With reputations on the line and millions of dollars in funding at stake, the vast majority of staff at Sydney Gay and Lesbian Mardi Gras took an extraordinary step on May 30 – delivering a private letter to the registered charity’s board warning that the organisation was at risk of unravelling under its own leadership.
Signed by 13 of the non-profit’s then-15 employees and delivered on a Friday about 40 days ago, the letter was blunt: the board’s appointment of Jesse Matheson as interim CEO, announced to staff earlier that week but not made public until five weeks later, was said to pose a serious reputational and financial risk – and could potentially jeopardise the organisation’s ability to pass an upcoming audit.
Staff cited Matheson’s public record, including a controversial 2012 opinion article titled “I’m a sexual racist“, in which he argued that racial preferences in sexual attraction were not discriminatory, as conflicting with Mardi Gras’ values and potentially damaging to its standing with corporate sponsors.
“Creating this very negative idea of sexual racism, I believe, infringes on our ability to choose who we sleep with without having to feel bad about it,” Matheson wrote in the column, published 12½ years ago by Star Observer, an Australian LGBTQIA+ magazine and news website.
The article sparked backlash at the time, and nearly four years later – during his first successful bid for a Mardi Gras director role in 2016 – Matheson published an apology titled “I’m sorry for my racist column – I was young and immature“.
“When I was a 19-year-old opinion columnist for the Star Observer I tried to create conflict with my column, including a now infamous piece which argued that sexual racism was acceptable. It is not acceptable,” he wrote.
“I hurt a lot of people with these articles, including close friends, and I am sorry. The views expressed in those articles, and many others, do not reflect my current views or who I am now.”
Both the initial column and apology have since been wiped from Star Observer’s website, with Matheson telling Gay Sydney News he requested their deletion in 2017.
“That decision [to have them removed] wasn’t about hiding the past but acknowledging that those views do not reflect who I am, and taking responsibility for the harm caused,” he said.
Despite the apology, staff told the board in their letter that reputational risks remained, particularly in light of other commentary – including a Star Observer column in which Matheson wrote: “Some gay boys are quite honestly as dumb as bread. Buy them a drink and hope to God they shut up.”
Staff also cited a 2023 Facebook comment in which Matheson criticised First Nations senator Lidia Thorpe for protesting during that year’s Mardi Gras parade by lying in front of the Australian Federal Police float.
“Putting herself under a truck is incredibly disrespectful to all the staff and volunteers who work so hard to make the event safe. What was she even protesting? Idiot,” Matheson wrote at the time.
In another column, Matheson used explicit language to advocate for equality in age of consent laws: “We did, however, ask to have the age of consent equal to that of our heterosexual counterparts. Because, you know, if a girl can take a pounding at 16, why can’t I?” he wrote.
Even though the statements had been made in the past, they could still damage relationships with corporate sponsors, staff argued.
“While an apology has been issued for one comment, concerns remain about the potential for ongoing reputational impact and stakeholder confidence,” the staff said. “We are concerned the risk is heightened with corporate partners, where public perception and brand alignment are closely monitored.
“In such cases, prior statements may be perceived as grounds for reassessment of partnerships, including potential activation of termination clauses and a potential funding loss in excess of 3 million dollars.”
The letter also cited internal morale concerns, warning that Matheson’s appointment could lead some staff to question whether they could continue to align themselves with the organisation.
“The public image of the organisation has an immense impact on us all,” they wrote. Gay Sydney News does not suggest that staff concerns about Matheson’s appointment and its potential impact on Mardi Gras’ reputation are substantiated – only that they have been raised.
Leaked staff letter:
Click to read the full document signed by Mardi Gras staff on May 30.
Staff also claimed other internal candidates were overlooked for the interim CEO role, although this has not been independently verified.
“At a time when consistent, informed leadership is vital, it is concerning that internal candidates and recent former staff, who possess both relevant experience and stakeholder trust, were not considered [for the interim CEO role] through a transparent and consultative process,” they said.
Staff asked that their letter be shared with the entire board, as well as with members of Mardi Gras’ audit and risk committee, for formal assessment. (The audit and risk committee comprises directors Daniel Mitsuru Delisle and Luc Velez, as well as six independent volunteers with audit and risk experience.)
The fallout from Matheson’s appointment came swiftly. Within weeks of him being internally named as interim CEO and the letter being sent to the board, five staff resigned – one-third of the organisation’s 15 staff at the time, excluding its outgoing and incoming CEO.
They included senior graphic designer Joel De Sa; head of engagement Dusty Panuccio Hartland; parade producer Emily Santiago; festival marketing and communications executive Georgia Rae; and head of festival marketing and communications Jake Troncone.
A source close to Mardi Gras, granted anonymity due to the sensitivity of the matter, said: “Jesse’s appointment and the mass exodus of staff are related.”
The resignations all came after Matheson’s appointment as interim CEO, the source said. Gay Sydney News does not suggest that the resignations are linked.
