Mark Fitzgibbon, whose inability or unwillingness to stay out of his younger brother’s office led to Joel Fitzgibbon’s downfall is, as they say, no stranger to controversy. He’s also the nearest thing to Labor royalty in the Hunter, although recent events have turned many against him.

Mark got his start in the family fiefdom of the Cessnock City Council, working there as Clerk while his father Eric was councillor and mayor — brother Joel arrived there later as councillor and, eventually, Deputy Mayor. That began a twenty-year career in local government management for Mark in Sydney and the Hunter, that ended with a stint as General Manager of Bankstown Council from 1995-99. It was Fitzgibbon who, in the wake of a massive fire that burnt down the council’s administration centre in 1997, admitted that Bankstown Council lacked a business continuity plan and that some aspects of its insurance program were insufficient.

Fitzgibbon then moved to head the peak body for clubs in NSW, where his Labor background was critical to Clubs NSW’s efforts to delay and redirect NSW Government action on smoking and problem gambling. Under Fitzgibbon, Clubs NSW’s donations to the NSW ALP increased significantly, from none in 1998-99 to $7000 in 1999-2000, over $20,000 in 2000-01 and more than $75,000 in 2001-02.

In 2002, Fitzgibbon returned to Newcastle to become CEO of Hunter-based health insurer NIB, which had begun in the 1950s as a hospital fund for BHP steelworkers. That year NSW Transport Minister Carl Scully also appointed Fitzgibbon to the Tow Truck Authority board, charged with oversight of one of the state’s most corrupt industries. Fitzgibbon also joined the board of the Newcastle Knights football club.

It was Fitzgibbon’s stewardship of NIB, however, that angered many in Newcastle, particularly when the fund became the first private health insurer to list in 2007. The NIB board, headed by veteran Keith Lynch, has big plans to become a major player in health insurance and substantially lift its market share from the 7-8% it currently enjoys. But both the process of demutualisation and the subsequent listing drew criticism, with a JP Morgan book build privileging its own clients and Fitzgibbon and his senior management team picking up plenty of shares.

In October, the NIB board revealed they had knocked back an offer for the company of between $1.15 and $1.20, when the stock was trading around $0.65. The stock has struggled to get above $0.85 since. This was enough to outrage shareholders, but it was Fitzgibbon’s remuneration that drew the heaviest criticism at the company in Newcastle in October. Fitzgibbon’s remuneration had totalled $495,315 in 2006, including $347,000 cash and a $112,500 bonus. In 2007 — when profits fell 18% and investment management costs rose — Fitzgibbon’s pay rocketed to more than $870,000 courtesy of a 25% salary rise and a tripling of his bonus.

Fitzgibbon was just getting warmed up. Having overseen demutualisation and listing, Fitzgibbon’s pay nearly tripled in 2008 to a staggering $2.3m, via a $1.3m “transaction and retention bonus”, another handout of nearly $50,000, and shares worth $218,000. NIB’s profits had actually collapsed in 2008, ostensibly due to the costs of demutualisation and listing. Keith Lynch, who own fees had tripled, admitted he only worked part-time for his quarter-million dollar take. Former Liberal President John Valder led the attack at the AGM but failed to stop the approval of remuneration report.

Of course, Fitzgibbon’s value had also increased because he was now the brother of the Defence Minister, and Defence is a major health insurance user. It was on just such business that Mark Fitzgibbon was engaged when he held a meeting in his brother’s office and with his brother’s staff and military representatives earlier this year, as part of NIB’s plans to partner with controversial US multinational health insurer Humana, a subsidiary of which is a major health contractor to the US Department of Defense.

Maybe Fitzgibbon’s sense of entitlement, inflated by his extensive ALP connections and a five-fold increase in remuneration in two years, prompted him to see his brother’s office as a perfectly legitimate place to conduct business. Now he’ll be politically toxic for some time to come.

Peter Fray

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