AND THE BEAT GOES ON…

How rife is corruption in WA local government, and what can be done to prevent it?

In 2015, the WA Crime and Corruption Commission reported to Parliament that ‘systemic weakness’ in the local government sector had resulted in numerous cases of alleged misconduct, including eight involving ‘irregularities’ in procuring goods and services—that is, in awarding contracts to suppliers.

This ‘systemic weakness’, the report suggested, signifies a widespread failure among local governments to ensure an adequate degree of control over municipal spending through audit and risk procedures.

The report suggested that

While it is difficult to prevent a determined person from committing fraud, the opportunities and temptations can be greatly reduced through an appropriate control framework.

Well, yes…but how diligent are councils in maintaining such a framework, and what is it about local government that seems to attract self-serving ‘determined persons’ with a penchant for trickery and fraud?

Examples of misconduct by council employees…

In one of those CCC cases, an employee of the City of Stirling had colluded for seven years with seven different building contractors, in the process trousering a handsome $600,000 over and above his legitimate emoluments.

At the Shire of Kalamunda, CEO James Trail spent more than $800,000 on management systems software, disregarding the more prudent and frugal limit of $200,000 budgeted by the shire council. 

Needless to say, the grateful software merchant rewarded Mr. Trail by paying for a flight in business class to London, where he was to attend a conference.  As well, it presented him with $2000 as spending money for the trip and (a nice touch) tickets for cricket matches at Lord’s.

James Trail, former Kalamunda CEO (PerthNow)

In the Wheatbelt, we’ve witnessed the tragic case of Dacre Alcock, former CEO of the Shire of Dowerin, who is now doing time for having over several years redirected hundreds of thousands of ratepayers’ dollars into the gaping coffers of online betting agencies.

…and by councillors

It isn’t only council employees that game the local government system. 

In 2008, the Mayor of Cockburn, Stephen Lee, was up for re-election.  A property developer with significant real estate interests in Coogee paid $43,500 to a PR firm to bolster Mayor Lee’s campaign. 

Unaccountably—in both senses of the word—the mayor omitted to declare this generous gift in his annual return.

And speaking of gifts, let’s not overlook the scandal surrounding Perth’s Lord Mayor, Lisa Scaffidi.  Lord Mayor Scaffidi is a sophisticated, highly intelligent local government personality with the hide of a rhinoceros and a jumbo-sized sense of entitlement.  (Perhaps she should change her name to Lisa Safari.)

Now there’s a lady with chutzpah.  The CCC found her guilty of serious misconduct relating to an undeclared gift from a corporate admirer, BHP-Billiton.  This wasn’t perfume, nail polish or a T-shirt from Target but a hospitality package worth $36,500 covering the expense of a visit to the Beijing Olympics.

So does Lord Mayor Scaffidi repent her offence and humbly beg pardon of the mob? Not on your nelly!  Up goes the middle finger, while the bewitched burghers of Perth confirm the mandate of heaven by re-electing her to a third term in office.  

Perth's Lord Mayor, Lisa Scaffidi (ABC)

And here’s one of my favourites, culled from the casebook of the Department of Local Government and Communities. 

In 2012, a DLGC enquiry found that then City of Canning Mayor Joe Delle Donne and two other councillors had made

…improper use of their office as council members with the intent and purpose of gaining directly or indirectly an advantage for the Mayor’s daughter’s father-in-law and in so doing caused a detriment to the local government and the persons selected as preferred applicants.

A neat combination, you might think, of nepotism and patronage.  Thank goodness, nothing like that could ever have happened in York. 

  

Joe Delle Donne as Mayor of Canning (The West Australian)

Mice that roar

Now we travel northwards to Exmouth, a pleasant seaside town on the tip of Northwest Cape, famed far and wide as the gateway to Ningaloo Marine Park—where you can swim with whale sharks—and home to an important defence facility and a large painted replica of a prawn. 

Exmouth's Big Prawn (Kailis Bros.)

 Although a major fishing and tourist centre, Exmouth is a small town with only 2594 permanent inhabitants of whom 1469 are electors.  Its local government, the Shire of Exmouth, has 74 full time employees and holds sway over 6261 sq. kms of the West Pilbara region. 

According to the DLGC’s My Council website, the shire’s revenue in 2014/5 amounted to $16,139,102, compared with an operating expenditure in the same year of $18,113,046. 

