A senior staff member at Catholic Superannuation Fund failed to declare that businesses associated with his brother and wife were winners of lucrative million-dollar-plus marketing contracts in a major breach of conflict of interest rules, the royal commission has heard.
Catholic Super general manager investor relations Rob Clancy failed to disclose that his brother and wife were shareholders or directors of companies that picked up plum contracts from the industry super fund that holds $9 billion of funds on behalf of mainly teachers within the Catholic sector, the royal commission has heard.
Mr Clancy has been put on leave as Catholic Super reviews the matter, the royal commission heard on Wednesday.
Mr Clancy's brother Paul Clancy's company Australian Family and other companies associated with Paul Clancy and Rob Clancy's wife Jennifer Kernahan won contracts of up to $2 million from the superannuation fund.
According to evidence presented to the royal commission, Australian Family has received $1.5 million in business from the fund and $500,000 in sponsorship expenses since 2010.
Mr Clancy's brother Paul was a director of Australian Family, a company recruited by the fund to assist in research into interest in Catholic super funds in the early childhood learning sector, counsel assisting the royal commission Albert Dinelli said.
He is also a director and shareholder in Family Pack Services, another company to win a contract from Catholic Super.
One of the companies was also recruited to conduct a review of work completed by another company related to Mr Clancy.
Catholic Super is also investigating $46,000 in credit card spending by employees that is allegedly in the breach of the fund's rules.
Mr Clancy's alleged breaches are the biggest single-person conflict of interest issue to be raised at the royal commission during the royal commission's two weeks of hearings into the $2.6 trillion superannuation sector.
Catholic Super deputy chair Peter Haysey told the Royal Commission that Mr Clancy only revealed the full extent of his conflicts in July this year.
"Since 2011 or 2010, Australian Family had been engaged and Robert Clancy failed to disclose that potential conflict until May 2015," he said.
Mr Haysey said that when Mr Clancy later revealed further conflicts this year: "I insisted it be put on the conflicts register."
Mr Haysey said Mr Clancy's email account showed he had regular email contact with his brother about opportunities and contracts that his brother's private business could secure at Catholic Super. Catholic Super manages more than $9 billion on behalf of 74,000 members.
"There are numerous examples of email correspondence between the brothers that are a breach of not only the conflict policy but our email policy," Mr Haysey said.
Mr Haysey confirmed that emails in May showed Mr Clancy chatting with his brother about particular tasks Mr Paul Clancy's companies could provide to Catholic Super.
"It’s fair to say it’s (the email communications between the brothers) been continuous," Mr Haysey said. "Confidential information has been disclosed in the emails from Rob to Paul," Mr Haysey added. Some of these discussions were held after Mr Clancy made his initial report of a conflict in 2015.
He said the fund had only become aware of the extent of the communications between the brothers as a result of preparing for the royal commission.
Rob Clancy's brother Paul Clancy is linked to three companies with contracts to Catholic Super. This includes being the managing director of Australian Family Network, director of Family Pack Services and Paul Clancy Consulting Pty Ltd (was previously called 'Australian Family Magazine Pty Ltd).
The royal commission also heard that Rob Clancy's wife, Jennifer Kernahan, is a shareholder of Family Pack Services which has a sponsorship arrangement with Catholic Super.