Heading the inquiry: Former Commonwealth ombudsman Dennis Pearce. Credit:Alex Ellinghausen The CSIRO, in an awkward position as a government agency, could not respond publicly to the allegations. In December, after a lengthy investigation Comcare issued CSIRO with a legal notice ordering ''improvement'' of the way it handled workplace misconduct. Soon the opposition was claiming it was aware of 100 individual cases of bullying. In February Megan Clark responded. The chief executive placed a letter on the CSIRO website announcing her decision to establish an ''independent inquiry'' into workplace bullying, which is now being run by a consultant and former Commonwealth ombudsman Dennis Pearce. The ''victims of CSIRO'' group is unimpressed by the scope CSIRO gave Pearce, while senior CSIRO officials are unimpressed by the claims the inquiry has been set up to examine. At a recent Senate hearing, Mike Whelan, a deputy chief executive, said: ''Lots of allegations have been tossed around by stakeholders and media in recent times, and I would have to say that the bases for some of those are pretty dodgy.'' Whelan may be right. Some have hitched themselves to the campaign with dubious claims of mistreatment; others were themselves the subject of adverse findings for bullying.

In dispute: Entomologist Sylwester Chyb is taking action against his former employer. Credit:Michael Clayton-Jones The group suffered a blow recently when the Fair Work Commission dismissed an application by the ''victims'' spokesman Andrew Hooley to be granted an extension of time to appeal against his February 2011 dismissal from the CSIRO: ''There is no evidence upon which I could be satisfied that CSIRO took prejudicial action against Mr Hooley either before or after his employment ended.'' But there are other people attached to the group who have the potential to embarrass the organisation. The most serious surfaced in December, when a court made adverse findings about two senior CSIRO officials. One, Damien Thomas, was found to have sent a ''deliberately false'' email in an attempt to mislead business manager Martin Williams. Holding the reins: Dr Megan Clark, Chief Executive CSIRO. Credit:Bohdan Warchomij Another, Calum Drummond, was found by the Administrative Appeals Tribunal to have given evidence that could not be trusted. He had denied to the court that during the affair he had sidestepped the organisation's formal recruitment process. Of his evidence, deputy president James Constance said: ''I am not satisfied that Dr Drummond was a reliable witness and I do not make any findings of fact based on his evidence.'' Drummond now sits one rung below the chief executive.

The Williams case was a glimpse of another side of the organisation rarely seen by the public. Top-flight researchers have departed to find scientific freedom elsewhere. Senior figures of the CSIRO accept the organisation can sometimes be riven by conflict. They accept, too, that the institute has shifted away from ''pure science''. Some of those who have left say it acts increasingly as a research arm of industry and the federal government. Now, 16 reviews, which were previously confidential, of the organisation largely confirm this view. The change is having a deleterious effect on staff. Top-flight researchers have departed to find scientific freedom elsewhere while others have been pushed out. Money is scarce. And as the organisation slides into what insiders have described as a ''consultancy'' culture, as the funding for fundamental science has dwindled, so the CSIRO's researchers have learnt to claw at each other to get it. The obvious question is why. If it is true the CSIRO is riven by conflict and overseen by clubby, inept management, how could this have happened?

Some sheet home blame to CSIRO's former chief executive Geoff Garrett. Before his appointment in 2000, each division of the organisation directed its own science, and its leaders enjoyed utter autonomy. Garrett bombshelled these silos, introducing a corporate hierarchy that funnelled to him and to his entourage control over funds. With the money went control of the direction of the organisation. It is widely accepted the CSIRO needed change - that the power of the division chiefs sometimes prevented collaboration and fostered expensive duplication. But Garrett's critics say that in his war on the past, the best elements of the CSIRO's science culture became collateral damage. Scientists suddenly had what felt like sales targets. Groups of researchers had to bring into the organisation a share of what they were spending in contracts with companies and others. Perhaps more than any other factor, it is the heavy emphasis on ''applied'' science that has prompted the CSIRO's internal malaise. Stephen Cameron, an entomologist now working for the Queensland University of Technology, attended a retreat in about March 2008 that was meant to be a forum to discuss the future direction of the CSIRO's entomology division. There, in front of a room of at least 100 people, a senior CSIRO executive addressed the question of funding for basic research. ''There was … a discussion of the academic side of things and [the question of] when you have time to write up papers from projects,'' he recalled. ''What most people do is to put a white lie in … and put in 'analysis' to cover the period when the writing would happen.''

