly weak excuse.]

SCOTT: Did you become aware of any of this legal advice during January?

M: A range of advices.

#RobodebtRC

MUSOLINO: I put out a call for any advices around that time, to obtain those advices but also to provide to Ombudsman.

SCOTT: But none of those advices gave a considered view as to the lawfulness of averaging, did they?

M: Not squarely on that point.

#RobodebtRC

SCOTT: Which is, whether or not decisive weight could be given to averaged ATO PAYG data, in the calculation of debts?

MUSOLINO: Yes.

#RobodebtRC

The next exhibit is an email sent in late January to Musolino and Johnathan Hutson about the 'Guardian article' which is @knausc's article on Slater & Gordon investigating the lawfulness of the scheme.

Musolino is told the Minister and PM will likely have questions.

#RobodebtRC

Golightly asks if DHS lines on the matter form the 'kernel' of any legal advice they had, and that she doesn't want to 'scare the horses'.

SCOTT: What did she mean by that?

MUSOLINO: She was trying to avoid giving the impression we were doing something wrong.

#RobodebtRC

SCOTT: And what would be the purpose of that? Legal advice would have been privileged. It would not have reached the public.

MUSOLINO: There are process like Senate Inquiries and Estimates which may compel them. It's hard for me to know what she meant.

#RobodebtRC

SCOTT: Surely, if external legal advice is obtained, and there's confidence it'll confirm the lawfulness of what's happening, that would give confidence to the Minister and the public?

MUSOLINO: I agree with that statement. Those aren't my words.

#RobodebtRC

SCOTT: Can you think of any reason that's consistent with the interests of the Commonwealth not to obtain legal advice?

MUSOLINO: I can't think of any reason, but that's different from being a requirement.

[YOU WERE A PRACTICING LAWYER?!?!? MY GOD!?!?!?!]

#RobodebtRC

SCOTT: You acknowledge to Mr. Hutson that there isn't an advice that covers the end-to-end process? And that you recommend an end-to-end review. You note the legal questions on averaging. You have formed the view at this time there wasn't any assurance?

#RobodebtRC

MUSOLINO: I hadn't formed a view at that stage. By 23 Jan we were still in a fact-finding phase.

SCOTT: As a consequence you recommended an end-to-end advice be done, including with respect to the lawfulness of averaging absent other information?

MUSOLINO: Correct.

#RobodebtRC

SCOTT: Mr. Hutson responds to Ms. Golightly's 'scare the horses' email. On the previous page he suggests considering external advice if needed. He asks if DHS has been relying on internal advice that could use an AGS view?

MUSOLINO: Yes. He'd turned his mind to it.

#RobodebtRC

SCOTT: Your response is the comment about not having end-to-end advice. Then Golightly thanks you and suggests the three of you discuss the pros and cons of getting further advice?

MUSOLINO: Yes.

S: You sent the meeting invite as proposed by Ms. Golightly?

#RobodebtRC

[Some pause while Ms. Musolino reviews her statement with assistance from Ms. Hogan-Doran SC (Cth)]

MUSOLINO: A meeting invitation circulated on 23 Jan for 24 Jan, updated to show I dialled in by phone.

SCOTT: You haven't been able to identify any notes?

M: No.

#RobodebtRC

SCOTT: Can we take it that this meeting never took place?

MUSOLINO: It may have taken place, it may have been discussed in some other way. Lots of meetings moving around at that time.

S: You referenced a further meeting, could have been rescheduled?

M: Possible.

#RobodebtRC

SCOTT: Usual practice to take notes in your notebook?

MUSOLINO: Depended on the meeting. Didn't have a practice of taking detailed notes for meetings. If meetings had lots of papers I would make notes on them. If there were actions resulting I'd put it in an email.

#RobodebtRC

SCOTT: So any emails you've found relating to action items from any meeting with Mr. Hutson and Ms. Golightly on whether to get external advice?

MUSOLINO: I haven't identifed any.

S: Possible it never occurred?

M: Yes.

#RobodebtRC

SCOTT: Nevertheless, the outcome was that no external legal advice was sought?

MUSOLINO: Correct.

HOLMES: How did this just die?

M: I recommended the end-to-end process. A lot of action going on relating to media and Senate and Ombudsman. Particular focus on Ombo.

