The RSL will hold an independent investigation of consulting fees paid to national president Rod White and three NSW colleagues while they held voluntary positions.
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But Mr White, who denies having done anything wrong, will hold onto the presidency while the probe is carried out despite a push by deputy president Robert Dick's Tasmanian branch for him to stand aside pending the results.
In a statement issued on Thursday morning, a day after Fairfax Media revealed Mr White and former NSW colleagues had received shares of nearly $1 million in payments from the league's aged care arm between 2013 and 2015, the RSL said its national board would meet early next week to plan the "independent review".
"In the interests of natural justice, the directors have agreed to support Mr White as president while an independent review is conducted," Mr Dick said in the statement.
Mr Dick said the RSL was determined to keep its focus on helping veterans and service people in need.
"We value and appreciate the respect of the Australian community and will make every effort to preserve that trust through strong governance and effective management," he said.
The statement said Mr White strenuously denied any suggestion of inappropriate conduct and said he was committed to RSL principles "as per legal advice provided to the RSL NSW branch".
Fairfax Media reported on Wednesday that while Mr White was a state councillor with the NSW branch, he received a share in $980,675 from the veterans group's aged care organisation, RSL LifeCare, of which he was a director.
Three other NSW councillors also received a share of the payments between 2013 and 2015, financial reports lodged with the Australian Charities and Not-for-profits Commission reveal.
The NSW branch is seeking legal advice on whether the payments listed as "consulting fees" breach the RSL's constitution. Mr White and the other councillors were appointed to the RSL LifeCare board by the state council on which they sat.
The meeting of the Tasmanian branch resolved that an independent investigator should "determine if any federal or state laws were contravened and/or if the RSL NSW constitution or any other regulations may have been violated".
It also called for the resulting report to be made public.
Mr White declined to comment when contacted by Fairfax Media.
On Tuesday he said he provided "advice and services" to RSL LifeCare based on my professional career in the corporate sector and my extensive career in the veteran community".
"Perceived conflict of interest is what some people may see it as, but an understanding of the elements of the arrangement clarify that there is no conflict of interest," he said. "I was put on that board by the governing body of the league, and then as an individual person, I am entitled to enter into a commercial agreement."
The NSW branch has already made clear it intends to pursue the issue, with chief executive Glenn Kolomeitz saying on Tuesday that he was seeking fresh, independent legal advice on the payments.
The national board is made up of state and territory branch presidents. The Queensland branch declined to comment. South Australian president Tim Hanna was overseas and ACT president Peter Eveille said he was waiting for more information.
The RSL NSW constitution states that councillors – who are volunteers – must not "take a position of profit within RSL NSW".
RSL LifeCare's own financial reports state that its "controlling entity" is RSL NSW.
Mr White, Mr Rowe, Mr Humphreys and Mr Crosthwaite received the consulting fees not as directors but for additional services, according RSL LifeCare.
But all nine or 10 directors – the number varied between 2013 and 2015 – received such payments, according to the financial reports.
The latest revelations follow an announcement last week by RSL NSW that it was preparing for a forensic audit of its senior leadership's spending amid fraud concerns, and an admission by the Queensland branch that it had offered to pay more than $320,000 in back taxes.
RSL LifeCare provided Fairfax Media with a statement in response to written questions on Wednesday, saying that its directors spent "many, many unpaid hours assisting in the direction and broad oversight of the company".
But as needed they were "called upon as paid consultants" for services such as "the detailed review and analysis of RSL LifeCare's programs" and "the compilation of the organisation's financial results".
The statement did not address questions as to how much individual directors had been paid, how consulting fees were calculated and whether the four NSW councillors would have been hired for their specialist services even if they had not been appointed by the council to the RSL LifeCare board.
Do you know more? Email david.wroe@fairfaxmedia.com.au