He said what followed was a question of ''how do you get new ideas off the ground and do exploratory work because you're meant to spend all the money on the wheat council project, for example''. ''That's when [the executive] said: 'you have to do skunk work'.'' Both he and the entomologist Sylwester Chyb (who is embroiled in litigation with the CSIRO) say the terms were a colloquialism for using money from paying customers to pay for side projects more useful for the CSIRO's global reputation. The CSIRO dug up the presentation in question. The slide that accompanied the remarks said: ''Keep 'skunking'; Don't sell 100 per cent of yourself; leave some time for developing ideas, early stage research.'' A CSIRO spokesman said the executive was simply telling the audience to keep ''working harder''. But the pressure for outside money is so great that observers see it too, including formal panels of scientists appointed to review the organisation every four years. Researchers feel ''sliced and diced'' and ''disempowered'', the reviews say, by the need to adhere to what paying customers want. ''Dividing their time amongst three, four or even more projects … impacts negatively on morale and, in turn, productivity.'' One division in 2010 was said to be suffering from ''an inward-looking culture; low morale in some areas; an ever-increasing demand to earn external income; confused lines of communication and responsibility''.

The CSIRO executive responsible for managing these reviews, Jack Steele, said the high targets for external funding were partly a ''perception'' issue, as they were set after government funds paid for the infrastructure that supports each team of researchers. ''Are we thinking … we should be funding all of our research … from appropriation and there should not be external revenue targets? Or is it appropriate that industry is investing in the R&D that is relevant to that industry's future?'' Steele said. But the pressure for revenue is clearly the cause of much angst inside the CSIRO. Some feel they carry a ''disproportionate burden'' of low-grade projects directed by paying customers which ''will eventually lead to unhappiness and dissent''. Similarly, the fact that only some scientists enjoy full funding ''may in time lead to some tension with those groups that have very high external earnings targets''. One panel feared that established scientists would be ''frozen out'' of fundamental research projects by managers anxious to keep them available for the industry jobs that bring in external cash.

The result of much of this turmoil is the departure of good people. Leading scientists have been repeatedly lured away. ''A number of first-class scientists have left the [land and water] division … for opportunities they considered would give them more scientific freedom and more opportunity to make major contributions in their fields of science,'' the most recent external review of 2009 said. Meanwhile in other areas, a clubby atmosphere, or ''over-reliance on promoting from within'' has blocked promotion for younger researchers. The CSIRO deputy chief executive Craig Roy said the organisation had ''looked very hard'' at its culture over the past decade. ''We have done a lot of work in the space of learning and development about how people get on in the workplace,'' he said. ''How you have difficult conversations if you need to … it doesn't always come naturally to people.'' He also said that ''if you want to be top 10 in the world, you need a very strong performance-based culture. And sometimes that can create some difficulties, but I think we're also a compassionate organisation.'' By July, Megan Clark will have an idea as to how large a problem workplace conflict has been in the CSIRO, when the first of three reports by Pearce is delivered. This report, a ''high-level'' document that outlines ''the overarching findings and recommendations'' from the first phase of his inquiry, will be made public.

A second, confidential, report due in February will tell her which submissions are sufficiently well-evidenced to be investigated during a second phase. But Pearce's scope will restrict these investigations to matters that have not been ''formally investigated in a fair manner, or which have been or are being considered by a judicial or administrative body''. It will not cover events before 2005, nor consider complaints from current staff or allegations against former employees. In the meantime, Roy is adamant the organisation has performed miracles over the past decade. ''I find it quite astounding,'' he said, ''that we've been able to lift our external impact, maintain our science, lift our external revenue demonstrably, and have a low separation rate and a high staff satisfaction rate.'' Do you know more? Loading investigations@smh.com.au