“Lobbying in NSW local government must be curbed” – ICAC

ICAC, the NSW corruption watchdog ,has called for tighter control of lobbying in the local government sector after finding a former general manager, a former planning director and two former Councillors engaged in serious corrupt conduct.

By Judy Skatssoon

The ICAC found former Canterbury City Council general manager Jim Montague was pressured by former Councillors Michael Hawatt and Pierre Azzi into installing Spiro Stavis (below) as director of city planning so they could influence his decisions.

The commission said although Mr Monatgue didn’t think Mr Stavis was the best person for the job “he improperly allowed himself to by influenced by pressure from Mr Hawatt and Mr Azzi”, including an offer of 20 weeks salary.

Spiro StavisThe NSW ICAC has made findings of serious corrupt conduct in relation to planning decisions at a Sydney council.

The Councillors also showed Mr Stavis his job interview questions in advance.

Corrupt planning decisions at the Council were a consequence of both underlying integrity issues and poor controls, and a NSW planning system that lacks effective anti-corruption safeguards.

NSW ICAC

The ICAC found Mr Stavis, Mr Hawatt and Mr Azzi engaged in serious corrupt conduct in relation to planning proposals.

They also failed to disclose their relationships with developers when voting on development applications, and Mr Hawatt used his position as a Councillor to try to get through development applications involving his daughter and son in law.

Mr Stavis used his position to influence a neighbour’s development application, the ICAC said, and doctored a draft planning proposal submitted to council’s development committee to get rid of critical material.

The activities occurred between 2014 and 2016.

Poor controls and lack of safeguards

The report blamed poor controls within council and a lack of safeguards in the NSW planning system, as well as weak regulation of lobbying in the local government sector.

“Corrupt planning decisions at the Council were a consequence of both underlying integrity issues and poor controls, and a NSW planning system that lacks effective anti-corruption safeguards,” the commission found.

The ICAC makes 23 recommendations including extending the Lobbying of Government Officials Act, which only currently only applies in part to local government.

“The lobbying activities exposed during the investigation suggest a change in the complexity of the local government lobbying landscape,” the report says.

“The Commission is satisfied that there are corruption risks inherent in lobbying in local government such that the LOGO Act should be extended to local government.”

The DPIE should also issue guidelines to increase transparency around lobbying of Councillors, it says.

The commission has referred the matter to the DPP to decide about whether anyone should face criminal charges, including former NSW MP Daryl Maguire for misleading ICAC while giving evidence about his involvement with Mr Hawatt and a potential business deal.

The ICAC has recommended charges including blackmail and corruptly offering a benefit against Mr Hawatt and Mr Azzi, and misconduct in public office against Mr Stavis.

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First published at Government News – Wednesday 23 March 2021. See; https://www.governmentnews.com.au/icac-calls-for-curbs-on-local-govt-lobbying/

5 thoughts on ““Lobbying in NSW local government must be curbed” – ICAC

  1. Two issues, one national and one local are reflected in this ICAC finding.

    The first relates to the manner in which paid lobbying is carried out, often by former politicians, to enable those with financial resources to get favourable treatment from governments, which is not available to those with fewer resources. The whole process of lobbying is open to corruption, and it should be outlawed.

    The second relates to the potential for corrupt behaviour by councillors and council officers at LGA level. It is absurd that the subject of vested or pecuniary interest can be managed in such a haphazard manner, as appears to be the case with CHCC. If I am a councillor with business interests in the CBD, and moves are afoot to develop the CBD, almost certainly, directly or indirectly enhancing the value of my investments, it seems that I can simply say “I don’t expect to make money, at any time, from my property holdings”, in order to be allowed to vote on motions which will clearly have the effect of increasing the value of my investments.

    Currently, local doubts have been raised in connection with just such a situation. Why has the state government not put in place measures to at least limit, if not prevent, this potential for corruption to occur, and why has our council’s person responsible for ensuring appropriate behaviour, not been able to see the conflict of interest which is apparent to so many others?

    1. Here is a document provided by the ICAC it says is to help manage Conflict of Interest matters, relevent to NSW, dated 2019. This is a quick placement until more time allows. However, some early take-outs.

      https://www.icac.nsw.gov.au/prevention/basic-standards/conflicts-of-interest

      a) What is compelling about this ICAC advice is that the “perception” or “appearance” of a Conflict of Interest holds strongly. This goes to public trust.

      b) The “reasonable person” test is applied. Thus, is there an appearance of a conflict of interest in the view of a reasonable person.

      c) The final point below provided by the ICAC shows how seriously it regards public trust and the appearance or perception of a conflict of interest — it’s applying that advice for a councillor to an involvement within the entire LGA.

      What follows now is a selection from the ICAC document, found here (PDF):
      https://www.icac.nsw.gov.au/ArticleDocuments/232/Managing-conflicts-of-interest-in-the-nsw-public-sector_June-2019.pdf.aspx.

      The reasonable-person test
      An objective, rather than subjective, test is used in determining whether there is a conflict of interest. The perspective used is that of a hypothetical, fair-minded and informed observer – the reasonable person. Therefore, a conflict of interest does not necessarily exist because of one person’s opinion – especially if that person is the one with the conflict. The situation must be assessed objectively. Importantly, a conflict of interest does not depend on the character of the individual concerned, but on the specific situation.

      What is a conflict of interest?
      A conflict of interest is a conventional expression that usually refers to circumstances in which someone’s personal interests may conflict with their public duty. A conflict of interest exists when a reasonable person might perceive that a public official’s personal interest(s) could be favoured over their public duties.

      Elements of the conflict of interest test
      There are four elements to consider when determining whether a conflict of interest exists.1. Does the official have a personal interest?2. Does the official have a public duty?3. Is there a connection between the personal interest and the public duty?4. Could a reasonable person perceive that the personal interest might be favoured.

      Connection between personal interests and public duty
      For a conflict of interest to arise, there must be a logical overlap or connection between an official’s public duty and their personal interest(s).

      To establish a connection, it must be at least feasible for the official to favour their personal interests in some way.

      Avoid unnecessary conflicts of interest
      For the reasons set out above, mismanaged conflicts of interest are detrimental to the public interest and are often associated with corrupt conduct. Therefore, unnecessary conflicts of interest should be avoided. Good practice examples include:

      * a local councillor deciding not to make property investments in their local government area.

  2. As a fair minded citizen, consider the mixed message here:

    (A.) If a Councillor lobbies on behalf of a relative – this is corrupt conduct – clearly a ‘NO-NO’, even though the Councillor does NOT receive any pecuniary benefit.

    (B.) But a CBD property owner Councillor can vote on matters of Council investment designed to prosper his CBD investments, simply by declaring ” no significant pecuniary interest”, and it passes without being challenged. What is more, when the CBD promotional campaign delivers prosperity in abundance, the Councillor joyfully banks this “pleasant, unexpected surprise”!

    As all Council matters are open to debate and adoption by majority vote; why has no Councillor ever dared to challenge the validity of such dubious claims? Why is it not discussed and resolved by debate as part of the democratic process?

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