Parts of the following
could be said about Monash, I refer to the sale of public land. Recently
Monash Council moved to sell land surrounding the Clayton pool stating
that the community had been consulted, it is and always been the view of
the Monash Ratepayers Org. that no land was to be sold until the Clayton
pool redevelopment was completed
Monash Leader 5th
September page 3 “Land Sale Anger” Monash Council Voted to sell two
blocks of land in Burton Ave Clayton this was inspite of 226 signed
letter objecting to the sale.
Past President MRA
Jack Davis
Member of the Clayton Pool
redevelopment Committee
The Palmers Road action was finally settled out of
court after considerable cost to ratepayers.
The struggle had not simply been about a gross
sell off of valuable public property, it was struggle for proper
processes, democratic rights and respect for law.
After a year’s investigation the Report of the
Auditor General was tabled in Parliament last week . The ratepayers who
had been publicly derided as "demented loonies" have been vindicated in
their action and millions of dollars of public property saved. However
the matters set out as facts in the Auditor General’s Report need to be
carefully studied and further actions taken before matters can be put to
rest.
The Foreword to the Report tables a sad list of
deficiencies in the Council’s processes:
*Lack of evidence that a comprehensive analysis
was undertaken prior to pursuing the sale of the property
*Inadequate due diligence on prospective
purchasers of the property
*Poorly conducted tender process for the sale of
the property which was further compromised by the actions of the then
mayor
*Lack of transparency to the community and
inadequate community consultation
*Deficiencies in advice from council officers to
the council.
From the trauma of those involved in the
protracted Palmers Road issue it is now up to us to insist that genuine
changes can be brought about for greater transparency and accountability
in Local Government. For this to be done there is a need for critical
appraisal of current practices to set up mechanisms to ensure that
similar abuse does not occur again.
In issues raised throughout the Report, lack of
transparency is a key issue, also failure of senior staff to fully
inform council, also insufficient follow through by the CEO of council
directions. The extent of discussion in informal sessions of the council
closed to the public is shown as a significant issue.
(This remains a challenge for the current council
which has continued the practice - now called CEO/Councillor
Discussions. Another practice which needs to be challenged is that of
moving motions while "in camera’ - which can hide decisions indefinitely
)
From the saga one has to ask how things could have
been so miscarried and why different individuals or groups, staff or
council, at different points did not insist on proper process when they
were so consistently and publicly challenged.
It also raises questions as to the extent of
predatory activity focusing on local government throughout the State,
raises the need to examine pitfalls, and suggest processes to ensure
genuine accountability, transparency and accessible intervention where
there is considerable public concern.
The now updated Local Government Act purports to
be more democratic, transparent and accountable but the conditions which
allowed the Palmers Road issue to get out of hand could occur again
given a wrong mix of persons and activities. There is too much faith in
"Codes of Conduct" and "Best Value Principles" and insufficient
mechanisms to prevent corruption or to provide the public with means of
scrutiny and intervention.
In light of growing complexity there is need for a
Commissioner for Local Government accessible to ratepayers with real
powers and independent of government.
And in East Gippsland what must be now clarified
are the mechanisms either the present or a new council could put in
place to ensure such abuse cannot happen again.
From the number of phone calls to us over the past
few days and also to members of parliament it is clear that justice
needs to be addressed . Those who saw the flouting of proper process by
persons of public authority, believe that an accounting is needed for
reassertion of the dignity of law . Ratepayers around the State were
aware of the East Gippsland action which should not be dismissed as an
unfortunate isolated incident.
The Report of the Auditor General is an important
step from which we need now to demand further action. The improper
actions of a number of persons holding positions of responsibility has
cost the ratepayers of this shire close to one million dollars.
Section 77 of the Local Government Act
states that a councillor must not make improper use of information
acquired as a councillor to gain, or attempt to gain, directly or
indirectly, a pecuniary advantage for himself or herself or for any
other person….Penalty 20 penalty points ($2,000) Penalty for second or
subsequent offence -imprisonment 3 months."
It is important to note, no pecuniary
advantage needs to be shown to have been gained personally, it is enough
that it be for advantage for any other person. Much has been made of the
fact that key players in the Palmers Road affair were not proven as
having gained an advantage for themselves. However that benefit was
provided to other parties is evident.
Take as example : Page 50 "The mayor had clearly
conveyed the amount of (a higher bidder) offer to Lakes Village thus
giving the company an opportunity to match or better it. The mayor did
not pass on Lakes Village’s offer to (the other bidder) to give him the
opportunity to increase his offer."
Page 77 of the Auditor General’s Report " The 2001
tender process was "messy" at best and the actions of the then mayor
compromised the integrity of the tender process. We identified many
significant departures from the council’s tendering policy and a number
of circumstances which in our view provided Lakes Village Pty with an
unfair advantage over other potential tenderers."
