Teachers demand more scrutiny of Catholic school funding amid Icac inquiry into ‘sham arrangement’ with Liberal group

Independent Education Union ‘deeply concerned … public funding for Catholic schools may have been wrongfully spent on Liberal party matters’

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The union for independent school teachers in New South Wales has demanded greater scrutiny of Catholic schools as the chief executive of their governing body told a corruption inquiry payments to a lobbying firm were not a “sham arrangement” to fund Liberal party factional work.

Dallas McInerney insisted to the NSW Independent Commission Against Corruption (Icac) on Friday that Catholic Schools NSW funding wasn’t misused.

Icac is investigating whether McInerney arranged and approved illegal donations from the governing body for 600 Catholic schools to support alleged branch stacking efforts of the Christian factional group the Reformers.

The group wanted more conservative policies on issues such as abortion, euthanasia and same-sex marriage.

The inquiry has heard that Catholic Schools NSW paid Beckington, a lobbying company run by Reformers Christian Ellis and Jeremy Greenwood, $130,900 through invoices for consulting services between August 2019 and August 2021.

Greenwood’s company, JPG Advisory, was paid $135,000 between December 2021 and December 2023. The commission has heard that Reformers Robert Assaf and Dylan Whitelaw spent work hours on factional efforts while employed at Catholic Schools NSW.

On Friday, the Independent Education Union’s NSW branch, which had previously declined to comment while the inquiry was under way, said it was “deeply concerned by … [allegations] that public funding for Catholic schools may have been wrongfully spent on Liberal party matters”.

The IEU NSW/ACT branch secretary, Carol Matthews, said close scrutiny of public funding “was not applied to organisations such as Catholic Schools NSW that receive funding on behalf of Catholic diocesan schools”.

“Regardless of the findings of Icac in this matter, there should be greater scrutiny of bodies such as Catholic Schools NSW, which receive public funding on behalf of non-government schools,” Matthews said in a statement. About 80% of the funding distributed by Catholic Schools NSW comes from the state and federal governments. Government funding totalled about $3.8bn in 2024. The NSW premier, Chris Minns, has ruled out an independent audit of the schools governing body while Icac’s inquiry is under way.

McInerney stood aside from his role as CEO before the Icac hearings began “to allow the work of Catholic Schools NSW to continue its important mission”, he said in a statement previously. Catholic Schools NSW has previously said it “does not intend … to provide responses to questions that supersede the eight-week inquiry and legal process that is under way”.

McInerney on Friday was asked about messages in February 2021 between Assaf and fellow Reformer Jean-Claude Perrottet, the younger brother of former NSW premier Dominic Perrottet, who is not accused of wrongdoing. Assaf and Jean-Claude were not directly employed by Beckington.

Jean-Claude Perrottet wrote to Assaf: “Ellis and I caught up with Dallas in Bowral to discuss money, had a long convo.”

The counsel assisting Juliet Curtin asked if the reason for Assaf and Jean-Claude’s interest was “because they knew that the arrangement in place was that you would pay Beckington money pursuant to a sham arrangement” – under which the money would come to them.

“No,” McInerney said on Friday. He said he could not recall the Bowral meeting. McInerney rejected evidence previously given by Assaf to the inquiry that Greenwood and McInerney met this year to discuss their summons.

The inquiry has previously heard that Jean-Claude Perrottet received money from Beckington. When the Catholic Schools NSW contract moved in 2021 from Beckington to JPG Advisory, Assaf and Jean-Claude allegedly each received a “kickback”, in Jean-Claude’s case, 50% of the monthly retainer, after he secured the contract with McInerney.

On Friday, McInerney repeatedly described Jean-Claude Perrottet as his “conduit” to Greenwood, who ran JPG.

Dylan Whitelaw, who worked at Beckington after being employed by McInerney at Catholic Schools NSW, has previously given evidence there was an arrangement under which payments from the schools’ governing body to Beckington were used to fund Reformers’ activities. McInerney repeatedly denied this.

McInerney was asked on Friday why Whitelaw, then only 21, was involved in negotiating an increase in Beckington’s retainer in 2021, and why McInerney cited Whitelaw’s departure from the company as a reason to end the contract with Beckington.

“I’m not confident they’ll have the in-house expertise to support our needs in the way DW [Dylan Whitelaw] has been,” McInerney wrote to a colleague.

On Friday, McInerney, who described Whitelaw as a “junior” at Beckington who carried out an “account manager” role and was responsible for “administrative interplay”, said his language had been consistent.

“Your in-house expertise as an account manager is … knowing the client, the rhythms, the relationships, how they service,” he said. The inquiry has previously heard that McInerney came to know Whitelaw through the Mittagoing Liberal branch after first meeting his parents. He employed Whitelaw at Catholic Schools NSW in 2019 after he graduated high school.

On Thursday, McInerney said correspondence leading up to the Beckington contract in which he told Ellis to get an ABN and a mailbox was “traditional due diligence”. He denied he was attempting to provide “a veneer of legitimacy” to the contract.

On Friday, the inquiry – and McInerney – learned that the ABN provided by Ellis in fact belonged to Ellis’s sister.

After Curtin suggested it showed due diligence “wasn’t particularly effective”, McInerney said: “I will add the point [that] I thought it was, but I’m happy to be enlightened”. The inquiry heard Beckington later wrote Catholic Schools NSW’s name incorrectly on invoices.

After Curtin suggested evidence of written work by Beckington was “de minimis”, apart from calendar entries for monthly meetings, McInerney insisted Beckington did consult for Catholic Schools NSW.

Asked if Beckington’s input was “only ever given orally”, McInerney said that Beckington had contributed to two “forward plans for public affairs and engagement in 2019” which involved “exhaustive planning sessions”.

The commission heard McInerney provided the two documents but there was no written evidence of Beckington being involved in the drafting process.

McInerney was expected to appear again before Icac next week.