While Matheson’s appointment was “a factor” in most of them quitting, according to the source, it was unclear “how much of a factor” it was for each staff member.
“The staff are deeply frustrated at the board’s decision to appoint someone … with a history of controversial, racist comments and refuse to have a part in defending them to community/public/stakeholders,” the source said.
They said staff were concerned with “the lack of risk management and conflict of interest management” concerning the appointment, “putting long term partnerships and relationships with community and organisations Mardi Gras work with at risk”.
“Taken together”, they said Matheson’s past articles and opinions painted “a very narrow worldview of the queer community that he had at the time and … some of those comments presented out of context could be extremely damaging if the Daily Mail or whatever ran a hit piece…”.
Matheson’s appointment as interim CEO was significant, coming at a critical moment for Sydney Gay and Lesbian Mardi Gras – one of Australia’s most visible queer organisaton’s – as it grappled with financial strain and internal upheaval.
The non-profit had reported a $1.2 million deficit in its most recent financial report, released in November, despite receiving a $1.1 million emergency funding package from Destination NSW earlier in 2024 – half of which was later covered by the City of Sydney.
That financial pressure followed the cancellation of Fair Day in 2024 due to asbestos contamination at Victoria Park, and poor ticket sales for the same year’s Bondi Beach Party.
Adding to the challenges, the alleged domestic violence murders of gay couple Jesse Baird and Luke Davies – by a serving NSW police officer during the 2024 festival – were described by Mardi Gras in its financial report as “casting a pall across the community and the remaining festival events”.
The couple’s deaths, which occurred in the weeks leading up to the parade, sparked a divisive debate over whether NSW Police should be allowed to march. The board initially asked police not to participate, but later reversed the decision on the condition officers not wear official uniforms while marching.
Later that year, after member consultations, Mardi Gras held a vote at its annual general meeting on a motion to exclude police from future parades. The motion failed, with 493 members opposing the ban and 459 supporting it.
In March this year, the organisation suffered another setback when it lost the right to host the Bondi Beach Party for several years following a council decision to instead award it to festival producer Fuzzy.
Then in May, director Brandon Bear resigned mid-term, just months after being reappointed to a term set to run until December 2026.
Five days later, CEO Gil Beckwith announced her resignation, leaving the organisation further exposed.
Their departures came as Mardi Gras was still grappling with the fallout from a scathing governance review by auditors KPMG, mandated by Destination NSW as part of its agreement to provide the non-profit with the $1.1 million in emergency funding.
The final report, given to Mardi Gras in October last year but leaked to Gay Sydney News in December, identified issues with a financial report Beckwith had presented to the directors and raised concerns about Bear simultaneously serving as board co-chair, company secretary, and chair of the audit and risk committee – roles it said “should ideally be independent of the Board Chair position”.
Beckwith told the review the report was prepared by a then-recently hired chief financial officer who soon left the organisation, and that it was not subjected to independent checks or quality assurance before being presented to the board.
The review’s identified risks included significant financial reporting issues, concerns about the independence of key governance roles on the board, an absence of effective risk management, and inconsistent application of foundational governance structures.
Classified as an “extreme” risk was the independence of the unpaid board. It said many members had longstanding ties to Mardi Gras through volunteer roles or governance history, which the review said could “potentially impair their ability to act completely independently”.
Despite the review’s warnings about blurred governance lines, the board responded to Beckwith’s resignation by appointing company secretary Matheson as interim CEO. Gay Sydney News does not suggest that Matheson is unqualified for the role.
That decision – which staff argued in their letter was made without a transparent selection process and, according to a source close to the organisation, was made immediately after a closed-door, board-only strategy session on governance and operations that Matheson himself took part in – would go on to unravel confidence within the organisation.
“That certainly raised eyebrows,” the source said of Matheson’s participation in the session, adding that co-chairs had told staff he was chosen directly after the all-day meeting.
Promoting the company secretary – who had already been attending board meetings – to interim CEO blurred essential lines between oversight and operations, staff wrote. Gay Sydney News does not suggest a governance conflict exists, only that staff raised concerns about the potential for one.
“We believe this decision will risk a failure of the second audit scheduled for FY26 Q1,” they said, referring to the financial quarter between July and September this year.
The letter called for four board actions: reassess Matheson’s suitability for the interim CEO role, commit to beginning the recruitment process for a permanent CEO by the end of June, include a staff representative in that process, and consider allowing a staff member to attend agreed board meetings.
All seven Mardi Gras board members — Damien Nguyen, Mits Delisle, Brad Booth, Louis Hudson, Kyriakos Gold, Luc Velez and Kathy Pavlich — were contacted by Gay Sydney News for comment on this story. None responded on the record.
Instead, Mardi Gras’ external public relations firm issued a joint statement: “Sydney Gay and Lesbian Mardi Gras will not engage in public commentary on internal matters relating to staff or the Board. We will also not respond to speculation or unauthorised disclosures. Please respect the privacy of our staff, Board and volunteers.”