Communications between the mayor and Lakes Village
were not known to the other councillors or his communications with other
potential tenderers and the council’s real estate agent.
An excerpt from this time: "Your name would
probably be recorded if you pick up a tender document, so it may be
advisable to get someone else to pick up the tender documents for you.
It would be better if it was not {the council’s’ real estate agent}. I
could arrange for someone else to pick up the documents for you. They
would not know who they are picking it up for. There may be a charge of
$25.
If you pick them up yourself, then it may pay to
do so later, rather than sooner.
{The council’s chief executive officer} had a
visit from one of the major objectors who said that they [ARREG] were
having a meeting on Tuesday next week to gauge the level of support for
continuing the protest.
I think that the numbers are falling off as the
more sensible ones see that the others are stupid and illogical."
As part of summary recommendations the Report
notes "the potential for conflict arising from the dual role as both
seller and responsible planning authority in relation to Council land"
As to vindication of ratepayer concerns regarding
probity of those involved with the purchasers:
On Page 37 "OzCapital Pty Ltd was a company
registered on March 2000 with a share capital of 100 $1 shares fully
paid up and owned by a single shareholder;
Interstar Securities Holdings Pty Ltd was
registered as a company with ASIC in April 1999 with a share capital of
5 $1 shares fully paid up and held by a single shareholder."
Further to this, on Page 107
"Dr Bennett was made bankrupt by Order of the
Federal Magistrates Court of Australia on 22 August 2000
The CEO of OzCapital Pty Ltd filed his own
bankruptcy petition with the Official Receiver on 10 January 2001.
There are many questions that could be explored as
to dereliction of duty by the CEO and council officers in what was not
provided as timely advice to the Council. The Probity of the purchasers
(see Page 36) is such an area. "Our audit found that council officers
failed to obtain credit references on Dr Bennett and the other potential
prospective purchaser."
"On 19 December 2000, the chief executive gave
councillors and some senior staff a copy of a 7 December 2000 press
article about Dr Bennett’s conviction in the County Court, and briefed
them about discussions with the Council’s real estate agent about Dr
Bennett’s offer and other potential options for sale of the property.
The chief executive did not, however recommend that the sale cease
negotiations with Dr Bennett."
This I believe was a key point in the saga. The
sale may have been abandoned at this stage if proper diligence and
timely advice had been supplied.
How far can incompetence be argued across a whole
range of process?
Where is the accountability in Local Government if
things are seriously ‘off the rails.’ What accountability measures apply
to senior persons in public organizations?
ARREG has had to move a mountain to save the
valuable property at Palmers Road and to get the Auditor General
investigate the matter, now the Report must not be suppressed, it needs
to be made available to all interested people in East Gippsland. The
many people who attended meetings, gave donations and supported the
action are entitled to read parts of the story which were hidden from
us. Some excerpts may be read with wry amusement as we get a glimpse of
behind the scenes.
An example :"On 31 August Cr Smyth sent an email
to a member of the Lakes Village group advising that he had voted not to
go to go to tender and that he was going "on the front foot" with a
positive media release. Dr Bennett replied on 4 September, stating his
belief that the mayor "would not let it slip away next time."
The councillor replied the same day that there had
been a positive reaction to his blast at negative people in the local
newspaper of the previous day and that he and the mayor were "whipping
up support". He also wrote in his email that: "{The mayor} is extremely
supportive and was concerned when he saw the councillors begin to
buckle…The tender will specify ‘best value’ to the community. I think
the councillors just wanted to be ‘safe’. Some of them don’t like any
‘heat.’
Where to from here ?
If we look for referral to other agencies we find
the Auditor General has referred material on Dr Bennett’s breaches of
the Corporations Act to ASIC. This could be followed by a request for
investigation by the Fraud Squad.
The Minister of Local Government when approached
by ARREG prior to legal action had also advised taking concerns to the
police if this was considered appropriate. Now in light of the Auditor
General’s findings this would be a valid option.
And taking into account the protection offered to
a first whistleblower, investigation by the Fraud Squad might flush out
further information that could be used in civil action.
So where does Council stand on further action ?
That depends largely on the seriousness of public
pressure to seek restitution. Five of the present 8 councillors came
from ARREG, the Palmers Road issue brought them to public notice. But
for the matter to be taken further, ratepayers will need to be very
clear as to next steps they expect from Council. .
Section 77 of the Local Government Act provides
strong basis for legal action.
It’s not simply about a million dollars lost
through improper processes but about greater respect for Local
Government, mechanisms for greater transparency, respect for law and
accountability of those with public responsibility. The air is far from
clear, the dirt cannot simply be swept under the mat.