#RobodebtRC

MUSOLINO: Priority was providing information to Ombudsman.

[Uhhhhhh no it fucking wasn't]

M: I'm confident Malisa mustn't have instructed me to take action, because I would have.

#RobodebtRC

SCOTT: A meeting about the 'pros and cons' of getting advice. What could possibly be a 'con' of getting advice?

MUSOLINO: Like I said, another piece of work, another review while we were struggling to manage all the inquiries and attention. Resources stretched thin.

#RobodebtRC

SCOTT: You're aware, now, there were draft instructions for the AGS by this?

MUSOLINO: Yes.

S: Wouldn't have taken those lawyers very long to draw those up?

M: Wasn't talking about the legal team, an end-to-end review is a complex process, business area stretched.

#RobodebtRC

SCOTT: Well, at that time you were of the view there was no assurance that the practice of averaging was lawful?

MUSOLINO: I didn't know if there was assurance or not. That's why I emailed all the counsels for every scrap of advice we had.

#RobodebtRC

SCOTT: It was so significant that a draft advice on the issue had already been drawn up that you WERE aware of.

MUSOLINO: Yes.

S: The prudent course was to seek external advice.

M: I think the prudent thing was an end-to-end review, and I recommended it.

#RobodebtRC

SCOTT: You see...you must have been aware at that point, given your lack of assurance that averaging was lawful, that there was a real prospect that legal advice would come back saying it was unlawful.

MUSOLINO: I didn't know that, I didn't know anything yet...

#RobodebtRC

SCOTT: When you asked your division for the advice they had, nothing that came back in response addressed the question of the lawfulness of averaging under the OCI?

MUSOLINO: No advice specifically answered that, although they refer to it.

#RobodebtRC

SCOTT: So following the responses to that email, you would have had no greater assurance that averaging was being applied lawfully.

MUSOLINO: I couldn't achieve assurance without looking at other things.

#RobodebtRC

MUSOLINO: The advices we had internally assumed averaging was okay as a pre-condition.

SCOTT: Reference to a practice that makes no comment on lawfulness isn't advice, is it? As Chief Counsel, you had to form your own view?

M: Based on the advice I received.

#RobodebtRC

MUSOLINO: DSS owns the legislation. I don't think people had assumed it was lawful, but they may have taken it as a pre-condition of the advice.

SCOTT: Admin. decisions need to be based in evidence.

M: I don't recall if that came up in any of the advices or not.

#RobodebtRC

I don't believe that *should* need to come up in the advices, Ms. Musolino, as a Government lawyer managing a legal division.

#RobodebtRC

SCOTT: This is the email between Maris Stipnieks and Russell De Burgh as we've been discussing previously?

MUSOLINO: Yes. I believe it was forwarded to me. Attached to this chain was combined 2014 and 2017 Pulford advice in my recollection.

#RobodebtRC

They are discussing the response to the Ombudsman. Looking at the attachment that summarises the 2014 and 2017 advices together.

SCOTT: Did you understand these two advices to be legal advices?

MUSOLINO: Yes, in the context of Ombudsman's request to DSS for advices

#RobodebtRC

SCOTT: Did you know who the authors of these advices were?

MUSOLINO: I don't believe I did know that, no.

S: Contains the question, and 'short advice', a summary that 'annual smoothing' may not be consistent with legislation? That means 'averaging'?

M: Yes.

#RobodebtRC

SCOTT: The conclusion is a clear statement that it 'may not be derived consistently with the legislative framework', correct?

MUSOLINO: Yes.

S: That conclusion is made abundantly clear in the closing paragraphs?

M: [Reading them silently] Yes. Subtly different?

#RobodebtRC

SCOTT: The words in the short advice, and in the last paragraphs, both clearly indicate it's not a permissible means of calculating debt?

MUSOLINO: Reflects the fact it may not actually be correct as well. It's not actual data.

#RobodebtRC

SCOTT: 2017 advice is after it's gone live. So the only legal advice the Commonwealth had before the scheme started was the 2014 advice, correct?

MUSOLINO: The email from Mr. De Burgh indicates DSS turned their mind to it in 2015 as part of the Cabinet process.

