The NSW government has intervened in the RSL crisis, referring former state president Don Rowe to police over allegations he made $200,000 in cash withdrawals on his RSL credit card.
Minister for Veterans Affairs David Elliott referred Mr Rowe to NSW Police on Wednesday afternoon after reviewing a damning interim report by forensic auditors KordaMentha into allegations of years of mismanagement at the RSL.
Mr Elliott has also asked NSW Fair Trading Minister Victor Dominello to investigate the payment of unauthorised "consultancy fees" from RSL LifeCare to a string of RSL state councillors – which included Mr Rowe and former national president Rod White.
Mr Dominello has been asked to determine whether those directors of LifeCare, a not-for-profit nursing home and aged care provider owned by NSW RSL, breached the Charitable Fundraising Act by pocketing a combined $2.5 million in fees since 2007.
And NSW Attorney-General Gabrielle Upton has been asked to investigate donations to LifeCare from NSW RSL sub-branches and the women's auxiliaries.
The way the donations were channelled to LifeCare through the Welfare Benevolent Institute – at the direction of Mr White and Mr Rowe, according to the KordaMentha report – could breach the Charitable Trusts Act.
KordaMentha found both men used their positions within the RSL to steer donations from other, needier parts of the organisation towards RSL LifeCare while they were receiving consultancy fees.
Mr Elliott told Fairfax Media: "The interim report raised serious questions which need answers as soon as possible so those found doing the wrong thing can be held accountable."
Acting state president John Haines, who was vice president during the tenure of Mr Rowe and Mr White, told Fairfax Media on Wednesday that he had no idea that Mr Rowe had stepped down in 2014 for anything other than ill-health.
The audit report revealed that Mr White had demanded Mr Rowe's resignation after details emerged of his credit card use, which totalled $475,000 over six years.
"It was my belief that Don was suffering from leg problems and that was why he resigned," Mr Haines said.
"I was assured it was his health. It wasn't until some time later that rumours began than it was something other than that."
Mr Haines said the state council had agreed to establish a board of inquiry as recommended by KordaMentha but was still taking legal advice about other aspects of the audit and its recommendations.
Acting national president Robert Dick, who has replaced Mr White while he is investigated, acknowledged the league was facing a "very serious issue" and promised disciplinary action will be taken if allegations of impropriety are proven.
Mr Rowe did not answer calls on Wednesday.
KordaMentha found his credit card use included $213,000 in cash withdrawals, $20,000 a year of which was used to pay approved car expenses.
He also paid $38,000 in phone bills that covered phones for five family members as well as his own.
Fairfax Media has learned he also used the RSL credit card to pay for home entertainment, including a pay TV subscription.
Mr White has stood aside from all RSL positions.
