An RSL Queensland whistleblower says he has been vilified because of his role in scrutinising cash allowances paid to directors.

The "out-of-pocket" allowances included $1,600 for the president and $700 per month for directors, who were not required to produce receipts demonstrating they had been spent on legitimate RSL activities.

Peter Ryan, who was elected to represent the Moreton district on the board in 2015, said he first noticed the cash being deposited in his personal bank account and queried the practice.

Mr Ryan, a former army parachutist, said he was surprised by the out-of-pocket cash payments — which came in addition to other benefits already provided to directors.



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"Everything is provided — all your travel, all your meals, all your accommodation, all your suits, shirts, your computers, internet, phones, cars, Cabcharge, Virgin club, Qantas Club, just to name a few," he said.

Mr Ryan was elected to the board of the RSL in June 2015, and said he was shocked at the lavish RSL headquarters in Brisbane when compared his small sub-branch in Lowood, west of Brisbane.

He said his reaction was: "Wow! Is this where all the money is?"

"You walk into the boardroom and one of the chairs would have kept one of my sub-branches alive for 12 months," he said.

Concerns raised over out-of-pocket expenses

According to the RSL's financial statements from December 31, 2015, the Queensland branch had $54.5 million in cash and term deposits.

Mr Ryan said he was concerned at what he perceived to be lack of accountability in the RSL's accounts, so he reinstated a defunct internal audit committee and became its chairman.

Of particular concern to Mr Ryan was the possibility that the directors' out-of-pocket expenses might be construed by the tax office as wages, because no receipts or proof of purchase were required.

Peter Ryan (far left) in his army days, about to head out on an operational jump. ( Supplied: Peter Ryan )

Mr Ryan said he was worried this might affect the RSL's charitable status, and he also raised questions as to whether the directors could still be regarded as volunteers if their cash payments were considered wages.

An external audit was conducted by accountants BDO and their initial advice was that directors' out of pocket expenses ought be considered as wages.

At this point Mr Ryan said he instructed the RSL to no longer deposit the cash payments into his accounts.

"I totally refused to accept any more money," he said.

"They continually placed money into my account. I then sent more emails in and threatened to close my bank account."

Letter alleges undeclared conflict of interest

Mr Ryan said he was then subjected to disciplinary action by the RSL, and asked to show cause why he should not be suspended from his position on the board.

RSL Queensland alleged his conduct was detrimental to the league, because he had not declared a conflict of interest when there were discussions about the employment of his partner Tracey Anderson, who worked as the district secretary in his region.

Two days after receiving the show cause letter, the RSL Queensland board sent a letter to all members of Mr Ryan's subdistrict containing the same allegation. It was signed by all board members, except Mr Ryan.

Following this, Mr Ryan lodged an application with Fair Work Australia against RSL Queensland and the board, claiming the allegations against him were untrue.

Peter Ryan and and his partner, Tracey Anderson. ( Supplied: Peter Ryan )

Mr Ryan said he received many distressed calls from members asking him about the allegations.

"Many were from families of very elderly veterans that were in homes. They were saying: 'You've upset my father,'" he said.

Others, he said, called to ask: "Why have my children been sent letters from RSL Queensland?"

"They also wrote the letter to the women's auxiliary, the children's bands, the whole works and jerks, trying to say that 'Peter Ryan has been telling you lies, he's done this wrong, he's done that wrong,' ... totally discrediting [me] and saying that I'm telling lies," said Mr Ryan.

In September last year, following conferences with the Fair Work Commission, RSL Queensland agreed to withdraw the letter sent to all members, and replace it with one agreed to by the parties.

The commission's deputy president, Ingrid Asbury, noted: "It is arguable that Mr Ryan has been denied natural justice on the basis that the board members who signed the letter have indicated views ... adverse to Mr Ryan, in advance of Mr Ryan being able to participate in the show cause process."

She said she was of the view that RSL Queensland ought to "reconsider the show cause process and whether it proceeds".

RSL staff ordered not to disclose report

As a result of the audit ordered by Mr Ryan, a draft financial statement for the year ending December 31, 2015 was prepared.

Under the heading "directors' remuneration", it noted directors had been paid $65,000 in 2014 and $109,000 in 2015 in out-of-pocket expenses.

After the audit, RSL Queensland president Stuart Cameron wrote an extraordinary email to all directors under the heading "future".

In that email, Mr Cameron reiterated to the directors that their out-of-pocket expenses and their veterans' pensions entitlements would be protected.

"I made the point to BDO that I will not accept anything that will place you in a position that is detrimental to you. I am very firm on this point. There's no negotiation on this," the email read.

Mr Cameron also wrote that RSL staff were warned they were under strict instructions not to disclose the contents of the report.

He wrote: "When required, I have been and will be ruthless in looking after the team."

"Please do not discuss any of this and I am determined to ensure you are not at risk. I have chosen my words carefully in this email can I ask you do not respond and after reading please delete the email."

Clause rewritten, taxes paid to ATO

Later, BDO produced advice that if the directors provided declarations attesting to all out-of-pocket expenses being legitimately spent on RSL activities, then financial statements could reflect that the directors received no remuneration and their positions were voluntary.

At the March 2016 board meeting of RSL Queensland, the directors agreed to a substitute clause, which read: "The directors of the Returned and Services League of Australia (Queensland branch) act in a voluntary capacity and receive no remuneration for their services."

In response to questions from Background Briefing, Mr Cameron said in a written response that the directors "made the changes ... to be consistent with their views they work as volunteers rather than paid employees".

That year RSL Queensland also discovered as a result of the BDO audit that director and staff entitlements, which included cars, electronics, travel and entertainment, had attracted fringe benefits taxes of $321,000 that had not been paid. This was then voluntarily paid to the ATO late last year.

This month, the RSL Queensland sought a ruling from the ATO on how it should treat out-of-pocket expenses to ensure clarity and transparency in the treatment of expenses and payments to volunteers.

Though Mr Ryan is still facing the threat of suspension from the league, he said would march on Anzac Day with his Lowood branch.

"I'm just ashamed ... I used to be so proud when I was an employee of the organisation, and now I just can't get far enough away from it," he said.

