The Esther Foundation – a rehabilitation facility accused of performing exorcisms and gay conversions – applied for “promised funding” a month after the funding had been announced.
Freedom of information documents show the health department rushing to get information after the then prime minister, Scott Morrison, announced $4m for the group in the lead-up to the 2019 election.
The foundation promised to help young women with drug, alcohol and mental health issues. A West Australian parliamentary inquiry heard of “extreme religious practices” at the Esther Foundation’s Perth centre.
“Some of the prevalent and consistent themes that emerged from the complaints and allegations included emotional and psychological abuse, coercive and extreme religious practices, LGBTQA+ suppression and conversion practices, culturally harmful practices, medical complaints, family alienation, physical restraints and assaults, and sexual assault,” the inquiry’s report said.
While the inquiry heard WA authorities heard of some allegations in 2018, there is no evidence that any politicians or federal health department officials knew about them when the grant was awarded. The federal health department was first told of allegations in early 2020.
Earlier this year, the Australian National Audit Office (ANAO) found the grant, along with others awarded under the $2bn Community Health and Hospitals program (CHHP), was likely to be unlawful.
It found the department’s administration was “ineffective and fell short of ethical requirements” and that there were “deliberate breaches” of rules and guidelines.
There was an expression of interest process, but “most approved projects were selected by government outside this process”.
The new documents obtained by Guardian Australia show department officials trying to find out whether initial contact had even been made before some grants were announced.
In a letter dated 28 January 2018, the foundation’s administrator, Rodney Lavater, wrote to the then minister for health Greg Hunt asking for $1m annual funding for three to five years to increase capacity at the foundation’s Esther House and to reduce its reliance on “tin rattling”.
According to the ANAO, the government allocated $4m to the foundation in February 2019. Morrison visited the centre on 8 March – International Women’s Day – and announced the funding, saying the foundation had “completely, completely captured” his heart.
On 10 March, the department noted the announcement and said it was seeking more information from the foundation.
On 8 April, an adviser from Hunt’s office sent the department a spreadsheet of all “announced funded proposals” and said the minister wanted to know the current status of them, including whether initial contact had been made.
In a reminder on 9 April, the adviser said that the minister was “very keen to learn that all organisations have had at the very least initial contact with the department as the starting point of securing a funding deed for them ASAP”.
On 10 April, the department asked Esther Foundation’s head, Patricia Lavater, to fill out an application form for the already announced funding. The foundation’s Annette Russell returned the form on 12 April.
“Please find attached the completed application form for the promised funding of 4 million by prime minister Scott Morrison as requested,” she wrote.
The department then assessed the application, but the ANAO was scathing of its work. The ANAO report found there were “less than 100 words commentary in support” of the assessment, “all of which was copied from an Esther Foundation media profile and an activity plan provided by Esther Foundation on request from Health”.
It found there was no financial viability assessment or audited financial statement, and that the biggest chunk of money awarded was for vocational training, which was not aligned with CHHP objectives. Other ineligible items included a vehicle fleet expansion and telecommunications.
The department asked the minister to expedite approval “pending [Australian government solicitor] advice about legal risk”. He approved the grant on 11 June.
On the same day the foundation signed the grant agreement, on 18 June, the department got the AGS advice. It indicated that “making the grant would likely be without lawful authority”.
The grant was still executed. The foundation went into liquidation on 24 May 2022, at which point the department suspended all future grants payments, so ultimately it only got $2m.
The health minister, Mark Butler, said the Esther Foundation grant was “always a captain’s pick from Scott Morrison”.
“The former government entered into a grant without a financial viability assessment, audited financial statements, or even the legal authority to support the expenditure,” he said.
“Subsequently, deeply distressing allegations against Esther House were aired and a WA parliamentary inquiry was held into allegations of sexual and psychological abuse at the foundation.”
In response to the 2023 ANAO report, the department accepted recommendations and made improvements, it said. It said it was “committed to ensuring its management of public resources is efficient, effective, economical and ethical”.
In June, Butler directed the department to “run the ruler” over remaining CHHP projects. The review is ongoing.
Patricia Lavater told the WA inquiry she would sometimes pray for a young woman who would start “screaming and wailing on the floor”, but that she “never used” the term exorcism. She said she personally did not believe in a “homosexual demon”, and denied practising conversion practices. She also denied a range of other allegations made during the inquiry.
Guardian Australia has contacted Morrison for comment.