#RobodebtRC

MUSOLINO: I assume they had advice during that time.

SCOTT: Surely if they had, that would have been provided to the Ombudsman too?

M: They may well have been. I don't recall the circumstances of Mr. De Burgh's email or what was provided by DSS.

S: Let's read it.

#RobodebtRC

SCOTT: 'Hi Maris, here's the information we're giving to the Ombudsman, happy to discuss further?', surely if there was relevant information that DSS were giving the Ombudsman it would have been here?

MUSOLINO: There was material going back and forth as we found it.

#RobodebtRC

SCOTT: Do you accept what follows is a proposed statement to the Ombudsman?

MUSOLINO: Proposed in the sense of saying 'this is what we're forwarding'.

S: They say here that they sought internal legal advice during 2014. Indicating the approach isn't supported.

#RobodebtRC

SCOTT: Clearly a reference to the 2014 advice we just looked at. There's a reference to that being communicated to DHS, and this being reflected in DHS briefing to their Minister. Were you aware of that?

MUSOLINO: No. I was aware of a communication of some kind.

#RobodebtRC

SCOTT: 'DHS took DSS' concerns into account and made adjustments to process. By 2015 DSS gained a better view of consistency with legislation...as such we considered legislative change no longer required.'

MUSOLINO: Yes.

S: Further advice was not sought at the time

#RobodebtRC

MUSOLINO: It says DSS no longer considered changes required, I don't think they needed to proceed with changes, not that advice wasn't sought.

SCOTT: Notwithstanding that, advice wasn't specifically sought?

M: It wasn't considered required, correct.

#RobodebtRC

SCOTT: No other reference to further advice being sought?

MUSOLINO: It reflects DHS and DSS coming to an understanding, which I would think would be informed by legal advice...

S: Which is not attached to this email?

M: I had no visibility of what DSS provided.

#RobodebtRC

SCOTT: Whether further advice was sought or not, that advice was never seen by you?

MUSOLINO: Ah, no.

S: So you were in no position to evaluate whether your advice was correct or not, were you?

M: I relied on what was described here about the Cabinet process.

#RobodebtRC

MUSOLINO: I wouldn't have expected it to be attached here.

SCOTT: You assumed there would have been further legal advice?

M: I would have.

S: Based on the statements we've discussed here, which contain no specific reference to any such advice?

#RobodebtRC

MUSOLINO: It doesn't spell it out. I interpreted it to mean that DSS had sought it during the Cabinet process.

SCOTT: If that was the case, what would be the point of getting the 2017 advice?

M: I can't help you with that.

#RobodebtRC

HOLMES: None of this makes any sense, does it?

MUSOLINO: The 2014 advice doesn't make any reference to asking to customer.

H: On your knowledge of the Social Security Act, how does that make any sense?

M: I didn't have visibility about what had changed.

#RobodebtRC

MUSOLINO: I felt very assured that the policy agency, DSS, was assuring us.

HOLMES: They say they were relying on you? I'm not sure how I can believe any of this.

M: It took us a while to figure out how Robodebt worked. There was a big gap in our understanding.

#RobodebtRC

HOLMES: When you say 'our', who's 'we'?

MUSOLINO: Can only speak for myself and the legal team.

#RobodebtRC

SCOTT: If there had been legal advice obtained between 2014 and 2017, how could there be any need to seek clarity in regards to the OCI?

MUSOLINO: Lots of questions being asked. Somebody wanted further assurance. I can't answer why DSS thought they needed the 2017.

#RobodebtRC

SCOTT: You well knew, when reading this email, that DSS had no legal advices between 2014 and 2017.

MUSOLINO: I completely reject that.

S: In any event, you never saw any advice!

M: It's not unusual to rely on agencies we deliver policies for. It's their program.

#RobodebtRC

SCOTT: You well know that if there had been advice, it would have specifically be mentioned in THIS email.

MUSOLINO: I don't agree.

#RobodebtRC

SCOTT: As a lawyer, it is not open to you to be satisfied of the position set out in this email by reference to legal advice you SPECULATED existed, and never saw.

#RobodebtRC

HOLMES: The legislative requirements were never addressed, nor were they ever considered. Don't you look at this email and see it's not plausible they had advice?