The shortfall of $1,973,944 presumably goes some way to explain why the shire’s FHI (financial health index) weighs in at a mediocre 65, which is 5 points less than the minimum figure nominated by the DLGC as denoting a reasonable degree of financial health.

Still, some mice can roar, and the Shire of Exmouth is roaring even louder, and with greater effect, than the somewhat more populous Shire of York with its ridiculous Splurj Mahal, the failed York Recreation and Convention Centre. 

A visionary project

The Shire of Exmouth manages several infrastructure projects, most notably the visionary Ningaloo Centre estimated to cost about $32m. 

I don’t know how much of that will be extracted from the pockets of Exmouth ratepayers.  The development is supported by the Commonwealth Government, the WA Department of Regional Development, Royalties for Regions and Lotterywest. 

Perhaps providing management services is part of a partnership arrangement that results in a net financial gain for the shire, though somehow I doubt it.

I said the project is visionary, and it certainly is.  The facilities of the Ningaloo Centre will be devoted to scientific research, data sharing with industry and other interested parties, library services and education, and the promotion of tourism in the Exmouth region and further afield.  

A far cry, then, from York’s white elephant, with its limited appeal to a handful of sports fanatics (whom it doesn’t seem on the whole to have served very well) and a gaggle (or gargle) of superannuated quaffers drawn to the tavern’s promise of subsidised booze like moths to the proverbial flame.   

Admittedly York’s folly has cost—so far—only about one-third of what will be spent in constructing the Ningaloo Centre.

All that said, I’ve yet to be convinced that local governments should play any part in financing and managing grandiose building projects.  In my view, those are enterprises best left to private developers.

 In York, the tennis and bowling clubs were probably much better off before they foolishly lined up behind the Shire’s—that’s to say, CEO Hooper’s—pharaonic sporting hub fantasy.

Gigantic municipal building projects offer too much scope and too many ‘opportunities and temptations’ for fraud and other varieties of bureaucratic misconduct.

But if I had to bet my shirt on the eventual success of either development, the YRCC or the Ningaloo Centre, I would unpatriotically but without hesitation back the efforts of the Shire of Exmouth.

Artist's impression of the Ningaloo Centre (Shire of Exmouth)

 Allegations

More’s the pity, then, that the CCC now finds it necessary to investigate allegations of wrongdoing by the Shire of Exmouth’s CEO, Bill Price, and others on his staff.

At a hearing last week, it was alleged that Mr. Price, without calling for tenders, had awarded the contract to build a 55,000 litre aquarium to a company, Ocean Reefs Production, that had been formed only three months previously. 

It was further alleged that Mr. Price had deliberately misled the Shire Council regarding the award of the contract.

In the words of Tony Power, counsel assisting the Commission:

In the Shire of Exmouth, there appears to have been a blurring of what should be a bright line between the personal interests of senior managers including the CEO on the one hand, and their public functions and their use of public moneys on the other hand. 

Public officers should know where that line is and they shouldn’t cross it’.

Amen to that.

Bill Price, CEO Shire of Exmouth (LinkedIn)

‘Draining the swamp’ 

It’s possible—it may even be probable—that Mr. Price and his colleagues are innocent of every allegation levelled against them.  Mr. Price is represented by one of WA’s most senior criminal barristers, Tom Percy QC, who will no doubt put his client’s case to the Commission with style, vigour and élan.

But it troubles me that stories involving allegations of serious financial misconduct by public officers—elected as well as employed—seem to crop up with tedious regularity in the annals of local government in Western Australia.

Sometimes the miscreants are convicted and packed off to prison, as happened to poor Dacre Alcock.  More often, I suspect, councils unwilling to admit they were duped, and reluctant for that—and less noble reasons—to set an investigation going, quietly edge them out of their jobs and try to bury the evidence as deep as the spade will go.

Saving face, protecting vulnerable reputations and just wanting to ‘move forward’ at all costs are miserable motives for suppressing the truth about crimes and misdemeanours perpetrated against the public interest and the public purse. 

In the USA, President-elect Donald Trump campaigned successfully on a pledge ‘to drain the Washington swamp’.  When he’s done working out how to achieve that objective, he might care to give us a few ideas on how we can drain the municipal swamp over here.