In a statement, Destination NSW said it was “not responsible for or involved in the executive recruitment process of major events it invests in, which are undertaken at the sole discretion of the event proprietor as independent corporate entities”.
The day after Gay Sydney News first revealed Matheson’s appointment on June 10 – weeks before it was formally announced to members on July 4 – he responded to a question from the publication about his “sexual racist” column, saying: “I recognise that some of my early writing caused harm.” The comments were not published until now, as Gay Sydney News awaited official confirmation of his appointment.
“The column in question was written more than a decade ago,” he said. “It was written at a time in my life when I didn’t fully understand the weight words can carry.
“Like many people, I’ve said things in my youth that I regret – and I’ve had to reckon with the impact those words had. I’m sorry for the hurt it caused.”
On his comments calling Senator Thorpe an “idiot”, Matheson said: “They were made in a personal capacity, and not while serving as a Director of Sydney Gay and Lesbian Mardi Gras.
“My concern at the time was about safety during the event. It was not intended to diminish the importance of protest or the voice of Senator Thorpe. But I recognise that the language I used was inappropriate and I regret making the comment.”
Aside from Matheson, at least five internal candidates – most from Mardi Gras’ existing leadership team – applied for the interim CEO role, according to two sources close to the organisation.
For them, it wasn’t just a shot at the top job – it offered a significant pay rise and a strong addition to their CV. The last time Mardi Gras publicly disclosed its CEO’s salary was in 2010, when the role paid $169,561 – slightly down from $175,270 the year before. Adjusted for inflation, that 2010 figure would top $245,000 today.
Announcing the interim CEO appointment to Mardi Gras members on Friday last week, current board co-chair Kathy Pavlich described Matheson as bringing “a rare combination of institutional knowledge, strategic thinking, and lived experience”.
“His deep understanding of the organisation, its values, and its communities makes him well placed to guide us through this transition period,” she said.
Matheson’s connection to Mardi Gras began at age 15, when he first marched in the parade with LGBTQIA+ youth service Twenty10.
He has since held a range of roles at the organisation, including serving as a director from 2016 until 2022 and a board co-chair between 2020 until finishing up as a director. He then became company secretary in August last year until being appointed interim CEO. He also served as a Sydney WorldPride director.
Before his appointment as interim CEO, he was an executive officer at Data61, the digital research arm of CSIRO, a role he has since left.
He also ran unsuccessfully as a political candidate for the Keep Sydney Open Party in the 2019 NSW state election, a group best known for opposing Sydney’s lockout laws and campaigning on nightlife and night-time economy issues.
In corporate life, he previously worked as a senior executive assistant at the Office of the Australian Information Commissioner; executive officer at UNSW Sydney; secretary at Inclusion Australia (formerly the National Council on Intellectual Disability); and workplace safety & digital officer, festival co-ordinator and executive assistant at the NSW Architects Registration Board.
Earlier in his career, he also worked as a journalist and copywriter at Australian Associated Press and interned as a journalist at IGN Entertainment, a video gaming and entertainment media website.
“I’m incredibly honoured to take on the role,” Matheson said in a statement issued by Mardi Gras on Friday.
“At a time when our communities are facing increased pressure, pushback and hostility, I’m committed to ensuring we remain bold and grounded in the needs of our LGBTIQA+ people and communities.”
But inside the organisation, staff sentiment appears far from settled.
“Everyone is looking for work elsewhere,” the source close to Mardi Gras said.
“I understand there are more about to resign but [this is] unconfirmed.”
Independent audit and risk committee members Felix Feist, Peter Fu, Darwyn Jolly, Catherine Olivier, Gemma Kyle and Henry Newton were all contacted for comment.
Feist declined to comment, noting that any communications with media or external parties must go through the Mardi Gras board or CEO. While the committee is independent, Gay Sydney News was informed there were confidentially agreements in place that prevented them from speaking.
Editor’s note: Journalist Ben Grubb pays $50 annually for Mardi Gras membership to access discounts, including at retail stores and bars, but does not use the membership’s voting rights.
Got a tip? Contact journalist Ben Grubb on Signal, Telegram or WhatsApp: +61 414 197 508
Ben Grubb is the founder and editor of Gay Sydney News, an independent publication covering LGBTQIA+ news. A journalist with more than 15 years' experience, he has reported and edited for The Sydney Morning Herald, The Age, WAToday, Brisbane Times, The Australian Financial Review, News.com.au, ZDNet, TelecomTimes and iTnews, primarily on the topic of technology. He previously hosted The Informer, a queer current affairs program on Melbourne’s JOY 94.9 radio station, and contributes to LGBTQIA+ media including Stun Magazine. Ben has also appeared as a technology commentator on Channel Ten's The Project, ABC RN’s Download This Show and commercial radio stations 2UE, 2GB and 6PR. Contact Ben: ben.grubb@gaysydneynews.com.au