MUSOLINO: It's spelling out DSS' perspective that they're satisfied.

#RobodebtRC

HOLMES: Doesn't the basis on which they're satisfied make you think 'oh dear'?

MUSOLINO: We were learning about the scheme.

SCOTT: You weren't learning about the requirement for decisions to be based in evidence, were you?

M: That's implicit in 'DSS satisfied'.

#RobodebtRC

SCOTT: The opening sentence refers to the seeking of the 2017 advice. The statements that follow purport to be taken from that advice, correct?

MUSOLINO: Yes.

S: Represents to the Ombudsman that the scheme was lawful according to 2017 advice?

M: Yes, presumably.

#RobodebtRC

SCOTT: The first sentence in 2017 identifies the question, whether 'using income averaging as a last resort' is lawful?

MUSOLINO: Yes.

S: You knew by the time you received this, that it wasn't being used as a 'last resort'?

M: I don't agree with that. It depends.

#RobodebtRC

SCOTT: You agreed with me before lunch, that the process under the OCI scheme at the end of 2016, that averaging was not being used as a 'last resort'.

MUSOLINO: In the context of how the scheme worked, it was. It was an abridged process. Steps had been removed.

#RobodebtRC

MUSOLINO: It was the last step of the program design, which means its the 'last resort'.

SCOTT: That's your evidence? That's what you understood it to mean? That's what DHS understood by it?

M: It's the default position, a default position is 'last resort'.

[What]

#RobodebtRC

MUSOLINO: The scheme was not designed to use that step, it was deliberately removed.

SCOTT: So if a step gets removed, not taking that step satisfies 'last resort'. Is that your evidence?!?!?

M: That must have been how it was understood at the time.

#RobodebtRC

HOLMES: You didn't happen to go with Ms. Golightly to any of the briefings she gave DSS et all where she used the term?

MUSOLINO: No.

H: Did she use the term often?

M: I don't recall the term being used...

H: You didn't have to wait for the Ombudsman's report...

#RobodebtRC

SCOTT: The author of the 2017 DSS advice is trying to make an argument that it may be necessary to use averaging as a 'last resort'?

MUSOLINO: I dunno what the intention was. The key take-out for me as you could make a lawful decision based on averaging.

#RobodebtRC

SCOTT: As a last resort.

MUSOLINO: I don't think it mattered, it turns on the information you have, not when you got it. I'm not sure. My takeaway was the key point is it's lawful to make a decision based on averaged ATO data. Maybe it was a known issue?

#RobodebtRC

MUSOLINO: I don't know if that answered your question.

[It assuredly did not.]

HOLMES: It sounds like you don't agree with the underlying reasoning, and your takeaway is that averaging is lawful?

M: I don't disagree with the reasoning. It was key to the design.

#RobodebtRC

HOLMES: It's saying unless you have some basis of evidence averaging is NEVER accurate.

MUSOLINO: Unless it aligned with the fortnights...

H: I think we've wondered off the legal justification. There's not much offered here, but you were happy to accept it.

#RobodebtRC

MUSOLINO: If you follow 50 steps and it's not sufficiently probative, you've still got a problem. If ATO data is sufficiently probative, it becomes the default position, which is what happened. And letters were sent to old addresses etc.

#RobodebtRC

HOLMES: But the question of accuracy is one of maths. You're not going to find any legal support for averaging in the notion it's the only evidence available.

#RobodebtRC

MUSOLINO: I take point there's a mathematical reality. Administrative decisions often taken without full evidence. I think this was understood.

HOLMES: Then why did you do it?!?!?

M: We needed a more efficient process.

H: A more efficient 'hit-and-miss' process...

#RobodebtRC

SCOTT: I think you agreed with me earlier that efficiency isn't a justification for unlawfulness in this process, yes?

MUSOLINO: I absolutely agree, yes.

#RobodebtRC

SCOTT: As a matter of fairness, given the question addressed by this advice is whether averaging can be used as a last resort, you knew the representation by Mr. De Burgh is clearly false?

MUSOLINO: I reject that.

#RobodebtRC

Commissioner Holmes has misread her watch and almost adjourns proceedings an hour early. Woof!

Time is flying due to how much fun she's having, according to our Commissioner.

#RobodebtRC